© OECD A joint initiative of the OECD and the European Union, principally financed by the EU Martin Oder, LL.M. Legislative Options for Regulating Concessions and PPPs Ministry of Economy, Trade and Energy - OECD/Sigma Regional Workshop on Concessions / Public-Private Partnerships Tirana, December 2007

© OECD A joint initiative of the OECD and the European Union, principally financed by the EU Need for regulating PPP and Concessions? (I) l 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 l 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 2

© OECD A joint initiative of the OECD and the European Union, principally financed by the EU Need for regulating PPP and Concessions ? (II) l 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) l Private sector -provision of services / works -improving working / operating methods (“competitive edge”) -appropriate RoI -clear legal and institutional framework 3

© OECD A joint initiative of the OECD and the European Union, principally financed by the EU EU Legislation on PPP and Concessions l No specific provisions on procurement, PPPs and/or concessions in the EC Treaty => however, general principles of the Treaty are applicable l Public Procurement Directives -Dir 2004/18/EG („Classic Dir“) -Dir 2004/17/EC (“Utilities Dir”) l ECJ case law - preliminary rulings and infringement proceedings 4

© OECD A joint initiative of the OECD and the European Union, principally financed by the EU Commission Guidance („Soft Law“) l Green Paper on PPP and Community Law on Public Contracts and Concessions (COM (2004) 327 final) l Communication on PPP and Community Law on Public Procurement and Concessions (COM (2005) 569 final) l Explanatory note on Competitive Dialogue procedure l Interpretative Communication on Concessions under Community Law (OJ 2000/C 121/2) 5

© OECD A joint initiative of the OECD and the European Union, principally financed by the EU Procurement of PPP Contracts l 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 6

© OECD A joint initiative of the OECD and the European Union, principally financed by the EU Public Works Concessions l Works concession -is public works contract but -remuneration consists in the concessionaire’s 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) 7

© OECD A joint initiative of the OECD and the European Union, principally financed by the EU Public Service Concessions l 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 8

© OECD A joint initiative of the OECD and the European Union, principally financed by the EU Specific Procedure for PPP: Competitive Dialogue l New, additional procedure in Classic Dir 2004/18/EC l 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 9

© OECD A joint initiative of the OECD and the European Union, principally financed by the EU Legislative Options for Member States (I) l 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)) l 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 10

© OECD A joint initiative of the OECD and the European Union, principally financed by the EU Legislative Options for Member States (II) l (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 l 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” l 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 11

© OECD A joint initiative of the OECD and the European Union, principally financed by the EU Legislative Options for Member States (III) l 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 12

© OECD A joint initiative of the OECD and the European Union, principally financed by the EU Examples of National PPP-Legislation (I) Member States with specific PPP legislation, e.g. -France Partnership Contract (L’Ordonance n° of ), concessions contracts (sapin law) -Poland Act of 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) 13

© OECD A joint initiative of the OECD and the European Union, principally financed by the EU Examples of National PPP-legislation (II) -Greece PPP Law (3389/2005 of September 2005) -Italy DBF schema (Codice dei Contratti Pubblici di Lavori, Servizi e Forniture, 2006) -Portugal PPP contracts (Decree-law 86/2003) Member States without specific PPP legislation -Austria, Ireland, UK, Hungary 14

© OECD A joint initiative of the OECD and the European Union, principally financed by the EU Thank you for your attention! Martin Oder HASLINGER / NAGELE & PARTNERS Am Hof 13, A-1010 Vienna Phone +43/1/ Fax +43/1/