Since the Law of Mongolia on Concessions was adopted in 2010, it has established a legal framework for public-private partnership by granting concessions to private investors to use existing infrastructure facilities owned by the state, and to construct new infrastructure facilities for the purpose of providing services.
However, the current Concessions law is inadequate to meet the needs of fundamental principles of public-private partnership such as planning, granting and effective risk and debt management.
The implementation of the Concessions law raised the following issues:
- Illegal selection of participants for granting a concession
- Concluding an invalid direct agreement
- Ineffective concession which creates significant burden of the state budget
- Absence of specific regulations and policies of concession procedure guidelines.
- Lack of related administrative authorities’ involvement on selecting, contracting, implementing, or overseeing concession
- Risk management and risk allocation methodologies
Therefore, the government submitted the first draft of Law on Public-Private Partnership on April 6, 2022, and requested to repeal the Law of Mongolia on Concession. The purpose of the law is to support private sector’s participation and investment in the implementation of public-private partnership in the field of public infrastructure and public services projects, and to create favorable legal environment for long-term efficient cooperation.