General Legal Framework for PPPs

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• General Legal Framework for PPPs
• Katja Kerschbaumer

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What is this presentation about?

• Separate law on PPPs?
• Contract Law
• Example Greek PPP law

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Separate law on PPPs?

• Can only provide general guidelines
• Too many different forms of PPPs
• Almost every PPP contract creates a PPP sui
  generis

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Contractual law

• Freedom of contract
• Contract can regulate anything as long as it does
  not contradict the countrys constitution or
  moral principles
• PPP contracts very often very complex and long
  several contracts
• Standardized PFI contracts HM treasury website
  http//www.hm-treasury.gov.uk/documents/public_pri
  vate_partnerships/key_documents/standardised_contr
  acts/ppp_keydocsstand_index.cfm

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Legal basis in Western Balkans
Albania Bosnia Herzegovina Kosovo Macedonia Montenegro Serbia
Separate Law on PPP - - - - - -
Law on Public Procurement
Law on Concessions
Civil code including sophisticated contract law
Ongoing PPPs in the health sector - -
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Example Greek law on PPPs(Law 3389/2005)

• Procedural changes
• - New process for the award of concession
  contracts to privately financed special purpose
  vehicle project companies
• - Ratification of concession agreements by
  parliaments abolished
• - Two new committees
• (1) Ministerial PPP Committee (MPPPC)
• (2) Special PPP Committee (SPPPP)

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Responsibilities of new committees

• Ministerial PPP Committee has overall control
  and power to coordinate PPP projects and award
  concessions
• Special PPP Committee Branch of the MoF
• will provide assistance to the MPPPC in
  administering PPPs.

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What does the selection process look like?

• List of selected projects which can be realized
  by means of PPP
• List submitted to MPPPC decides within 2 months
  whether suggested projects are to be included
  within ambit of the law
• If this is the case, the SPPPC is empowered with
  running the procurement process
• SPPPC renews list of projects at least every six
  months

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Scope of application

• The law applies to concessions that meet the
  following criteria
• Projects and services that fall within the
  jurisdiction of public authorities
• Projects where a privately owned Project Company
  undertakes most of the risks associated with the
  project
• Financing is arranged by the privately owned
  project company
• Total budgeted cost of project does not exceed
• 200,000,000 (exclusive of VAT), BUT exception!

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General principles

• Greek PPP law incorporates EU Directive
  2004/18/EC on the coordination of procedures for
  the award of public works contracts, public
  supply contracts and public service contracts.
• ? Principle of equal treatment of all bidders, no
  discrimination on the basis of nationality,
  transparency
• Law sets out framework of terms and issues that
  every Concession Agreement has to address
• Law expressly acknowledges that government
  entities may enter into direct agreements with
  financiers

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Licenses, assignments, tax treatment,dispute
resolution

• Deemed issuance of licenses, permits or consent
  (within 60 days)
• Assignments Project Company may assign its
  contractual rights to financial institutions in
  order to secure financing (can also be assigned
  to another single purpose vehicle)
• Tax treatment Project Company is granted certain
  tax treatment and any financial contribution
  payable by the Greek State is also exempt from
  VAT
• Dispute resolution Disputes to be resolved by
  means of arbitration in accordance with
  Concession agreement decision of arbitral
  tribunal is final and binding

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Conclusion

• Not necessarily a separate PPP law
• Basic prerequisites
• Well developed general (not PPP specific)
  legislation
• Civil code, Law on concessions
• ? From a legal point of view a PPP is a contract
  between the state and a private partner, where
  the state acts like any other private entity

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• Thank you!
• kkerschbaumer_at_worldbank.org

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PPP Action Plan