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Public-private partnership model for physical education and sports sector:
benefits analysis
UDC 796.062
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Dr. Hab., Professor L.A. Rapoport1 E.V. Kharitonova1 A.S. Markova1
1Ural Federal University, Yekaterinburg
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Corresponding author: [email protected]
Abstract
Objective of the study was to identify mechanisms of effective implementation of public-private partnership in the Sverdlovsk region as part of the development of the region's ice hockey infrastructure.
Methods and structure of the study. The study was carried out on the Sverdlovsk region ice arenas built and put into operation within the framework of the implementation of "Agreement between the government of the Sverdlovsk Region and UMMC-Holding, LLC".
Results and conclusions. Considering the implementation of the mechanisms of public-private partnership by the example of the above-mentioned "Agreement", it can be said that the actions of the regional authorities contribute to the sustainable development of the sector, as well as the strategic planning of the economic and social development of the region. The system approach and the long-term project implementation have had a positive impact on the development of sport and the increase in the number of participants: the number of ice hockey players in the Sverdlovsk region increased from 16,258 in 2017 to 24,155 in 2019.
With regard to the economic dimension and further improvements in the partnership mechanisms, it is necessary to increase the profitability of sports facilities, their sustainability, and the level of management efficiency, which can be realized through other forms of public-private partnership as part of the models involving the maintenance of sports facilities by a private partner.
Keywords: public-private partnership, sports infrastructure, ice arena, resource management, physical education and sports ecosystem.
Background. One of the key avenues the physical education and sports sector progress is the sports infrastructure development business with versatile sources of finance and modern efficient mechanisms, with a special encouragement of modern public-private partnership models - in view of the fact that the existing 300,000 sports facilities available in the Russian Federation are estimated to meet only about 50% of the popular demand for accessible physical education and sports infrastructure [3]. Well-developed and accessible physical education and sports infrastructure is critical for luring local communities in habitual
physical education and sports to indirectly facilitate the national socio-economic progress due to improvements in the life quality [5].
Objective of the study was to analyze benefits of a public-private partnership model implemented in the Sverdlovsk Oblast to contribute to the ice hockey infrastructure development initiatives.
Methods and structure of the study. Modern physical education and sports sector is known to directly improve the social living standards although its services are still poorly if ever supported by the local and federal budgets - in contrast, e.g. to the health
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and education sectors [1, 4]. This is the core reason why the physical education and sports sector needs additional investments and alternative sources of finance for its infrastructure development projects. Public-private partnership models are ranked among the most beneficial alternatives for the sector progress. Generally, the public-private partnership concept has two versions of interpretation. In a narrow definition - as provided by Federal Law No. 224-FL dated July 13, 2015 "On public-private partnership, municipal-private partnerships in the Russian Federation and amendments to the relevant legal provisions" - public-private partnership refers to the new infrastructure development projects by private and public entities. It a broader definition, public-private partnership is interpreted as cooperation of public and private interests in different forms regulated, in addition to Federal Law No. 224-FL, by Federal Law No. 115-FL of 21.07.2005 "On Concession Contracts", Federal Law No. 208 "On Joint Stock Companies", Federal Law No. 135-FL dated July 26, 2006 "On Protection of Competitiveness", and Federal Law No. 44-FL dated 05.04.2013 "On contracting system for procurement of goods, works and services for the federal and municipal projects".
We analyzed, for the purposes of the study, the progress of the "Public-private partnership Contract of the Sverdlovsk Oblast Government with UGMK-Holding LLC" effective for 5 years (2017 through 2021). Subject to the analysis were the ice arenas constructed and commissioned under the public-private partnership Contract: see Table 1.
Results and discussion. The public-private partnership in the regional physical education and sports infrastructure development projects has been found to effectively encourage the habitual popular physical education and sports activity as verified, among other things by the ice hockey sporting population growth statistics reported by physical education and
sports Statistics Form No. 1 for 2017-2019 as follows: 2017: 16,258 people: 2018: 22,677 people; and 2019: 24,155 people. Of special interest in this context is also the statistics of the popular demand growth for the physical education and sport services in 2017-2019. Thus the commercial physical education and sport service revenues of the local clubs and groups were reported to grow as follows: 2017: RUB 835 572.7 thousand; 2018: RUB 1,465,249.2 thousand; and 2019: RUB 1,719,017.0 thousand.
One of the most popular winter sport in the Sverdlovsk Oblast at present is ice hockey - that is ranked second in the sporting population statistics, with its popularity being clearly and largely correlated with the ice sports infrastructure supply: it is only natural that the more accessible are the local ice arena, the higher is the demand. This is the reason why the local government gives a special priority to the ice arena development projects in view of the high popular demand for the affordable ice arena services. However, it should be mentioned that despite the recent progress the local ice arenas in 2019 were reportedly economically unsuccessful, and this is why the government needs more efficient physical education and sports infrastructure operation and management models. Given in Table 2 hereunder are the key operational statistics of the Sverdlovsk-Oblast-based ice arena.
We believe that the financial performance of the local physical education and sports infrastructure may be improved by efficient modern interdepartmental cooperation models with a special priority to the inclusion of ice arena in the local socio-cultural environments as their key service elements accessible for the local communities.
Conclusion. Based on the study data and analysis, we would recommend redesigning the federal and municipal physical education and sports policies and projects so as to prioritize the income-generating federal, municipal and combined projects with flex-
Table 1. New ice arenas constructed in the Sverdlovsk Oblast under the public-private partnership Contract
Ice arena, location Year Cost, RUB mln.
Metallurg ice arena, Revda 2018 284,9
Molodost ice arena, Krasnouralsk 2018 338,0
Municipal ice arena, Rezh 2018 200,0
Municipal ice arena, Yekaterinburg 2018 95,0
Ice Sports Palace, fist project, Verkhnyaya Pyshma 2018 368,6
Ice Sports Palace, Kirovograd 2018 373,3
Small ice arena, second project, Verkhnyaya Pyshma 2019 215,5
Blagodat ice arena, Kushva 2019 43.5 (20% share co-financed)
Municipal ice arena, Sukhoy Log 2020 256,6
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Table 2. Operational statistics of the Sverdlovsk Oblast based new ice arena
Ice arena, location Space, square m Clientele Service staff Costs, RUB thousand Incomes, RUB thousand Cost-to-income ratio
Yekaterinburg 2 684,21 108 000 33 22 681 10 417 0,459
Rezh 3 335, 4 5195 111 20 774 2 735 0,131
Revda 5241,3 5195 54 60 470 24 807 0,410
Kirovograd 5 219, 3 54 234 21 22 266 6 504 0,292
Krasnouralsk 5241,3 79 000 29 25 166 7 460 0, 296
ible application of inter-budgetary transfers. Modern versatile physical education and sports infrastructure management models will help expand the range, quality and accessibility of the popular physical education and sport services, with the local physical education and sports facilities evolving into popular hubs in the socio-cultural environments to effectively encourage the physically active, sporting and healthy lifestyles in every individual and social progress field.
References
1. Alekseev S.V. Sports management. Regulation of organization and conduct of physical education and sports events. Textbook for university students majoring in Organization Management, Jurisprudence and Physical Education and Sports. P.V. Krasheninnikov [ed.]. Moscow: UNITY-DANA: Zakon i parvo publ., 2019. 687 p.
2. PPP and MPP: how does this tool work in modern realities? Step-by-step instructions using real examples (electronic resource) Available at: http://home.sportb2b.ru/learning/gchp-i-mchp-kak-etot-instrument-rabotaet-v-rossi-yskih-realiyah-poshagovaya-instrukciya-na-re-alnyh-primerah
3. National Center for Application of Public-Private Partnerships. Available at: https://pppcenter.ru/
4. Decree of the President of the Russian Federation of 05/07/2018 No. 204 "On national goals and strategic objectives of development of the Russian Federation for the period until 2024" (electronic resource). Available at: http://krem-lin.ru/acts/bank/43027
5. O'Reilly, Brunette K. Michelle Norm Public-pri-
vate partnerships in physical activity and sport. Human Kinetics, 2013. 232 p.
