Comparative analysis of the legal regulation of public-private partnership in the countries of Central Asia: Uzbekistan, Kazakhstan, Tajikistan, Kyrgyzstan and Turkmenistan

Introduction

Public-private partnership (PPP) represents an important instrument for the effective development of infrastructure, attraction of investments, and improvement of the quality of public services. In the countries of Central Asia, this mechanism is becoming increasingly relevant, especially in the context of economic transformations, the pursuit of infrastructure modernization, and the improvement of the investment climate.

Uzbekistan, Kazakhstan, Tajikistan, Kyrgyzstan, and Turkmenistan share similar historical and cultural characteristics; however, their legal and economic systems differ significantly. In recent years, these countries have undertaken a number of steps to develop legal frameworks regulating PPP, with the aim of attracting private capital into key sectors of the economy such as energy, transport, healthcare, and education. Nevertheless, each of these states implements its own model of legal regulation of PPP, which is connected to differences in the political, economic, and social situation.

The purpose of this study is to conduct a comparative analysis of the legal regulation of public-private partnership in Uzbekistan, Kazakhstan, Tajikistan, Kyrgyzstan, and Turkmenistan. The study focuses on the legal foundations of PPP in these countries, the identification of common trends and differences, as well as the assessment of the effectiveness of the applied models in terms of attracting private investment, improving infrastructure, and ensuring sustainable development.

Public-private partnership is a legally formalized cooperation between a public partner and a private partner for a specified term, based on the pooling of their resources for the implementation of a public-private partnership project.

Kazakhstan

Let us begin with the analysis of the legal regulation of public-private partnership (PPP) in Kazakhstan, which is one of the most liberal countries in Central Asia in this area. Since the adoption of Law No. 379-V “On Public-Private Partnership” of October 31, 2015, Kazakhstan has taken significant steps toward creating conditions for active interaction between the state and the private sector. One of the features of PPP regulation in Kazakhstan is its more detailed approach, which is confirmed by the number of articles in the respective law: 59 articles covering a wide range of issues — from general principles and the mechanism for project implementation to procedures for interaction with private partners.

For comparison, Uzbekistan, although actively developing its PPP system, has limited its legislation to a smaller number of articles — 44, which may indicate a more general nature of normative regulation. This difference in scope and detail reflects different approaches to PPP regulation, with an emphasis on flexibility and simplification of procedures in Uzbekistan, as opposed to a more structured and detailed approach in Kazakhstan.

Kazakh legislation also provides for specific concepts reflecting the unique aspects of state regulation in the field of public-private partnership. One such concept is the “availability payment.” This is a monetary payment made from budgetary funds under a PPP agreement, intended to ensure the operational and qualitative characteristics of the PPP facility, as well as its availability to consumers. This payment depends on the individual technical and economic parameters of the facility, which contributes to more precise regulation of operating conditions and the quality of services provided.

Unlike Kazakhstan, in the legislation of Uzbekistan the concept of “availability payment” has a more general character. It is understood as payments from the public partner to the private partner made during the operation or maintenance of a PPP facility to ensure its availability. In the Uzbek legal model, there is no emphasis on operational and qualitative characteristics, nor on the individual technical and economic parameters of the facility. This makes the definition broader but at the same time less detailed compared to the Kazakh approach, where mechanisms are built in to directly link budgetary payments with performance and quality of services.

In addition, under Kazakh legislation the concept of “PPP web portal operator” is established. This is a legal entity appointed by the central authorized body for state planning and responsible for the functioning of electronic platforms on which interaction between state bodies and private partners is carried out, ensuring transparency and accessibility of information on PPP projects.

Special attention in Kazakhstan is paid to the concept of the “life cycle” in the context of PPP. This is an agreement covering the full cycle of works on the design, construction, creation, reconstruction, modernization, and operation of a PPP facility, including repair and maintenance. An important aspect is that under such an agreement the private partner undertakes obligations to ensure that the facility meets established technical and operational indicators throughout the entire term of the contract. This approach contributes to the long-term and sustainable functioning of facilities, increasing their quality and efficiency over the entire life cycle.

In Kazakh legislation, public-private partnership is divided into two main forms of implementation: institutional and contractual. Institutional public-private partnership is implemented through specially established PPP companies that operate under a PPP agreement. This approach implies deeper integrated interaction between the state and the private sector, where the PPP company becomes a key element for project implementation, ensuring effective coordination and management.

In contrast to institutional, contractual public-private partnership is carried out without the creation of a separate company. In this case, interaction between public and private partners is based directly on contracts regulating the rights and obligations of the parties within a specific project. This method allows for greater flexibility in project implementation but requires clear and detailed contractual regulation.

Furthermore, public-private partnership in Kazakhstan is divided into local and republican levels. Local PPP means that a project concerns only one region and is implemented within the framework of local authorities. Republican PPP, on the other hand, covers several regions or even the entire territory of the country, which requires coordination at the level of central state authorities and has a broader scope and impact.

Such division helps to precisely determine the boundaries of responsibility, implementation mechanisms, and levels of project management depending on their geographical coverage and complexity.

Evidence of the liberality of PPP regulation in Kazakhstan compared to Uzbekistan is the absence in Kazakh legislation of such detailed and complex procedures as are prescribed in Uzbekistan’s legislation regarding the approval of PPP project concepts.

In Uzbekistan, according to Article 18, the approval of a PPP project concept is regulated by a multi-layered system of approvals depending on the cost of the project. For projects up to one million US dollars, approval of the concept is carried out independently by the relevant state body, while for projects from one to ten million US dollars, approval is required by the authorized body. Projects costing over ten million US dollars are subject to approval by the Cabinet of Ministers of the Republic of Uzbekistan. In addition, in Uzbekistan the process of amending a project concept also goes through complex administrative approvals and requires initiative from various stakeholders, including state bodies and the Cabinet of Ministers.

In contrast, Kazakh PPP legislation has a more simplified approach. In particular, Article 49 of the Law of Kazakhstan on PPP states that a PPP agreement may be amended or terminated by agreement of the parties, which provides a greater level of flexibility in the implementation of projects. This allows private and public partners to adapt project decisions more quickly and respond to changing conditions without undergoing the complex and multi-layered approval procedures characteristic of Uzbekistan.

Another significant advantage of PPP regulation in Kazakhstan is the development of specialized methodologies by the PPP Development Center. These methodologies play a key role in the effective implementation of projects and ensuring transparency in their evaluation and management.

Firstly, the methodology for assessing the socio-economic effectiveness of PPP projects, developed and approved by the Center, makes it possible to comprehensively analyze the extent to which a project will contribute to the economic development and social stability of a region or the country. This approach allows for accurate assessment of potential investment returns and ensures that PPP projects will bring maximum benefit to the state and society.

Secondly, the methodology for risk allocation and assessment is an essential tool for reducing uncertainty and creating clear mechanisms for the distribution of responsibilities between the state and the private sector. It helps to detail the allocation of risks in a project, such as financial, operational, political, and legal risks, which contributes to the creation of more balanced and sustainable agreements between partners.

In addition, the methodology for accounting for contingent government obligations is developed for a more accurate consideration of potential future costs of the state that may arise during project implementation. This enables the government to predict and account for possible financial obligations in advance, which in turn reduces budgetary risks and increases the financial sustainability of projects.

These methodologies, developed and approved in Kazakhstan, are an important tool for enhancing transparency, reducing uncertainty, and improving the management of PPP projects. They provide a comprehensive approach to project evaluation and implementation, making the PPP system in Kazakhstan more mature and predictable, in contrast to the more flexible but less regulated mechanisms existing in Uzbekistan.

Compared to the more detailed legislation of countries such as Kazakhstan and Uzbekistan, Kyrgyzstan employs a more simplified system of legal regulation of public-private partnership (PPP). The Law of the Kyrgyz Republic No. 98 “On Public-Private Partnership” of August 11, 2021 contains only 21 articles, which reflects the intention to ensure flexibility and minimize bureaucratic procedures. Such a number of articles makes it possible to establish the basic framework for implementing PPP projects while maintaining sufficient freedom to adapt to changing economic and social conditions.

This simplified structure of legislation contributes to accelerating procedures and reducing administrative barriers, which makes the PPP system more accessible for private investors. Despite its compactness, the legislation of Kyrgyzstan regulates key aspects of PPP such as the forms of interaction between the state and the private sector, the fundamentals of contract conclusion, and financing mechanisms, which allows projects to be implemented effectively within limited resources.

One of the features of PPP regulation in Kyrgyzstan is the principle of inadmissibility of inspections by law enforcement and supervisory bodies within three years after the signing of a PPP agreement, with the exception of tax audits. This mechanism is aimed at creating favorable conditions for private partners and investors by minimizing administrative barriers and unjustified interference in the critical stage of PPP project development. Such a practice allows private partners to focus on effective project implementation without fear of improper interventions by controlling authorities.

The process of PPP project implementation in Kyrgyzstan includes several stages. The first stage is the initiation of a PPP project, where the main goals and objectives of the project are defined, as well as the priority areas for interaction between the public and private sectors. The second stage — preparation of the PPP project — involves detailed development of all conditions, including the financial model, risk assessment, planned timelines, and expected results. This stage forms the basis for the subsequent successful conduct of the tender and conclusion of the agreement. The third stage includes the conduct of a tender for the selection of a private partner, ensuring competition and transparency of the process. It is important to note that the tender commission must have an odd number of members and consist of at least five people, which helps avoid possible conflicts of interest and ensures more objective decision-making. The final stage is the conclusion and implementation of the PPP agreement, when the agreed conditions are put into practice. The implementation stage includes all the necessary steps for successful project realization, including monitoring of the parties’ obligations and possible adjustments as required.

In Kyrgyzstan, the selection of a private partner for PPP projects is carried out through a competitive procedure, ensuring transparency and openness at all stages. The tender consists of two main phases:

1. Qualification selection — at this stage, the competence and compliance of private partners with project requirements are assessed, including financial capacity, experience in implementing similar projects, and compliance with technical and operational standards.
2. Selection of the winner — at the second stage, a more detailed evaluation of proposals takes place, including financial and technical aspects, which allows the most suitable partner to be chosen for project implementation.

The tender is organized by the authorized state body in the field of PPP (the authorized body for organizing tenders) for projects with an expected investment amount exceeding 100 million soms (≈1.2 million USD). The tender is conducted in accordance with the Rules of Conduct of the Tender, approved by the Cabinet of Ministers of the Kyrgyz Republic. For projects with expected investments below this threshold, the tender may be conducted by state bodies, local self-government bodies, as well as state and municipal enterprises and institutions operating in the relevant sector.

Special attention should be paid to situations where the expected investment in a project exceeds one billion soms. In such cases, a PPP project may be awarded through direct negotiations, provided that the applicant meets the established qualification requirements. This approach makes it possible to accelerate the process and simplify cooperation with large investors while ensuring compliance with all necessary standards and guarantees.

Another interesting and important provision of Kyrgyz legislation is the procedure for disqualification of a winner if the information provided by them is found to be inaccurate. If the tender commission discovers that a participant submitted false data, and such inconsistency can be documented, the commission has the right to disqualify not only the winner but also other participants of the tender.

This decision has serious consequences: the disqualified participant is excluded from the tender and, more importantly, is prohibited from participating in PPP project tenders for five years. This measure is aimed at maintaining the integrity and transparency of the selection process, preventing fraud and manipulation, and increasing trust in the PPP system.

This rule is a significant instrument for ensuring good faith among participants and upholding high standards of transparency and honesty at all stages of PPP project implementation. It contributes to the formation of a healthy competitive environment, where dishonest practices are punished strictly and unequivocally, which in turn strengthens confidence both on the part of public authorities and private investors.

Tajikistan

The legal regulation of public-private partnership (PPP) in Tajikistan is in many respects similar to the legislative initiatives adopted in Uzbekistan, which is due to similar economic and social conditions as well as the common aspiration to strengthen the PPP framework in both countries. However, despite these shared features, Tajik legislation also contains certain specific provisions that differ somewhat from Uzbek norms.

As in Uzbekistan, PPP in Tajikistan is regulated through a system of laws aimed at creating transparent and sustainable conditions for attracting private investment into infrastructure and social projects. At the same time, Tajikistan demonstrates nuances in its approach to the procedures for selecting private partners and in establishing more flexible mechanisms for risk assessment and for ensuring the socio-economic effectiveness of projects.

Thus, the Law of the Republic of Tajikistan No. 907 “On Public-Private Partnership” of December 28, 2012 includes unique provisions regulating the PPP process. One such provision is the unsolicited proposal, or proposal submitted on the initiative of the private partner (Article 28), which represents any proposal made by a private partner not in response to a request by a contracting authority and outside of competitive procedures. These proposals may be submitted as private initiatives but must meet the established requirements and procedures set out by legislation in order to carry legal force.

In addition, Tajikistan has established the PPP Council — a collegial body composed of the heads of ministries and agencies, created by the Government of the Republic of Tajikistan. This body plays an important role in coordinating and making key decisions on PPP project implementation, ensuring their alignment with the state development strategy and enhancing the effectiveness of interaction between the public and private sectors.

Turkmenistan

Turkmenistan is taking confident steps towards the institutionalization of public-private partnership. The Law “On Public-Private Partnership” adopted on October 1, 2021 laid the legal foundations for cooperation between the state and the private sector, defining the principles of equal interaction, risk and responsibility sharing, as well as mechanisms for attracting investment into strategically important sectors of the economy. The document covers key areas of PPP application — from infrastructure projects to healthcare, education, transport, and energy.

Significant attention is devoted to the transparency of competitive procedures, the monitoring of project implementation, and the creation of an institutional framework in the form of authorized state bodies. Particular emphasis is placed on encouraging private initiative, including the possibility of project proposals originating from business.

Alongside the legislative framework for PPP, the state implements a comprehensive policy of support for entrepreneurship. One of the key tasks of Turkmenistan’s national development is to form a new quality of interaction between the state and business. State support includes:

• coordination of the activities of institutions involved in the development of small and medium-sized businesses,

• assessment and introduction of new forms of entrepreneurship,

• provision of preferences and subsidies.

An important legal foundation for PPP in the innovation sector has also been provided by the Law “On Innovation Activity” of August 16, 2014, in particular Article 17, which enshrines the principles of partnership in the innovation sphere: equality, open access of all forms of ownership to innovation policy, and consideration of the interests of the parties.

The development of PPP in Turkmenistan is also supported by other legislative acts, including the Law “On Hydrocarbon Resources” of December 30, 1996, which provides for production-sharing agreements, concessions, risk service contracts, and other forms of cooperation with foreign and private companies.

An important dimension of partnership development is the actual implementation of projects with private capital participation. The state provides financial support to the private sector, including the allocation of targeted preferential loans. One striking example is the provision of a loan of USD 2.4 billion to the Union of Industrialists and Entrepreneurs for 20 years at 1% per annum for the construction of the Ashgabat–Turkmenabat highway.

PPP is actively applied in such sectors as:

• construction and operation of infrastructure (including high-speed roads),

• mineral extraction,

• food industry and agriculture (for example, livestock complexes),

• fertilizer production,

• tourism and services,

• pharmaceuticals and textiles.

Examples of successful projects include livestock complexes in Ahal province, the transfer of the Avaza tourist zone to the business sector, and the active participation of private companies in government tenders for design and construction.

In addition, a state-private coordination committee has been established to implement joint initiatives in the social sphere, for example in the field of reproductive health with the support of the United Nations.

Thus, Turkmenistan demonstrates a comprehensive approach to PPP development, combining legislative regulation with broad practical implementation, large-scale business support, and a commitment to infrastructure modernization. However, further improvement of project implementation mechanisms, enhancing transparency, and expanding the participation of foreign investors remain pressing tasks.

Comparative analysis and conclusions

The conducted analysis shows that the legislation on public-private partnership (PPP) in the countries of Central Asia differs significantly both in terms of the level of detail and in the degree of institutional development. Despite the existence of a basic legal framework in all the countries under review, it is the effectiveness of its implementation that determines success in attracting investment and launching infrastructure projects.

Kazakhstan demonstrates the greatest maturity of the PPP system, thanks to extensive legislative regulation, the presence of specialized methodologies for project evaluation and management, as well as a well-designed institutional structure. This has enabled the country to implement more than 1,300 projects and become a regional leader in the number and variety of agreements.

Uzbekistan, despite adopting its legislation later, has shown a high dynamic of PPP development following the reforms of 2019–2021. Its legislation remains less detailed but more centralized, which provides flexibility, although at times creates difficulties due to the multi-layered approval procedures.

Kyrgyzstan focuses on simplicity and procedural flexibility, seeking to minimize bureaucratic barriers. This creates a favorable environment for small and medium-sized businesses, although the number of implemented projects remains relatively modest. At the same time, the introduction of transparent tender mechanisms and the protection of private partners from interference by supervisory authorities have had a positive impact on the investment climate.

Tajikistan, despite the early adoption of a PPP law, has not yet fully realized the potential of this form of cooperation. The existence of the PPP Council and the use of unsolicited proposals indicate a commitment to flexibility, but the overall number of projects in the country remains low due to limited institutional support and investment attractiveness.

Turkmenistan is the least active participant in the regional PPP process in formal legal terms but demonstrates significant success in project implementation in practice, thanks to strong state support for the private sector and targeted subsidization. However, the lack of open information and weak transparency limit the participation of foreign investors and complicate independent evaluation of efficiency.

Thus, it can be concluded that the effectiveness of PPP legal regulation in the countries of Central Asia directly correlates with the level of detail in legislation, institutional infrastructure, and the state’s willingness to actively partner with the private sector. Kazakhstan serves as a leader and an example of a successful PPP model, while the other countries still face institutional and regulatory challenges in order to achieve sustainable growth and attract investment into key sectors of the economy.

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