A concession agreement as an effective mechanism for the development of innovative activities in the housing and utilities sector

Abstract

The state of the housing and utilities sector is one of the most significant indicators of the level of development of the national economy. In many countries, the state of the housing and utilities sector does not fully satisfy needs of the population. Under the slow economic development, an innovative development path can ensure high quality and reliability of services provided. The concession mechanism of cooperation between government and businesses should become a key tool which can attract investment in the development of innovative activities in the housing and utilities sector. The author has developed a support scheme for the investment and innovation project implemented in the housing and utilities sector using a concession agreement within the PPP which ensures stability of the industry and improves quality of services provided. The scheme of concession tools can be used to achieve a social and economic effect. The article presents a method for assessing the economic effect of concession agreements used when implementing the investment and innovation projects in the housing and utilities sector taking into account risks. It can balance interests of the government and housing and utilities companies. The concession mechanism will contribute to the development of the most promising areas of the housing and utilities sector.