Public and Private Sector Partnership Law has been recently adopted in Afghanistan, and is considered an important step of the Government of Afghanistan towards creating joint investment opportunities for both private and public sectors.
According to this law, public and private partnership is referred to a joint contract signed between a government agency, and the private sector for the purpose of establishing infrastructure, and providing public services. Under these contracts, the obligations, risks, profits and losses are appropriately divided among the Government and the private sector. Furthermore, the private sector uses the premises of the Government and within a specific time conducts the tasks of the Government.
Article two of the law delineates its objectives as follows: management of affairs related to public-private sector partnership based on free competition, integrity, identification of join public and private investment opportunities, determining efficient manners of using public resources, and private sector’s technology and skills, and supporting foreign and domestic investment for project implementation.
According to provisions of the law, one of its basic principles is to execute a contract with the private sector based on rule of law, principles of justice, integrity, and free competition. The law further assures an equal treatment of all the participants (domestic or foreign) and their access to information at every stage of the partnership.
Another important aspect of the law is that through its article 12 it ensures non-discriminatory treatment of each participant (domestic or foreign) and no limitations on them in the biding process.
Article fifteen of the law provides a guarantee of the rights and privileges of the private sector while implementing partnership contracts. It ensures that the government will not interfere with the affairs of the private sector in the private public partnership, and that the private ownership is not regulated by this law but the relevant regulation.
The law covers vast fields of investment. According to its sixteenth article, the government may enter into a partnership agreement with the private sector for the purpose of energy production, communications, construction, culture, health, agriculture and water supply, education, environment and other legal activities.
According to the article seventeen of the law, the manners in which private and public partnership contracts are implemented are as follows: construction, use, and transfer, reconstruction, use and transfer, construction and transfer, construction, transfer of property, and use, construction, leasing, and transfer, design, construction, funding and use, exclusive use, lease, management, use and development agreement.
The last chapter of the law awards the authority of making rules and regulations to the Ministry of Finance of Afghanistan, and states that the law is in effect after it is signed by the President.
Additionally, the Afghan government has adopted other ways to encourage and support investors such as tax and fee exemptions, licensing facilitation, real and personal property privileges, and awarding exclusive rights to private sector in public-private partnership.All the above are useful and profitable opportunities to all domestic and foreign investors who would like to invest in Afghanistan under the provisions of this law.
Masnad Legal Consultancy