1. The World Bank General Legal Framework for PPPs Katja Kerschbaumer

2. The World Bank September 17, 2007Legal Framework for PPPs What is this presentation about? Separate law on PPPs? Contract Law Example: Greek PPP law

3. The World Bank September 17, 2007Legal Framework for PPPs Separate law on PPPs? Can only provide general guidelines Too many different forms of PPPs Almost every PPP contract creates a PPP sui generis

4. The World Bank September 17, 2007Legal Framework for PPPs Contractual law Freedom of contract Contract can regulate anything as long as it does not contradict the country’s 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_private_partnerships/key_ documents/standardised_contracts/ppp_keydocsstand_inde x.cfm

5. The World Bank September 17, 2007Legal Framework for PPPs Legal basis in Western Balkans AlbaniaBosnia & Herzegovina KosovoMacedoniaMontenegroSerbia Separate Law on PPP ------ Law on Public Procurement ++++++ Law on Concessions ++++++ Civil code including sophisticate d contract law ++++++ Ongoing PPPs in the health sector ++-+-+

6. The World Bank September 17, 2007Legal Framework for PPPs 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”)

7. The World Bank September 17, 2007Legal Framework for PPPs 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.

8. The World Bank September 17, 2007Legal Framework for PPPs 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

9. The World Bank September 17, 2007Legal Framework for PPPs Scope of application The law applies to concessions that meet the following criteria: (i) Projects and services that fall within the jurisdiction of public authorities (ii) Projects where a privately owned Project Company undertakes most of the risks associated with the project (iii) Financing is arranged by the privately owned project company (iv) Total budgeted cost of project does not exceed € 200,000,000 (exclusive of VAT), BUT exception!

10. The World Bank September 17, 2007Legal Framework for PPPs 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

11. The World Bank September 17, 2007Legal Framework for PPPs 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

12. The World Bank September 17, 2007Legal Framework for PPPs 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

13. The World Bank September 17, 2007Legal Framework for PPPs Thank you! kkerschbaumer@worldbank.org

14. The World Bank September 17, 2007Legal Framework for PPPs PPP Action Plan CoordinationSector analysisGuidance/ Support Legal Dissemination ▪Establish Advisory council ▪Coordinate competencies ▪Research and feasibility studies ▪Support for PPP research ▪PPP Guidance materials ▪Standard Documents ▪Legal research and analysis ▪Standardized materials and documents ▪Workshops/lect ures ▪Website ▪Communicatio n Strategy