Master Slide

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OECD/SIGMAConcessions and Public Private
PartnershipsLegislative Options for Regulating
Concessions and PPPs Ankara, 10-11 March 2008
Martin Oder, LL.M.
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Need for regulating PPP and Concessions? (I)

• EU
• Internal Market (i.e. freedom of establishment,
  freedom to provide services) throughout the
  Member States
• no illegal state aid
• effective competition and legal clarity for the
  award of public contracts and concessions (EC
  public procurement Directives)
• selection of private partner in accordance with
  principles of equality, transparency,
  proportionality and mutual recognition
• Member States
• obligation to comply with EC-law (in particular
  EC procurement Directives)
• creation of functioning framework for PPP
  projects
• compliance with Maastricht criteria / budgetary
  constraints
• improvement of services in the general interest,
  infrastructure

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Need for regulating PPP and Concessions ? (II)

• Public sector
• procurement of services / works (eg
  infrastructure projects)
• need for private funding due to budget
  constraints
• wish to benefit from know-how of private sector
• better value for money (efficiency)
• Private sector
• provision of services / works
• improving working / operating methods
  (competitive edge)
• appropriate RoI
• clear legal and institutional framework

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EU Legislation on PPP and Concessions

• No specific provisions on procurement, PPPs
  and/or concessions in the EC Treaty
• gt however, general principles of the Treaty are
  applicable
• Public Procurement Directives
• Dir 2004/18/EG (Classic Dir)
• Dir 2004/17/EC (Utilities Dir)
• ECJ case law
• preliminary rulings and infringement proceedings

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Commission Guidance(Soft Law)

• Green Paper on PPP and Community Law on Public
  Contracts and Concessions (COM (2004) 327 final)
• Communication on PPP and Community Law on Public
  Procurement and Concessions (COM (2005) 569
  final)
• Explanatory note on Competitive Dialogue
  procedure
• Interpretative Communication on Concessions under
  Community Law (OJ 2000/C 121/2)

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Procurement of PPP Contracts

• PPP contract
• no legal definition
• no clear legal concept
• umbrella-term for any contractual cooperation
  between public and private sector
• from public procurement point of view public
  (works or services) contract or (works or
  services) concession or excluded contract

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Public Works Concessions

• Works concession
• is public works contract but
• remuneration consists in the concessionaires
  right to exploit the works (together with payment
  form authority)
• requires transfer of (essential) risks connected
  with the exploitation of the works
• is excluded from scope of Utilities Dir
  (2004/17/EC) but fundamental EC Treaty principles
  apply
• subject to specific provisions in Classic Dir
  (2004/18/EC)

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Public Service Concessions

• Services concession
• is public services contract but
• remuneration consists in the right to exploit the
  services (together with payment from authority)
• requires transfer of (essential) risks connected
  with the operation of services
• is excluded from scope of both the Classic Dir
  (2004/18/EC) and the Utilities Dir (2004/17/EC)
  but fundamental EC Treaty principles apply

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Specific Procedurefor PPP Competitive Dialogue

• New, additional procedure in Classic Dir
  2004/18/EC
• For the award of particularly complex
  contracts, i.e. where
• the contracting authority is not objectively
  able to specify
• - the technical means capable of satisfying
  its needs and/or
• - the legal and/or financial make up of a project

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Legislative Options for Member States (I)

• EC Treaty obliges Member States to comply with
  primary and secondary EC law
• EC Treaty provisions and EC regulations directly
  applicable in Member States (eg contract
  thresholds), no need for implementation into
  national law
• Obligation to implement EC procurement Dir into
  domestic law (administrative practices are not
  appropriate (ECJ, Comm/A, C-212/02))
• ECJ (Comm/G, C-433/93) incorporation in specific
  legislation not necessarily required, general
  legal context may be adequate for the purpose of
  implementation, provided that
• it guarantees the full application of the
  Directive in a sufficiently clear and precise
  manner
• Individuals can ascertain the rights given to
  them by Directive to the full extent and can rely
  on them before national courts
• Specific public procurement legislation on
  national level highly advisable

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Legislative Options for Member States (II)

• (Makedoniko Metro, C-57/01) Member States are
  free to provide rules for situations not covered
  by the procurement Directives provided that they
  comply with general EC Treaty principles
• No need for specific PPP legislation on national
  level
• but Member States are free to enact specific PPP
  legislation provided that this legislation
  complies with EC law (especially with EC Treaty
  principles and public procurement rules)
• Member States can opt to implement new procedure
  competitive dialogue
• No need for specific legislation on the award of
  services concessions (and works concessions in
  Utilities Sector) on national level
• Member States are free to provide for specific
  rules as long as they do not collide with
  fundamental EC Treaty principles
• clear and precise provisions on scope of
  legislation, definition of and obligations on
  contracting authorities and contracts covered

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Legislative Options for Member States (III)

• If Member State chooses to enact specific PPP
  and/or concessions law, then it should help the
  implementation of functioning PPP practice
• clear legal and institutional framework
• removal of barriers for PPP projects (e.g. tax)
• no overregulation danger to development of
  functioning PPP practice
• bankable model for international investors and
  financial institutions
• sector specific regulations might be helpful /
  necessary

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Examples of NationalPPP-Legislation (I)

• Member States with specific PPP legislation, e.g.
• France Partnership Contract (LOrdonance
  n2004-559 of 17.6.2004), concessions contracts
  (sapin law)
• Poland Act of 17.6.2005 on Public Private
  Partnership
• Germany PPP-Acceleration Act of 2005 (e.g.
  abolishment of real estate transfer tax)
• Romania PPP law (GEO No. 34/2006)

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Examples of National PPP-legislation (II)

• GreecePPP Law (3389/2005 of September 2005)
• ItalyDBF schema (Codice dei Contratti Pubblici
  di Lavori, Servizi e Forniture, 2006)
• PortugalPPP contracts (Decree-law 86/2003)
• Member States without specific PPP legislation
• Austria, Ireland, UK, Hungary

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Thank you for your attention!
Martin Oder HASLINGER / NAGELE PARTNERS Am Hof
13, A-1010 Vienna Phone [phone] Fax
43/1/718 66 80-30 email office.wien_at_haslinger-na
gele.com