Construction and operation of the complex of kindergartens in Ust-Kamenogorsk

Project objective:

Narrowing of the deficit of places by means of creation of the preschool entities to 1640 places for the providing of children with the preschool training and education.

Project goal:

Construction and operation of 6 (six) kindergartens in Ust-Kamenogorsk on the basis of scheme of public-private partnership (concession).

Governance of the East Kazakhstan Region is interested in the effective co-operation with Kazakhstan and/or foreign investors, who able to offer necessary financing for the successful completion of a project.

Positive effects of a project: creation of the new possibilities for private investors, introduction of the effective management, quality of services rendered to the population. Successful completion of a project will open an investment potential of the mechanism of public-private partnership in the Republic of Kazakhstan.

Type of the Contract:

Scheme of BTO concession (build-transfer-operation). In accordance with this scheme, the Concessioner (Investor) builds the kindergarten and upon completion of the construction phase transfers it to the public property, then constructional project transfers to the entrepreneur’s operation for the period of 19 years, after which the Department of Education of East Kazakhstan Region determines the volume of government order.

Project implementation period:

• Construction period: 2015-2016 (during 10 months);

• Operation period: 2016-2034;

• Concession period: 20 years.

Type of activity:

Educational activities and providing of the additional services.

Financial and economic indicators of a project:

• Cost of a project: 4.1 billion KZT (22,5 million US Dollars);

• Project capacity: 6 (six) kindergartens for 1640 places;

• Services sales markets: population of Ust-Kamenogorsk, children of the preschool age, deficit in the childhood preschool entities is equal to more than 5000 places.

Measures of the state support:

• granting of the registered plots of land with the right of temporary use and with the anticipated expenses related to the connection of utility facilities;

• guarantees of consumption, at the rate of actual incurred expenses according to the reporting forms provided by the Concessioner to the Concession Provider (government order, payment of parents for the children’s food). Indexation to the rate of inflation is assumed to be.

Indicators of the project efficiency:

• Payback period: 101 months;

• Net Present Value (NPV): 1744,0 million KZT;

• Internal Rate of Return (IRR): 15,3 %.

Form of the Investor’s participation in the project:

The Concessioner is responsible for the designing, construction, equipping and financing of 6 (six) kindergartens with the total capacity of 1640 places. All constructional projects are provided with the plots of land and technical conditions for the connection of utility facilities. Construction and connection of all utility facilities will be implemented by Akimat of Ust-Kamenogorsk (Akimat – is a regional body of the executive power in the Republic of Kazakhstan). Investments to the project should be at the rate of 10% of own funds and 90% of borrowed funds in relation to the cost of concession project.

Available package of documents:

Technical and Economic Assessment (Feasibility Study) of the concession project is available.

Income sources under the project:

• recovery (compensation) of the investment expenses (expenses to the construction of a project are return to the Concessioner) on terms and volumes stipulated in the concession contract, during 7 years in equal shares;

• rendering of the additional paid services.

Property (Right of property):

Right of property to all funds will be transferred to the Department of Education of East Kazakhstan Region after completion of the construction.

Process of tender organization and determination of time schedule:

Organization of tender under the project is carried out in accordance with the Law of the Republic of Kazakhstan «Law concerning concessions». Minimum requirements for the participation in tender are specified by the representative of authority in accordance with the contract and based on the pre-determined legal, financial requirements, as well as requirements related to the availability (experience) to implement a project. The place and time of holding of a tender is determined after an official announcement of tender. Participants of a tender will be provided with the project structure and tender documentation.

New conditions of the Tender for selection of Concessioner:

Dividing of the complex of kindergartens by the packages: 1 (one) kindergarten – 1 (one) package.

Requirements to the Investor:

For the participation in the tender for selection of Concessioner, the potential Concessioner shall conform to the following qualifying requirements:

1) Potential Concessioner shall have financial and material resources for fulfillment of obligations under the concession contract;

2) Potential Concessioner shall be payable, not to be subject to the liquidation, his property shall not to be arrested, his financial and economic activities shall not to be stopped in accordance with the legislation of the Republic of Kazakhstan;

3) Potential Concessioner shall not to be brought to responsibility for non-fulfillment or improper fulfillment of his obligations under concession contracts concluded during the last three years on the basis of decision of the court entered to the legal force;

4) Potential Concessioner shall have owned capital equal to not less than 10 (ten) percent against cost of the offered concession project, or to provide bank guarantee to the amount equal to not less than 10 (ten) percent against cost of the offered concession project;

5) Potential Concessioner shall have financial reporting for the previous two comprehensive financial years, confirmed by the audit report.