The Goals of Public-Private Partnership
The development of educational infrastructure through public-private partnership instruments is governed in Georgia by the Law on Public and Private Cooperation. Article 3 of that law defines the goals of cooperation: increasing the effectiveness of projects; satisfying the public interest through the creation of new public infrastructure and/or the provision of public services and/or the improvement of existing ones; attracting private financing; increasing the effectiveness of the expenditure of public finances; the distribution of risks between the public and private sectors; and the use of the private partner’s know-how.
In the educational context these goals take a concrete form: the construction of new schools, campuses and learning spaces, the rehabilitation of existing institutions and the raising of the quality of services with private resources, balancing the fiscal burden of the state. Knowledge of the goals of the law is the first filter in preparing the concept of a project — a project that does not serve these goals will not pass the approval stage.
The Sectors and the Place of an Educational Project
Article 6 of the law defines the sectors of cooperation broadly: public-private cooperation may be carried out in any sector of public infrastructure and public services, unless otherwise determined by the Government of Georgia. The Government may further define priority sectors where cooperation is particularly welcome.
The sphere of education is a natural part of this frame: schools, educational institutions and learning infrastructure are classic examples of public infrastructure and public services. The norm of sectoral openness also means that the concept of a project need not overcome any sectoral prohibition — the only question is whether the project fits into the priority frameworks.
The Project and the Stages of Its Implementation
Article 11 of the law provides that a public-private partnership project is implemented in accordance with the process defined by law, which comprises several stages: the identification and initiation of the project, its preparation, the selection of the private partner, the implementation of the project and the post-implementation assessment.
For an educational project this staged structure creates a practical guide: from the idea of expanding a school network to the commissioning of a functioning school, each step corresponds to a procedure provided for by law. Experience shows that skipping stages or incompletely documenting their results is blocked at the selection or approval stage, which is why the output of each stage must be planned in advance.
Initiation, Preparation and Approval
Article 13 opens the administrative path of this process. The initiation of a project is carried out by the authorised body; after identification it prepares the concept of the project and submits it for consideration to the Agency and the Ministry of Finance, which prepare recommendations and a conclusion within the established period. The concept, together with the recommendations and the conclusion, is submitted to the Government.
The decision to start preparation rests on four criteria: the strategic or social significance of the project; the preliminary assessment of its economic impact; the availability of public finances for the project; and the assessment of the fiscal risks it may cause. Where approved, the authorised body prepares financial, technical and economic studies assessing the value of the project, its social and economic results, the availability of the budget and the social and environmental impact. The results, together with the conclusion of the Ministry of Finance, are submitted to the Government before the selection stage, and the Government decides on approval, refusal or reworking.
The Principal Conditions of the Contract
Article 21 of the law defines the mandatory content of the contract: the object of the contract, the scope and characteristics of the work to be performed; the manner of distributing and transferring property rights; the term of operation; availability remuneration, result-based remuneration or other payments; payments to be made by the public partner; and the grounds, manner and consequences of the termination of the contract.
The contract is concluded for a definite term, and the principles of determining that term are established by a legal act of the Government. In the documentation of an educational project it is precisely these conditions that become the centre of negotiations between the investor and the public side, so their accuracy must be a faithful continuation of the approved concept.
Frequently Asked Questions
Can cooperation take place in education?
Yes. Under Article 6, cooperation is possible in any sector of public infrastructure and services, unless the Government has determined otherwise.
What stages does a project comprise?
Under Article 11 — identification and initiation, preparation, selection of the private partner, implementation and post-implementation assessment.
Who initiates a project?
Under Article 13, initiation is carried out by the authorised body, which submits the concept to the Agency and the Ministry of Finance for a conclusion.
What must the contract contain?
Under Article 21 — the object, the scope of work, property rights, the term, the types of remuneration and the manner of termination.
How We Help on Legal.ge
On Legal.ge we assist at every stage of structuring an educational partnership: we will assess the project’s compliance with the goals and criteria of the law, prepare the legal part of the concept and the studies, plan the selection procedure and draft the conditions of the contract. Contact our team already at the concept stage.