Public private partnership in the European Union and Georgian
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Date
2024
Authors
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Publisher
Ivane Javakhishvili Tbilisi State University Press
Abstract
In the modern world, the trend of strengthening relations between the state and private sectors through
the penetration of private capital into state property is getting stronger in terms of economic globalization.
In addition, the functions of the state and the tasks related to the privatization of individual areas of
the economy within the country are changing. In this regard, cooperation between state institutions and businesses
is an integral condition for the proper functioning of the market economy. In recent decades, PPP, a
very special degree of interaction between the state and business, has been actively developing in a number
of developed and developing countries.
The importance of PPP is widely recognized in the EU member states, which is reflected in their budget
allocations, legislation and relevant programs. While the development and implementation of modern strategies
of innovative development in the developed countries of the West, significant attention is paid to the
creation of organizational and legal guidelines for the formation of such projects of the PPP, which provide
various combinations of private industrial companies, universities, government agencies and independent
scientific and research laboratories to achieve specific scientific and technological results. On the other
hand, the participation of business in joint infrastructural projects with the state provides good results. In
particular, it contributes to the introduction of new technologies, the reduction of budget costs and the successful
implementation of projects.
In the EU member states PPP is recognized as one of the most important instruments for increasing
competitiveness. Despite the importance of PPP, its introduction in Georgia is quite slow. The failure of a
number of methodological issues for the transition to partnership relations between the state and business,
lack of proper experience of such partnership, underdevelopment of the legal and normative base, bureaucratic
obstacles hinder the development of SPC in Georgia. Therefore, the topic of the research is pressing.
In EU countries (France, Italy, Germany, etc.), public-private partnership has been used for many years.
As a result, the number of such projects is increasing significantly. It should be noted that the Public Private
Cooperation Agency was established on the basis of the Law on Public and Private Cooperation, and it began
to operate in February 2019.
On 7 May 2003, the European Commission published its Internal Market Strategy, which highlights the
need for clarification of legal issues related to PPP. On 16 September 2008 the EIB and the Commission launched
the European PPP Expertise Center (EPEC), which has significantly facilitated the development of PPPs
in member states.
According to the World Bank (Benchmarking Infrastructure Development 2023), Georgia has good results
in the evaluation components of public-private cooperation: (PPP project preparation, PPP project procurement,
PPP contract management and initiative offer (USP)). The country got the highest grade, 83 points,
for the PPP initiated by the private partner (USP). The evaluations in the other three components are as
follows: PPP project preparation – 65 points, project procurement – 74 and contract management – 79 points.
It should be stated as well that Georgia's scores in all four directions are much higher than the average
indicators of countries with similar incomes around the world. Thus, the development of public-private cooperation
in Georgia has a great perspective, which in turn will contribute to the country's economic development
and getting closer to the European Union.
Description
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Keywords
Citation
IX International Scientific Conference: "Challenges of Globalization in Economics and Business", Proceedings , Tbilisi, 2024, pp. 331-337