Resolution of the President of the Republic of Uzbekistan No. PP-3874 dated 19.07.2018 "On additional measures for acceleration of investment and infrastructure projects in 2018-2019" (further referred to as PP-3874) has been passed to improve the procedures for implementing investment and infrastructure projects.
In this regard PP-3874 introduces a number of changes to the current procedures, specifically to the Resolution of the President No. PP-3550 dated 20.02.2018.
- Overview of changes introduced by PP-3874
- PP-3874 abolishes the requirement for mandatory development and examination of pre-feasibility study/pre-technical and economic calculation (further referred to as the PFS/PTEC). This means PFS/PTEC no longer needs be approved and becomes discretionary.
- Moreover, in accordance with section 6 of PP-3874 SUE "Center for Complex Expert Examination of Projects and Import Contracts of the National Project Management Agency under the President of the Republic of Uzbekistan" (further referred to as the Center) conducts complex expert examination of pre-project documentation1 for the following projects:
- Projects financed through the budgetary system of Uzbekistan, Fund for Financing of State Development Programs and Fund for Reconstruction and Development, this includes:
- Examination of model infrastructural projects. The Center conducts an initial examination of the model project, whilst further examination is conducted by the SUE "Examination of Town-planning Documentation" under the Ministry of Construction.
- Examination of individual, investment and infrastructural projects with a total value exceeding 10 billion sums.2 Projects with a total value less than 10 billion sums are subject to examination by the SUE "Examination of Town-planning Documentation" under the Ministry of Construction.
- Projects implemented through separate decisions of the President, which provide for exemption from taxes and other mandatory payments.
- Projects, with a total value exceeding US$5 million and which are implemented by governmental authorities, business entities with state ownership in authorized capital of 50 percent or more and business entities in which 50 percent of authorized capital or more is owned by a legal entity with 50 percent or more state ownership.
- Projects envisaging extraction of strategic natural resources, except for projects implemented through Production Sharing Agreements, which provide for special procedures of development and approval of documentation.
- PP-3874 makes amendments to Resolution No. PP-3550 and its annexes. In particular, PP-3874 approves a new edition of Annex 1 "Regulation on the Procedure for development, conducting complex expert examination and approval of pre-project and project documentation of the investment and infrastructure projects." Amendments to PP-3550 itself include, among others, new streamlined fees for services of the Center and a new threshold for conducting examination of terms of reference.
- New edition of Annex 1
New edition of Annex 1 contains the following changes:
- Annex 1 is applicable to the projects listed in clause 6 of PP-3874 (see above), and the following projects are not subject to it:
- Projects with participation of the international financial institutions and foreign governmental financial institutions (further referred to as the IFI/FGFO);3
- Projects implemented through separate decisions of the President, which provide for special procedures of development, conducting examination and approval;
- Projects implemented through Production Sharing Agreements;
- Projects implemented by private entrepreneurs (irrespective of source of funding), except projects involving exploitation of strategic natural resources;
- Projects, where not less than 70 percent funding is made by way of direct foreign investment, except projects involving exploitation of strategic natural resources.
- Requirement for mandatory development and examination of pre-feasibility study/pre-technical and economic calculation is abolished. Consequently, the process of developing and examining pre-project documentation becomes two-fold, involving:
- Development and examination of terms of reference;
- Development and examination of feasibility study or technical and economic calculation (further referred to as the FS/TEC).
Moreover, a new edition of Annex 1 provides an exact list of documentation to be provided for the examination of terms of reference and FS/TEC. However, the time limit for examination of FS/TEC is increased and is equal to 30 business days (previously — 20 business days).
- In case of FS/TEC being not approved after one year from the date of positive conclusion of the Center, pre-project documentation shall be re-examined by the Center.
- The Center shall not conduct examination of pricing of FS/TEC if the Center has previously issued a positive conclusion for the respective contract.
- Amendments to Annex 2
PP-3874 provides for several amendments to the Annex 2 "Regulation on the procedure for conducting complex expert examination of tender documents and Terms of Reference for the state procurement of goods (works, services)." In particular, thresholds for tender documentation to be subject to examination in the Center are now set with reference to Minimum Monthly Wage4 instead of US$.5 Another change introduced in Annex 2 is the inclusion of clause 31 listing state procured goods and services, to which the Annex is not applicable.
- Amendments to Annex 3
PP-3874 introduces the following changes to Annex 3 "Regulation on procedure of expert examination and contract registration":
- Fees for examination shall not be charged for the examination of import contracts funded from the state budget, Fund for Reconstruction and Development and credits raised under the guarantee of the Government of Uzbekistan.
- Import contracts funded by the IFI/FGFO are excluded from the sphere of application of the Annex 3.
- Newly inserted section 61 lists import contracts, to which the Annex shall not be applied.
1. Pre-Project Documentation includes: 1. Terms of Reference and 2. FS/TEC. Other documents, such as PFS/PTEC, financial and economic report have been excluded and are no longer mandatory part of pre-project documentation.
2. Approx. US$1.2 million.
3. IFI/FGFO funded projects are regulated by PP-3857 dated 16.07.2018.
4. Approx. US$23.
5. Overall, thresholds became higher. For instance, previous threshold for tender documentation to be recognized as subject to examination was US$100,000; in the latest edition the threshold is approximately equal to US$140,000.
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