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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, 11-12 December 2007. Martin Oder, LL.M. Need for regulating PPP and Concessions? (I). EU

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Martin Oder, LL.M.

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  1. Legislative Options for Regulating Concessions and PPPs Ministry of Economy, Trade and Energy - OECD/SigmaRegional Workshop on Concessions / Public-Private Partnerships Tirana, 11-12 December 2007 Martin Oder, LL.M.

  2. 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 2

  3. 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 3

  4. EU Legislation on PPP and Concessions • No specific provisions on procurement, PPPs and/or concessions in the EC Treaty => 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 4

  5. 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) 5

  6. 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 6

  7. Public Works Concessions • 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

  8. 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 8

  9. 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 9

  10. 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 10

  11. 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 11

  12. 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 12

  13. Examples of NationalPPP-Legislation (I) • Member States with specific PPP legislation, e.g. • France Partnership Contract (L’Ordonance n°2004-559 of 17.6.2004), concessions contracts (sapin law) • PolandAct of 17.6.2005 on Public Private Partnership • GermanyPPP-Acceleration Act of 2005 (e.g. abolishment of real estate transfer tax) • RomaniaPPP law (GEO No. 34/2006) 13

  14. 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 14

  15. Thank you for your attention! Martin Oder HASLINGER / NAGELE & PARTNERS Am Hof 13, A-1010 Vienna Phone +43/1/718 66 80-616 Fax +43/1/718 66 80-30 email: office.wien@haslinger-nagele.com

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