CC BY
1PPSUTLSC-2024
PRACTICAL PROBLEMS ANO SOLUTIONS TO THE USE OF THEORETICAL LAWS IN THE SCIENCES OF THE 21ST CENTURY
tashkent, o-8 MAv 2004 www.in-academy.uz
WAYS TO REDUCE BUSINESS RISKS IN PUBLIC-PRIVATE PARTNERSHIP PROJECTS
Ataniyazova Maksuda Baltabayevna
Head of the Department of General Economic Sciences,Tashkent University of Applied Sciences, Uzbekistan,
Tashkent maksudaataniyazova81 @gmail.com https://doi.org/10.5281/zenodo.13324937 Annotation: In the article, based on the goal of effective establishment of public-private partnership and the achievement of results, the analysis of business risks that may be encountered in the implementation of projects is carried out. Also, as a result of the analysis, scientifically based proposals and recommendations were developed for effective organization of mutual relations and prevention of business risks.
Keywords: PPP project, partnership, entrepreneurship, public sector, private sector, risks, financial risks, risk assessment, risk distribution, risk reduction, risk management.
1 INTRODUCTION
A lot of practical work is being done in our republic to modernize the economy and develop industry, service and other sectors. On the other hand, it is important to establish effective and beneficial relations between all participants, that is, the state, private sector and society, in the effective organization of reforms. Public-private partnership (PPP) is a relatively new direction for the republic as a legal instrument of public, private sector and community cooperation aimed at solving social and infrastructural problems. The concept of PPP was introduced at the legislative level by PQ-3651 dated April 5, 2018 "Regulation on public-private partnership in the field of preschool education". At the same time, the Law No. ORQ-669 of May 10, 2019 "On Public-Private Partnership" at the level of the President and the Cabinet of Ministers in some very limited sectors such as health care, communal services, museums and theaters A number of regulatory and legal documents aimed at regulating PPP projects have been adopted.
2 MATERIALS AND METHODS
In the process of research, the scientific basis of the methodological approach to the development of public-private partnership in the conditions of the transformation of the economy, the implementation of public-private partnership projects, the main directions of public-private partnership in the service sector, restrictions on the introduction of this mechanism, the formation of criteria for the systematic identification and classification of public risks a dialectical, systematic and scientific approach to the study of economic systems and ratios, comparative and comparative analysis and grouping methods were used.
3 RESULTS
In recent years, various forms of public-private partnerships implemented in our republic mainly concerned only some sectors of the economy. Such projects were mostly implemented in the oil and gas and mining industries. This is due to the fact that investments in these sectors are considered safer compared to other sectors of the economy.
It should be noted thatAll conditions are being created for the implementation of PPP projects, but at the same time, if we pay attention to the experience of
developed countries, it is one of the important tasks to minimize the existing risks by analyzing the economic feasibility of PPP projects and to coordinate the activities of all interested parties. For the realization of PPP projects, it is necessary to classify and clearly indicate the existing risks by the public sector and private business.
Risk management is carried out during the entire operation of the PPP project and encourages the prevention of risks in advance and elimination during the project implementation phase.
PPP risk management includes the following
steps:
— classification of risks by groups;
— risk assessment;
— allocation of risks;
— development of risk reduction measures;
— continuous monitoring of risks.
A characteristic feature of risk sharing (transfer) in PPP is the principle of taking the risk to the partner who is able to insure it in the best form.
I. Political risks are one of the main risks assumed by the state in PPP. They consist of:
1. Change of political structure.
2. Risk of revision of the project contract.
3. High level of initial non-returnable investment. Concerns on the part of private enterprises stem
from the state's right to enter into the project while canceling the PPP contract or giving up private sector management. In most cases, such risks are insured through contractual clauses, which state that such action by the state can only occur if the private partner repeatedly or persistently fails to meet project obligations.
II. Risks related to legislation.
1. Risks associated with changes in state legislation.
2. Risks associated with changes in local legislation. 4 DISCUSSION
It should be noted that even the most carefully designed long-term contracts for PPP projects are sensitive to the risk of legislative changes. Such risks are unique in each country as they arise in the context in
PPSUTLSC-2024
PRACTICAL PROBLEMS AND SOLUTIONS TO THE USE OF THEORETICAL LAWS IN THE SCIENCES OF THE 21ST CENTURY
tashkent, o-8 MAv 2004 www.in-academy.uz
which they may occur. Because at present, the improvement of legal norms in the field of PPP in our republic shows the high level of legal changes in the legislative system in this field.
Studies show that it is precisely the risks associated with the ineffectiveness of government agencies that create a worrying situation for private enterprises. This hinders the development of the entire PPP market and creates difficulties in the implementation of each specific project. On the other hand, the degree of unreliability of cooperation with the state is also quite high.
Also, state guarantees related to the support of PPP projects, the ability and readiness of state structures to compensate for political and legal risks are important issues for private enterprises participating in cooperative relations with the state.
Such risks have a particular impact on the participation of foreign companies in local PPP projects. These companies are very sensitive to political risks, so they are often supported by international financial organizations (for example, the Multilateral Investment Guarantee Agency from the World Bank Groupl) they turn to for help.
III. Financial risks. If the project is partially financed in foreign currency, then the risk of exchange rate fluctuations is under the absolute control of the state. In addition, there is a risk of currency conversion in developing countries, which means that the exchange of national currency for foreign currency may be prohibited.
Financial risks related to inflation, changes in interest rates or refinancing rates occurring in the economy are usually insured partly by the government, partly by insurance companies and a private partner.
It should be noted that in most countries, obtaining long-term financing (more than 5-7 years) for investors and new PPP projects is very difficult, which creates the risk of not being able to review the terms of the contract or finance the project. Therefore, the state should provide guarantees to increase the life cycle of such projects.
IV. State brisks involved in disclosure. These risks can be called administrative risks. These types of risks include the risks related to obtaining administrative permits (usually such risks are shared by the government with a private partner) and tariff regulation.
V. Technical risks assumed by the government. These risks are the risks that arise in construction objects within the framework of PPP projects: the risks of protecting objects of ecological and cultural historical value.
5 CONCLUSIONS
In conclusion, risk management is very important in the process of implementing PPP project management mechanisms in the current environment. Therefore, a
characteristic feature of the risk management system in PPP projects is the rule of assuming the partner who can best handle the risks associated with the project. This creates an incentive for efficient distribution of project revenues.
REFERENCES:
[1] Decree of the President of the Republic of Uzbekistan dated January 28, 2022 "On the development strategy of the new Uzbekistan for 20222026" No. PF-60 //New Uzbekistan. - 2022.www.lex.uz
[2] Djumaniyazov UI "Some theoretical and methodological issues of corporate management development based on public-private partnership" // "Economics and innovative technologies" scientific electronic journal. 2017 No. 3, May-June, p. 9.
[3] Rodionov AV, Zvyagina AV, Krut AA Riski pri realizatsii proektov gosudarstvenno-chastnogo partnership: classification, upravlenia, napravleniya minimizatsii // ANI: ekonomika i upravlenie. 2020. No. 3 (32).
[4] Salaev S., Abdikarimova Z. Public-private partnership innovative cooperation model: content, different aspects and main features //Economy and innovative technologies. - 2022. - T. 10. - No. 6. - S. 97-107.
[5] Public-private partnership in Uzbekistan and Europe // https://www.uzanalytics.com/iqtisodi%D0%B5t/graphic s/4649/
[6] Link AN, Scott JT Public/private partnerships: stimulating competition in a dynamic market //The social value of new technology. - Edward Elgar Publishing, 2019. - P. 94-125.
1 Website of the Multilateral Investment Guarantee Agency of the World Bank Group -URL: http://ww\v.miga.org
