PUBLIC PRIVATE PARTNERSHIP – CROATIAN EXPERIENCE Kamilo Vrana, B.Sc.E.E. Managing Director Beograd, November 18, 2010.

1.LAUNCHED PPP PROJECTS AND LESSONS LEARNED 2.LEGAL FRAME 3.INSTITUTIONAL FRAME 4.SEE PPP NETWORK Content 2

3 1. LAUNCHED PPP PROJECTS Highways (concession): Istrian Y Zagreb-Macelj Education (PFI): renovation or construction of more than 30 schools and sport halls in Varaždin county Secondary school in Koprivnica Sport (PFI): sport halls in Split, Zagreb and Varaždin

4  Long-term relationship and goals  strategic approach  PPP program (pipeline)  fiscal sustainability and stability  New role of public sector  setting of standards and supervision of quality of delivered services, instead of delivery of services itself  output specification (standards of delivered services) instead of input specifications (description of means for delivery of services)  Whole life costs, including costs of occurrence of risk-related events  Net Present Value (NPV)  risk matrix  Public Sector Comparator (PSC) 1. LESSONS LEARNED - FUTURE AS CHALLENGE

5 1. LESSONS LEARNED – NET PRESENT VALUE (NPV)

6 1. LESSONS LEARNED – RISK MATRIX

7 1. LESSONS LEARNED – PUBLIC SECTOR COMPARATOR (PSC)

8 1.From to year: Act on ownership and other legal matters (OG 91/96, 73/00, 114/01) Utilities Act (OG 26/03, 82/04, 110/04) Public Roads Act (OG 180/04), Other sectoral regulations (concessions) 2.From to : Guidelines for implementation of contractual forms of PPP (OG 98/06) Ordinance on granting prior approval for PPP contract concluding based on the PFI model (OG 20/07) 3.From : Act on PPP adopted in the Croatian Parliament on , entered into force on (OG 129/08) 4 regulations, adopted on the Government session on , entered into force on (OG 56/09) Ordinance on the organization and keeping of the Register of the PPP contracts 4.“Step-by-step” guide to PPPs published on and available on 2. PPP LEGAL FRAME DEVELOPMENT IN RoC

9 Public procurement, concessions and PPP – EU acquis communautaire  Directive 2004/18/EZ (award procedures of public procurement contracts for goods, works and services)  Directive 2004/17/EZ (award procedures of contracts with entities operating in water, energy, transport and postal services)  Green Paper COM(2004) 327 on PPP  Eurostat decision 18/2004 on deficit and dept  Commission interpretative communication 2008/C 91/02 on the application of the Community law on public procurement and concessions to institutionalized PPPs – RoC get the status of EU candidate – Opening of the accession negotiations with the EU – Fulfillment of benchmarks for beginning of negotiations within Chapter 5 - Public Procurement 2. LEGAL FRAME – HARMONISATION WITH EU

10 2. LEGAL FRAME – CHAPTER 5, PUBLIC PROCUREMENT a.Public procurement (contract award procedures) Public Procurement Act (OG 110/07 and 125/08) b. Concessions (contract award procedures) Concession Act (OG 125/08) c. Public Private Partnership (PPP) PPP Act (OG 129/08) d. Remedies (common within the whole public procurement system) New Act on State Commission for the Supervision of the Public Procurement Procedures (DKOM) – in the parliamentary procedure

11 2. PPP LEGAL FRAME PPP Act (OG 129/08) PPP Regulations:  Regulation on the criteria for Assessment and Approval of the PPP Projects (OG 56/09)  Regulation on the Content of PPP Contract (OG 56/09)  Regulation on the Supervision of the Implementation of PPP Projects (OG 56/09)  Regulation on Training of Participants in Procedures for PPP Projects Preparation and Implementation (OG 56/09)  Ordinance on the Organisation and Conduction of the Register of PPP Contracts

12 1. STEP: PPP Project Proposal 2. PPP LEGAL FRAME - PROJECTS EVALUATION & APPROVAL

13 2. STEP: Tendering Documentation 2. PPP LEGAL FRAME - PROJECTS EVALUATION & APPROVAL

14 3. STEP: Contract Final Draft 2. PPP LEGAL FRAME - PROJECTS EVALUATION & APPROVAL

15 1.Recording of PPP contracts into PPP Register - Ordinance on organization and keeping of the Register of PPP contracts 2.Follow-up of the execution of contracted PPP projects - Regulation on the Supervision of the Implementation of PPP Projects 3.Training and education (17 modules, within three programs: basic, advanced, sectoral) - Regulation on Training of the Participants in Procedures for PPP Projects Preparation and Implementation 2. PPP LEGAL FRAME - PROJECTS FOLLOW-UP & EDUCATION

16 AGENCY FOR PUBLIC PRIVATE PARTNERHIP:  Leading national body for implementation of the PPP Act in the Republic of Croatia  Evaluate and approve PPP project proposals, related tendering documentations and final contract drafts  Organise and conduct the Registar of PPP contacts  Supervise projects/contracts execution  Cooperate with PPP units in other countries and with PPP units and centres of knowledge in international organisations  Provide education programs and organise education and training of participants in preparation and implementation of PPP projects EDUCATION AND TRAINING = THE KEY SUCESS FACTOR!!! CRUCIAL ROLE OF THE MINISTRY OF FINANCE CONCERNING FISCAL RISKS AND BUDGET PLANNING! 3. PPP INSTITUTIONAL FRAME

17 Administrative Court Legal protecttion (2. stage) State Commission for Supervision of Public Procurement Procedure Legal protection (1. stage) MELE, Directorate for PP System Public Procurement (policy, legislation, supervision, education) Agency for PPP Public Private Partnership (project assessment and approval, register, execution follow-up, education) Ministry of finance Concessions (policy, legislation, register, budget planning, fiscal risks assessment) Central Procurement Office Central Public Procurement (awarding procedures for central governmental bodies) Concession Provider Concession Award (regulation for particular sectors) Key institutions, their authorities and relations 3. INSTITUTIONAL FRAME – CHAPTER 5, PUBLIC PROCUREMENT

18 SouthEast European PPP Network (SEE PPP Network): Initiative in RCC framework Croatian APPP – implementing body (Initial Secretariat) Cooperation between the competent PPP authorities in order to create harmonised regional legal and institutional frame and favorable conditions for investments including preparation and implementation of national and cross-border PPP projects Launching of joint initiatives for crossborder PPP projects 4. SOUTHEAST EUROPEAN PPP NETWORK

19 Objectives: Alignment with the EU standards and creation of favorable investment climate Synergy of knowledge and experience in the preparation of cross-border PPP projects Opening new economic opportunities and improving the competitiveness of national economies Investment promotion in the development of public infrastructure in terms of crisis 4. SOUTHEAST EUROPEAN PPP NETWORK

20 Kamilo Vrana, B.Sc.E.E. Managing Director THANK YOU FOR YOUR ATTENTION! Phone: Fax: –