TABLE OF CONTENTS

TABLE OF CONTENTS................................................................................................
ANNEX 5-2: CONCESSION CONTRACTS & PUBLIC-PRIVATE
PARTNERSHIPS.............................................................................
1. WHAT IS A CONCESSION?................................................................................ 2
1.1 Definition & application framework...........................................................
1.2 artic!laritie" in t#e application of conce""ion".......................................
2. $%&IC'(I)ATE A(TNE(SHIS...................................................................... *
2.1 W#at i" a !+lic'ri,ate artner"#ip -.?............................................
2.2 /orm" of !+lic'ri,ate artner"#ip" -"............................................
2.0 " compare1 to ot#er t2pe" of contract.............................................
2.3 Critical "!cce"" factor" for contract"..............................................
2.4 A1,anta5e" an1 1raw+ack" of t#e application of "..........................
2.5.1 Advantages of the application of PPPs.............................................15
2.5.2 Potential drawbacks of the application of PPPs................................19
2.6 Step" in awar1in5 an1 implementin5 a contract.............................
2.* ro7ect" in t#e E$ an1 e8ample" of "ector" w#ere " are
applie1...................................................................................................
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ANNEX 5-2: CONCESSION CONTRACTS & PUBLIC-
PRIVATE PARTNERSHIPS
1. WHAT IS A CONCESSION?
1.1 Defii!i" & #$$%i&#!i" f'#(e)"'*
Conce""ion" are not 1efine1 in t#e E$ Treat2. T#e onl2 rele,ant 1efinition i" fo!n1 in t#e
"econ1ar2 le5i"lation -Comm!nit2 Directi,e" etc..9 w#ere a "pecial "tat!" i" fore"een in
partic!lar for p!+lic work" conce""ion"9 to5et#er wit# a 5eneral reference re5ar1in5 "er,ice
conce""ion".
T#e concept of conce""ion i" in principle 1efine1 +2 t#e Comm!nit2 le5i"lator on t#e
+a"i" of t#e concept of p!+lic contract". In t#i" conte8t:
A ;public w!"# c$c%##i$& i" 1efine1 a" a contract of t#e "ame t2pe a" a p!+lic
work" contract9 e8cept for t#e fact t#at t#e con"i1eration for t#e work" to +e carrie1 o!t
con"i"t" eit#er "olel2 in t#e ri5#t to e8ploit t#e work or in t#i" ri5#t to5et#er wit#
pa2ment -Directi,e 2<<3=1>=EC9 Article 19 an1 &aw 12-I.2<<69 C#apter )II..
Similarl2:
A '#%!(ic% c$c%##i$& i" 1efine1 a" a contract of t#e "ame t2pe a" a p!+lic "er,ice
contract9 e8cept for t#e fact t#at t#e con"i1eration for t#e pro,i"ion of "er,ice" con"i"t"
eit#er "olel2 in t#e ri5#t to e8ploit t#e "er,ice or in t#i" ri5#t to5et#er wit# pa2ment
-Directi,e 2<<3=1>=?C9 Article 19 par. 3..
T#i"9 #owe,er9 1oe" not mean t#at conce""ion" are e8empte1 from t#e r!le" of t#e Treat2.
A" pointe1 o!t in t#e ;Commi""ion Interpretati,e Comm!nication on Conce""ion" !n1er
Comm!nit2 &aw@ -2<<<=C121=29 p. 0.9 work" or "er,ice conce""ion" )!% #ub*%c+ + +,% !ul%#
)$- p!i$cipl%# . +,% T!%)+/.
(e5ar1in5 p!+lic work" conce""ion"9 Comm!nit2 Directi,e 2<<3=1> an1 &aw 12-I.2<<6 of
t#e (ep!+lic of C2pr!" contain "pecific pro,i"ion" -Title III9 C#apter I9 an1 C#apter )II9
re"pecti,el2..
(e5ar1in5 "er,ice conce""ion"9 t#e Comm!nit2 an1 t#e national law pro,i1e t#at t#e
pro,i"ion !n1er t#e"e r!le" - $+ )ppl/ + #%!(ic% c$c%##i$# -Directi,e 2<<3=1>?EC9
Article 1*9 an1 &aw 12-I.=2<<69 Article 16..
Accor1in5 to t#i" 1efinition9 t#e main 1i"tincti,e feat!re of a work" conce""ion i" t#at a ri5#t
to e8ploit a con"tr!ction i" 5rante1 a" a con"i1eration for #a,in5 erecte1 it. T#i" ri5#t ma2
al"o +e accompanie1 +2 pa2ment.
In 5eneral9 if t#e contract i" principall2 concerne1 wit# t#e con"tr!ction of a work on
+e#alf of t#e Contractin5 A!t#orit29 t#en t#e Comm!nit2 le5i"lator #ol1" t#at it "#o!l1 +e
con"i1ere1 to +e a work" conce""ion.
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In contra"t9 a conce""ion contract in w#ic# t#e con"tr!ction work i" inci1ental or w#ic#
onl2 in,ol,e" operatin5 an e8i"tin5 work9 i" re5ar1e1 a" a "er,ice conce""ion.
In a work" conce""ion9 t#e ri"k" in#erent in e8ploitation are tran"ferre1 to t#e
Conce""ionaire.
If reco,er2 of e8pen1it!re were 5!arantee1 +2 t#e Contractin5 A!t#orit2 wit#o!t t#e
ri"k in,ol,e1 in t#e mana5ement of t#e work9 t#ere wo!l1 +e no element of ri"k an1
t#e contract "#o!l1 +e re5ar1e1 a" a work" contract rat#er t#an a conce""ion contract.
Aoreo,er9 if t#e Conce""ionaire recei,e"9 w#et#er 1irectl2 or in1irectl29 1!rin5 t#e co!r"e of
t#e contract or e,en w#en t#e contract come" to an en19 pa2ment -+2 wa2 of reim+!r"ement9
co,erin5 lo""e" etc.. ot#er t#an connecte1 wit# e8ploitation9 t#e contract co!l1 no lon5er +e
re5ar1e1 a" a conce""ion. In t#i" "it!ation9 t#e compati+ilit2 of an2 "!+"eB!ent financin5
"#o!l1 +e con"i1ere1 in t#e li5#t of an2 rele,ant Comm!nit2 law.
T#e 1efinition of a conce""ion allow" t#e Contractin5 A!t#orit2 to make a pa2ment in ret!rn
for work carrie1 o!t9 pro,i1e1 t#at t#at t#i" 1oe" not eliminate a "i5nificant element of t#e ri"k
in#erent in e8ploitation.
%2 "pecif2in5 t#at t#ere ma2 +e pa2ment in a11ition to t#e ri5#t to e8ploit t#e work9 t#e
Comm!nit2 le5i"lator "tate" t#at operation of t#e "tr!ct!re m!"t +e t#e "o!rce of t#e
Conce""ionaireC" re,en!e.
T#e 1eterminin5 factor in conce""ion" contin!e" to +e t#e e8i"tence of t#e e8ploitation
ri"k in connection wit# t#e in,e"tment ma1e or t#e capital in,e"te19 partic!larl2 w#en
t#e awar1in5 a!t#orit2 #a" pai1 a "!m of mone2. T#i" applie" a" a 5eneral principle9 e,en
t#o!5# in mo"t conce""ion" t#e ori5in of t#e re"o!rce" come" from pa2ment" ma1e 1irectl2
+2 t#e !"er" of t#e work -"!c# a" for e8ample in t#e ca"e of motorwa2 toll"..
In conce""ion"9 t#e ri"k" ari"in5 from t#e operation of t#e conce""ion are tran"ferre1 to t#e
Conce""ionaire wit# t#e ri5#t of e8ploitation.
T#e 1i,i"ion of "pecific ri"k" +etween t#e Contractin5 A!t#orit2 an1 t#e Conce""ionaire take"
on a ca"e +2 ca"e +a"i"9 accor1in5 to t#eir re"pecti,e a+ilit2 to mana5e t#e ri"k in B!e"tion.
If t#e Contractin5 A!t#oritie" !n1ertake to +ear t#e ri"k ari"in5 from mana5in5 t#e work +29
for e8ample9 5!aranteein5 t#at t#e financin5 will +e reim+!r"e19 t#ere i" no element of ri"k
an1 t#e Comm!nit2 le5i"lator con"i1er" "!c# ca"e" to +e p!+lic work" contract" an1 not
conce""ion".
In 5eneral9 t#e correct approac# to interpretin5 t#e a+o,e pro,i"ion" reB!ire"9 in or1er
for a contract to +e 1e"i5nate1 a" a conce""ion contract9 t#e a""e""ment of it" 1!ration an1
of t#e collection of a con"i1eration from t#e operation of t#e workD t#i"9 #owe,er9 "#o!l1 +e
com+ine1 wit# t#e tran"fer to t#e contractor of t#e in,e"tment ri"k an1 operatin5 ri"k w#ic#9
were t#e2 to remain wit#in t#e "p#ere of control competence of t#e Contractin5 A!t#orit29
mi5#t +e in1icati,e of a ;cla""ic@ p!+lic work" contract.
1.2 P#'!i&+%#'i!ie, i !-e #$$%i&#!i" "f &"&e,,i",
A" alrea12 mentione19 in"ofar a" conce""ion" re"!lt from act" of t#e Contractin5 A!t#orit2
t#e p!rpo"e of w#ic# i" to pro,i1e economic acti,itie" or t#e "!ppl2 of 5oo1"9 +,%/ )!%
#ub*%c+ + +,% !%l%()$+ p!(i#i$# . +,% T!%)+/ )$- + +,% p!i$cipl%# w,ic, -%!i(% .!0
+,% Cu!+ c)#% l)w in t#e re"pecti,e area".
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T#e"e r!le" an1 principle" are alrea12 known an1 #a,e +een mentione1 in "e,eral C#apter"
of t#i" E!i1e: t#e2 are t#e principle of eB!alit2 of treatment9 t#e principle of tran"parenc29 t#e
principle of proportionalit29 an1 t#e principle of m!t!al reco5nition.
In awar1in5 conce""ion"9 t#e Contractin5 A!t#oritie" m!"t a1#ere to t#e a+o,e principle" of
t#e Treat2. Aore in partic!lar:
T,% p!i$cipl% . %1u)li+/ . +!%)+0%$+
T#e application of +,% p!i$cipl% . %1u)li+/ . +!%)+0%$+ to conce""ion" -w#ic# i" o+,io!"l2
onl2 po""i+le w#en t#e Contractin5 A!t#orit2 ne5otiate" wit# more t#an one economic
operator" a" potential conce""ionaire". mean" t#at t#e Contractin5 A!t#orit2 i" free to
c#oo"e t#e mo"t appropriate awar1 proce1!re9 e"peciall2 in relation to t#e c#aracteri"tic" of
t#e partic!lar pro7ect9 an1 to la2 1own t#e reB!irement" w#ic# can1i1ate" m!"t meet
t#ro!5#o!t t#e ,ario!" p#a"e" of t#e rele,ant ten1erin5 proce1!re.
Howe,er9 t#i" implie" t#at t#e c#oice of can1i1ate-". m!"t +e ma1e on t#e +a"i" of o+7ecti,e
criteria an1 t#e proce1!re m!"t +e con1!cte1 in accor1ance wit# t#e proce1!ral r!le" an1
+a"ic reB!irement" ori5inall2 "et +2 t#e Contractin5 A!t#orit2.
W#ere t#e"e r!le" #a,e not 2et +een "et9 t#e application of t#e principle of eB!alit2 of
treatment reB!ire" in an2 e,ent t#at t#e can1i1ate" +e c#o"en o+7ecti,el2.
T#e Co!rt of F!"tice of t#e E!ropean Comm!nitie" -ECF. #a1 t#e occa"ion to "et o!t
t#e "cope of t#e principle of eB!alit2 of treatment in t#e area of p!+lic contract"9 +2
a""ertin5 on t#e one #an1 t#at t#i" principle reB!ire" t#at all ten1er" conform to t#e term" of
t#e contract9 "o a" to 5!arantee an o+7ecti,e compari"on +etween ten1er" -F!15ement of 22
F!ne 1GG09 Ca"e C'230=>G9 Store+aelt9 point 0*.9 an19 on t#e ot#er #an19 t#at w#en an
Contractin5 A!t#orit2 take" acco!nt of c#an5e" to t#e initial ten1er" of onl2 one ten1erer9
w#o t#ere+2 o+tain" an a1,anta5e o,er #i" competitor"9 t#en t#e principle of eB!alit2 of
treatment of t#e ten1erer" i" ,iolate1 an1 t#e tran"parenc2 of t#e proce1!re i" impaire1.
Aoreo,er9 t#e Co!rt note" t#at ;t#e proce1!re for comparin5 ten1er" #a" to compl2 at e,er2
"ta5e wit# +ot# t#e principle of t#e eB!al treatment of ten1erer" an1 t#e principle of
tran"parenc29 "o a" to affor1 eB!alit2 of opport!nit2 to all ten1erer" w#en form!latin5 t#eir
ten1er"@ -F!15ment of 24 April 1GG69 Ca"e C'>*=G39 Walloon %!"e". See al"o F!15ment of
t#e Co!rt of /ir"t In"tance of 1* Decem+er 1GG>9 T'2<0=G69 Em+a""2 &imo!"ine" &
Ser,ice"..
In certain ca"e"9 t#e Contractin5 A!t#orit2 ma2 +e !na+le to "pecif2 it" reB!irement"
in "!fficientl2 preci"e tec#nical term"9 an1 will look for alternati,e ten1er" likel2 to
pro,i1e ,ario!" "ol!tion" to a pro+lem e8pre""e1 in 5eneral term". In "!c# ca"e"9 #owe,er9
in or1er to en"!re fair an1 effecti,e competition9 t#e 1oc!ment" i""!e1 +2 t#e Contractin5
A!t#orit2 m!"t alwa2" "tate in a non'1i"criminator2 an1 o+7ecti,e manner w#at i" a"ke1 of
t#e can1i1ate" an1 a+o,e all t#e wa2 in w#ic# t#e2 m!"t 1raw !p t#eir ten1er".
In t#i" wa29 eac# can1i1ate know" in a1,ance t#at #e #a" t#e po""i+ilit2 of propo"in5 ,ario!"
tec#nical "ol!tion".
Aore 5enerall29 t#e 1oc!ment" i""!e1 +2 t#e Contractin5 A!t#orit2 m!"t not contain
element" t#at infrin5e t#e a+o,ementione1 r!le" an1 principle" of t#e Treat2.
T#e reB!irement" of t#e Contractin5 A!t#orit2 ma2 al"o +e 1etermine1 in
colla+oration wit# economic operator"9 pro,i1e1 t#at t#i" 1oe" not re"trict competition.
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T,% p!i$cipl% . +!)$#p)!%$c/
T,% p!i$cipl% . +!)$#p)!%$c/ can +e en"!re1 +2 an2 appropriate mean"9 incl!1in5
a1,erti"in59 takin5 into acco!nt t#e partic!laritie" of eac# pro7ect.
/or e8ample9 tran"parenc2 can +e en"!re19 amon5 ot#er mean"9 +2 wa2 of
p!+li"#in5 a ;Conce""ion Notice@ or a ;pre'information notice@ in t#e 1ail2 re"" or in
"peciali"t 7o!rnal"9 or +2 po"tin5 appropriate notice"
T#i" t2pe of a1,erti"in5 5enerall2 contain" t#e information nece""ar2 to ena+le
potential conce""ionaire" to 1eci1e w#et#er t#e2 are intere"te1 in participatin5
-"election an1 awar1 criteria9 etc... T#i" information al"o incl!1e" t#e "!+7ect of t#e
conce""ion an1 t#e nat!re an1 "cope of t#e "er,ice" e8pecte1 from t#e Conce""ionaire.
T,% p!i$cipl% . p!p!+i$)li+/
Accor1in5 to +,% p!i$cipl% . p!p!+i$)li+/9 an2 mea"!re c#o"en "#o!l1 +e +ot#
nece""ar2 an1 appropriate in t#e li5#t of t#e o+7ecti,e" "o!5#t.
W#en applie1 to conce""ion"9 t#i" principle allow" Contractin5 A!t#oritie" to 1efine t#e
o+7ecti,e to +e reac#e19 e"peciall2 in term" of performance an1 tec#nical
"pecification". T#i" implie" t#at an2 mea"!re c#o"en m!"t +e +ot# nece""ar2 an1
appropriate in relation to t#e o+7ecti,e "et.
T#!"9 for e8ample9 w#en "electin5 can1i1ate"9 a Contractin5 A!t#orit2 ma2 not
impo"e tec#nical9 profe""ional or financial con1ition" w#ic# are e8ce""i,e an1
1i"proportionate to t#e "!+7ect of t#e conce""ion.
T#e principle of proportionalit2 al"o reB!ire" t#at competition an1 financial "ta+ilit2 +e
reconcile1. T#erefore9 t#e 1!ration of t#e conce""ion m!"t +e "et "o t#at it 1oe" not limit nor
re"trict open competition +e2on1 w#at i" reB!ire1 to en"!re t#at t#e in,e"tment i" pai1 off
an1 t#ere i" a rea"ona+le ret!rn on in,e"te1 capital9 w#il"t maintainin5 a ri"k in#erent in
e8ploitation +2 t#e conce""ionaire.
T,% p!i$cipl% . 0u+u)l !%c2$i+i$
T,% p!i$cipl% . 0u+u)l !%c2$i+i$ #a" +een lai1 1own +2 t#e Co!rt Ca"e law an1
5ra1!all2 1efine1 in 5reater 1etail in a lar5e n!m+er of 7!15ment" on t#e free circ!lation of
5oo1"9 per"on" an1 "er,ice".
Accor1in5 to t#i" principle9 a Aem+er State m!"t accept t#e pro1!ct" an1 "er,ice"
"!pplie1 +2 economic operator" in ot#er E!ropean $nion co!ntrie"9 if t#e pro1!ct"
an1 "er,ice" meet in like manner t#e le5itimate o+7ecti,e" of t#e recipient Aem+er State.
T#e application of t#i" principle to conce""ion" implie" t#at t#e Aem+er State in w#ic# t#e
"er,ice i" pro,i1e1 m!"t accept t#e tec#nical "pecification"9 c#eck"9 1iploma"9 certificate"
an1 B!alification" reB!ire1 in anot#er Aem+er State9 if t#e2 are reco5ni"e1 a" eB!i,alent to
t#o"e reB!ire1 +2 t#e Aem+er State in w#ic# t#e "er,ice i" pro,i1e1.
Accor1in5 to t#e Comm!nit2 Directi,e an1 t#e national tran"po"ition law on p!+lic work"
conce""ion"9 t#e followin5 al"o appl2 wit#in t#e framework of t#e principle" of t#e Treat2:
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In term" of a1,erti"in59 Contractin5 A!t#oritie" wi"#in5 to awar1 a p!+lic work"
conce""ion contract "#all make known t#eir intention +2 mean" of a rele,ant notice.
S!c# notice" "#all +e p!+li"#e1 in t#e OFE$ an1 in t#e national re"".
Notice" concernin5 p!+lic work" conce""ion" contain t#e information li"te1 in Anne8
)IIC of Directi,e 2<<3=1>=EC9 an1 an2 ot#er information w#ic# t#e Contractin5
A!t#orit2 ma2 con"i1er nece""ar29 an1 are "!+mitte1 !"in5 t#e "tan1ar1i"e1 form" of
t#e E!ropean Commi""ion.
In term" of time limit"9 w#en Contractin5 A!t#oritie" re"ort to a p!+lic work"
conce""ion9 t#e time limit for t#e pre"entation of application" for t#e conce""ion !"!all2
c)$$+ b% l%## +,)$ 52 -)/# from t#e 1ate of 1i"patc# of t#e notice.
C#apter )II of &aw 12-I.=2<<6 pre"ent" in 1etail t#e r!le" applica+le to p!+lic work"
conce""ion". T#e"e r!le" concern9 inter alia9 time limit"9 "!+contractin59 awar1in5 of
a11itional work" to t#e conce""ionaire9 contract" awar1e1 +2 t#e conce""ionaire to t#ir1
partie" etc.
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2. PUBLIC-PRIVATE PARTNERSHIPS
2.1 W-#! i, # P+.%i&-P'i/#!e P#'!e',-i$ 0PPP1?
A !+lic'ri,ate artner"#ip -. i" a p!+lic contract concl!1e1 for a lon5 perio1 of
time -!"!all2 14 to 0< 2ear". +etween a p!+lic "ector entit2 an1 a pri,ate "ector entit2
for t#e con"tr!ction of infra"tr!ct!re work" an1 t#e pro,i"ion of "er,ice" of a p!+lic nat!re.
T#i" t2pe of contract i" increa"in5l2 applie1 in t#e E!ropean market9 an1 al"o in t#e market
of t#e new E$ Aem+er State".
" refer to ,ario!" form" of cooperation of pri,ate in,e"tor" wit# t#e p!+lic a!t#oritie"9
w#ic# al"o incl!1e &ocal A!t#oritie"9 for en"!rin5 all or part of t#e financin59 con"tr!ction9
reno,ation9 mana5ement an1 maintenance of an infra"tr!ct!re9 or t#e pro,i"ion of a "er,ice9
in "ector" w#ere f!ll 1ere5!lation of t#e market i" eit#er !nfea"i+le or !n1e"ira+le.
On t#e +a"i" of t#e contract entere1 into9 t#e pri,ate partner !n1ertake" to finance9
1e"i5n an1 con"tr!ct t#e pro7ect an1 operate it for t#e perio1 of time a5ree1 in t#e
rele,ant contract. W#en t#e contract e8pire"9 t#e operation of t#e pro7ect i" !n1ertaken +2
t#e !+lic A!t#orit2 on w#o"e +e#alf t#e contract wa" entere1 into. T#e Contractin5 A!t#orit2
of t#e p!+lic partner 1etermine" t#e framework an1 t#e reB!irement" of t#e ten1erin5
proce1!re -ten1er 1oc!ment".9 an1 t#e pri,ate partner a""!me" t#e con"tr!ction ri"k an1
operation ri"k for t#e pro7ect an19 i" rem!nerate1 1!rin5 t#e pro7ectH" operation p#a"e +2 wa2
of a con"i1eration -monetar2 or ot#erwi"e. w#ic# it recei,e" eit#er from t#e Contractin5
A!t#orit2 or t#e p!+lic a!t#orit2 on w#o"e +e#alf t#e pro7ect i" p!t o!t to ten1er9 or 1irectl2
from t#e !"er"9 or Iin "ome ca"e"I +2 +ot# -t#e p!+lic "ector & t#e !"er".. If t#e
con"i1eration i" pai1 1irectl2 from t#e !"er"9 t#en t#e pri,ate partner !n1ertake" t#e
e8ploitation ri"k.
T#e participation of t#e pri,ate "ector in t#e implementation of work" an1 "er,ice" i" eit#er in
t#e form of an a""ociate1 partner for t#eir implementation9 or in t#e form of "er,ice pro,i1er
to t#e p!+lic "ector.
T#e ke2 1i"tinction t#at can +e ma1e in term" of t#e contract!al content" of " i"
t#eir 1i"tinction in compen"ator2 contract"9 w#ere t#e !"e of t#e infra"tr!ct!re="er,ice
i" +orne 1irectl2 +2 it" !"er"9 an1 in non'compen"ator2 contract"9 w#ere !"a5e co"t" are
a""!me1 +2 t#e p!+lic "ector t#ro!5# re5!lar pa2ment"9 on t#e +a"i" of concrete
"pecification" re5ar1in5 "er,ice B!alit2 an1 a,aila+ilit2.
T#ro!5# "9 t#e p!+lic a!t#oritie" aim to impro,e t#e B!alit2 of t#e "er,ice" pro,i1e1 to
t#e citiJen"9 ac#ie,e "a,in5" in t#e re"o!rce" of t#e p!+lic "ector an1 of t#e local a!t#oritie"
w#ic# ma2 +e c#annelle1 to t#e implementation of a11itional pro7ect" an1 pro5ramme"9 an1
!tili"e t#e a1,anta5e"9 e8perience9 know'#ow an1 operation met#o1" of t#e pri,ate "ector.
T#e international e8perience #a" "#own t#at " make po""i+le t#e pro,i"ion of #i5#'
B!alit2 "er,ice" an1 5oo1" t#at meet t#e reB!irement" of citiJen" in a co"t'efficient an1
effecti,e manner. In1icati,el29 from t#e effort" an1 contract" entere1 into to t#i" 1ate9 it #a"
+een fo!n1 t#at t#e "!cce""f!l implementation of " #a" lea1 to re1!ction" of 14'2<K in
t#e o,erall financial co"t of t#e pro,i"ion of t#e p!+lic "er,ice fore"een9 compare1 to t#e
tra1itional proc!rement met#o1".
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On t#e ot#er #an19 t#e !"e of " "#o!l1 not +e pre"ente1 a" t#e onl2 one or t#e
+e"t "ol!tion for a p!+lic entit2 facin5 +!15et con"traint". To procee1 to t#e
application "ta5e9 t#e financial an1 or5ani"ational c#oice" ma1e in "ettin5 !p t#e partner"#ip
to carr2 o!t t#e pro7ect m!"t offer real ,al!e a11e1 ,al!e compare1 wit# ot#er option" -"!c#
a" t#e concl!"ion of a more tra1itional met#o1..
T#e "!cce"" of a in practice 1epen1" to a 5reat e8tent on t#e completene"" of
t#e contract!al framework to +e a5ree19 an1 on t#e preci"ion an1 clarit2 of t#e term"
to 5o,ern it" implementation. Clear "eparation of role"9 preci"e a""e""ment an19 in
partic!lar9 optim!m 1i"tri+!tion of ri"k +etween t#e two partie"9 to5et#er wit# t#e clear
1efinition of t#e re"pon"i+ilitie" !n1ertaken +2 eac# one of t#em9 are of 1eci"i,e importance.
T#e "cope of t#e cooperation an1 t#e ri"k" a""ociate1 wit# it m!"t +e 1i"tri+!te1 +etween
t#e partie" accor1in5 to t#e re"pecti,e a+ilit2 of eac# part2 to a""e"" an1 control t#em more
efficientl2 an1 t#!" ac#ie,e t#e +e"t po""i+le !tili"ation of it" "kill"9 capacitie" an1
e8perience.
2.2 F"'(, "f P+.%i&-P'i/#!e P#'!e',-i$, 0PPP,1
D!rin5 t#e la"t 2< 2ear"9 ,ario!" contract!al form" - contract". #a,e +een
1e,elope1 an1 trie1 internationall2.
All t#e"e form" #a,e a minim!m common core:
T#e relati,el2 lon5 1!ration of t#e contract!al relation"#ip.
T#e total or partial f!n1in5 of t#e pro7ect +2 t#e pri,ate partner9 often t#ro!5# comple8
arran5ement".
T#e important role of t#e pri,ate partner"9 w#o en"!re t#e pro7ectH" financial
parameter"9 a" oppo"e1 to t#e role of t#e p!+lic partner9 w#o en"!re" t#e p!+lic
intere"t -o+7ecti,e"9 B!alit29 pricin5 polic2 etc...
T#e 1i"tri+!tion of ri"k" +etween t#e p!+lic "ector an1 t#e pri,ate partner"9 in "!c# a
wa2 t#at t#e latter a""!me mana5ement of in#erent ri"k factor" w#ic#9 in t#e ca"e of
p!+lic work"9 are to1a2 a""!me1 +2 t#e p!+lic "ector.
T#e Ereen aper i""!e1 +2 t#e E!ropean Commi""ion in 2<<3 (COM(2!" #2$ final%
&r'ssels% #(!(2!"9 1i"tin5!i"#e" +etween two form" of ":
" of a ;p!rel2 contract!al nat!re@9 in w#ic# t#e partner"#ip +etween t#e p!+lic an1
t#e pri,ate "ector i" +a"e1 "olel2 on contract!al link"9 wit# a f!rt#er 1i"tinction +etween
;conce""ion contract"@9 c#aracteri"e1 +2 t#e 1irect relation"#ip +etween t#e pri,ate
partner an1 t#e en1 !"er9 !n1er t#e control of t#e p!+lic "ector9 wit# pa2ment in t#e
form of fee" impo"e1 on t#e !"er"9 an1 ;!+lic /inance Initiati,e@ -;/I@. contract"9 in
w#ic# t#e pri,ate partner i" reB!ire1 to implement an1 mana5e a p!+lic a1mini"tration
infra"tr!ct!re -"c#ool9 #o"pital etc..9 wit# pa2ment in t#e form of re5!lar pa2ment"
ma1e +2 t#e p!+lic "ector -a,aila+ilit2 fee.9 an1
" of an ;in"tit!tional nat!re@9 in,ol,in5 cooperation +etween t#e p!+lic an1 t#e
pri,ate "ector wit#in a 1i"tinct entit2 -Special !rpo"e )e#icle or S)..
T#ere are man2 t2pe" of contract"9 w#ic# are a1apte1 to eac# partic!lar pro7ect.
T#eir main a1,anta5e"9 pro,i1e1 t#at t#ere are applie1 properl29 are:
T#e nee1 to "ec!re f!n1" of t#e State +!15et9
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T#e B!alit2 impro,ement" in infra"tr!ct!re con"tr!ction an1 "er,ice pro,i"ion9
T#e mo+ili"ation of pri,ate "ector know'#ow on pro7ect 1e"i5n an1 implementation9 an1
T#e "i5nificant c!rtailment of lifec2cle co"t" for a pro7ect or "er,ice.
T#e mo"t wi1el2 !"e1 form" of contract" are li"te1 in t#e Ta+le +elow:
T)bl% 3: 4#+ wi-%l/ u#%- PPP .!0#
B.O.T. -%!il1'Operate'Tran"fer. & %OOT -%!il1'Own'Operate'Tran"fer.
5.B.F.O. -De"i5n ' %!il1 ' /inance ' Operate.
B.6.7. -%!il1 ' Tran"fer ' Operate.
B.O.O. -%!il1 ' Own ' Operate.
B.B.O -%!2 ' %!il1 ' Operate.
L.R.O -&ea"e ' (e#a+ilitate ' Operate.
B.7.L.T -%!il1 ' Own ' &ea"e ' Tran"fer.
O.4. -ri,ate Ser,ice" Contract : Operation an1 Aaintenance.
O.4.4. -ri,ate Ser,ice" Contract : Operation9 Aaintenance an1 Aana5ement.
I$ p)!+icul)!9 t#e"e form" in,ol,e t#e followin5:
8.7.6. -%!il1 I Operate I Tran"fer. an1 8.7.7.6. -%!il1 I Own'Operate I Tran"fer.
T#e pri,ate contractor con"tr!ct"9 maintain" an1 operate" t#e pro7ect9 on t#e +a"i" of t#e
"pecification" a5ree1 wit# t#e p!+lic "ector. T#e pro7ect i" eit#er owne1 +2 State entitie"
-%.O.T.. or a""i5ne1 for a pre1etermine1 perio1 of time to t#e pri,ate partner -%.O.O.T..9 w#o
!pon e8pir2 of t#e e8ploitation perio1 -conce""ion.9 tran"fer" to t#e p!+lic "ector t#e pro7ectH"
operation -%OT. or owner"#ip -%OOT.. In mo"t ca"e"9 t#e pri,ate partner i" re"pon"i+le for
part or for t#e entiret2 of t#e financin5 for t#e pro7ect.
T#i" form9 con"i1ere1 a" t#e mo"t wi1el2 !"e1 of all form"9 wa" for e8ample a1opte1 +2
Ereece for t#e con"tr!ction of lar5e'"cale infra"tr!ct!re pro7ect"9 "!c# a" t#e
;E&E/THE(IOS )ENILE&OS@ airport9 t#e Spata'Elef"ina /reewa29 t#e We"t Immito" (in5
(oa19 an1 t#e (ion'Antirion %ri15e.
5.B.F.O. -De"i5n'%!il1'/inance'Operate.
T#e pri,ate partner i" re"pon"i+le for t#e 1e"i5n9 con"tr!ction9 operation an1 financin5 of t#e
a""et9 an1 reco,er" t#e capital in,e"te1 t#ro!5# t#e pa2ment" ma1e +2 t#e p!+lic "ector for
t#e "er,ice" pro,i1e1 1!rin5 t#e contract. $pon e8pir2 of t#e contract9 owner"#ip of t#e a""et
i" tran"ferre1 to t#e p!+lic "ector. T#e D%/O mo1el i" t#e +a"ic mo1el for contract" in,ol,in5
t#e 1e,elopment of p!+lic "ector infra"tr!ct!re" an1 a""et"9 w#en t#e po""i+ilitie" of parallel
commercial e8ploitation are in principle !nknown an1 ma2 potentiall2 +e limite1.
8.6.7. -%!il1'Tran"fer'Operate.
In t#i" form9 t#e pri,ate partner 1e"i5n"9 finance" an1 con"tr!ct" t#e pro7ect. After
completion9 owner"#ip of t#e pro7ect i" tran"ferre1 to t#e p!+lic "ector9 w#o t#en a5ree" to
lea"e t#e pro7ect to t#e aforementione1 pri,ate partner for a pre1etermine1 perio1 of time.
D!rin5 t#i" time9 t#e pri,ate partner mana5e" t#e pro7ect an1 collect" t#e re,en!e" from it"
operation.
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8.7.7. -%!il1'Own'Operate.
In t#i" form9 t#e p!+lic "ector approac#e" t#e pri,ate "ector wit# a ,iew to implementin5 a
p!+lic !tilit2 pro7ect. T#e p!+lic "ector 5rant" a lon5'term operatin5 licen"e to t#e pri,ate
partner9 w#o a""!me" t#e re"pon"i+ilit2 for financin59 1e"i5nin59 erectin5 an1 operatin5 t#e
pro7ect. In t#i" partic!lar form of 9 t#e pri,ate partner own" t#e pro7ect9 w#ile t#e p!+lic
"ector e"ta+li"#e" preci"el2 t#e operatin5 "pecification" re5ar1in5 t#e "er,ice" pro,i1e19 t#e
"afet2 re5!lation" an1 t#e ma8im!m le,el of t#e fee"9 if an29 for !"in5 t#e pro7ect -e.5. toll"..
8.8.7. -%!2'%!il1'Operate.
Wit#in t#e framework of attractin5 pri,ate ,ent!re f!n1"9 t#e p!+lic "ector "ell" e8i"tin5 p!+lic
!tilit2 in"tallation" to pri,ate "ector entitie"9 wit# t#e aim of "ec!rin5 t#e reali"ation of
a11itional in,e"tment" for t#em -reno,ation'e8pan"ion.9 in or1er to take a1,anta5e of t#e
con"tr!ction an1 a1mini"tration "kill" of t#e pri,ate "ector9 miti5ate t#e ri"k" re"!ltin5 from
ownin5 an1 operatin5 t#e pro7ect9 an1 capitali"in5 on t#e "i5nificant economic ,al!e of
e8i"tin5 infra"tr!ct!re work". T#e pri,ate partner operate" t#e"e in"tallation" a" a profita+le
!tilit2 pro7ect !n1er State "!per,i"ion.
L.R.O. -&ea"e'(e#a+ilitate'Operate.
In t#i" form9 t#e pri,ate partner lea"e" e8i"tin5 facilitie" from t#e p!+lic "ector9 in,e"t" it" own
f!n1" for mo1erni"in5 or e8pan1in5 t#em9 an1 t#en !n1ertake" t#eir operation an1
e8ploitation for a pre1etermine1 perio1 of time9 !n1er a contract entere1 into wit# t#e p!+lic
"ector9 w#o own" t#e pro7ect.
B.O.L.T. -%!il1'Own'&ea"e'Tran"fer.
In t#i" form9 t#e pri,ate partner finance" an1 con"tr!ct" t#e pro7ect9 an1 t#en lea"e" it to t#e
p!+lic "ector t#ro!5# a lea"in5 a5reement. T#e p!+lic "ector make" re5!lar pa2ment" to t#e
pri,ate partner9 t#ro!5# w#ic# owner"#ip of t#e pro7ect i" 5ra1!all2 tran"ferre1 to it. At t#e
en1 of t#i" perio19 t#e p!+lic "ector #a" f!ll owner"#ip of t#e facilitie"9 or can p!rc#a"e t#em
for a price 1etermine1 in t#e lea"in5 a5reement. D!rin5 t#e term of t#e lea"e9 operation of
t#e facilitie" i" !n1ertaken eit#er +2 t#e p!+lic "ector or +2 t#e pri,ate partner.
7.9. -ri,ate Ser,ice" Contract: Operation an1 Aaintenance.
%2 awar1in5 an OA pri,ate "er,ice" contract9 t#e p!+lic "ector a""i5n" to t#e pri,ate partner
t#e operation an1 maintenance of a pro7ect +!t retain" owner"#ip an1 mana5ement of it.
7.9.9. -ri,ate Ser,ice" Contract: Operation9 Aaintenance an1 Aana5ement.
T#i" form concern" t#e awar1 of an ;inte5rate1@ pri,ate "er,ice" contract9 w#ere+2 t#e p!+lic
"ector a""i5n" to t#e pri,ate partner t#e operation9 maintenance an1 mana5ement of a
pro7ect +!t retain" owner"#ip of it.
T#e 1i"tinction +etween t#e a+o,e form" of " i" 1efine1 wit#in t#e two e8treme
+o!n1arie" of conce""ion an1 owner"#ip9 an1 i" a f!nction of t#e 1i"tri+!tion of ri"k"
+etween t#e partie" in,ol,e1 an1 of t#e financin5 arran5ement" +etween t#e contractin5
partie" -p!+lic "ector I f!n1in5 a5encie" = +ank" I contractor"="#are#ol1er"..
T#i" 1i"tri+!tion i" "#own in1icati,el2 in t#e /i5!re +elow:
Fi2u!% 3: T/p%# . c$+!)c+ )# ) .u$c+i$ . +,% -i#+!ibu+i$ . !i#"# b%+w%%$ +,% p)!+i%#
i$(l(%- )$- . +,% .i$)$ci$2 )!!)$2%0%$+#
T#e or5ani"ational c#art t#at follow" "#ow" a t2pical or5ani"ation of a contract99
w#ere t#e core compri"e" t#e contract an1 t#e pri,ate part2 -Special !rpo"e )e#icle.
enterin5 into contract wit# t#e p!+lic "ector. a2ment for t#e pro7ect or for t#e "er,ice
pro,i1e1 +2 t#e S) take" place o,er t#e term of t#e contract9 eit#er t#ro!5# t#e e8ploitation
of t#e facilit2 or t#ro!5# re5!lar pa2ment" +2 t#e p!+lic "ector9 in line wit# t#e attainment of
pre1etermine1 B!alit2 an1 a,aila+ilit2 tar5et". T#e pri,ate partner !"!all2 !n1ertake"9
t#ro!5# a ten1er proce1!re9 to 1e"i5n9 finance9 con"tr!ct9 operate an1 maintain t#e pro7ect
for a perio1 of 14 to 0< 2ear".
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Fi2u!% 2: T/pic)l !2)$i#)+i$ . ) PPP c$+!)c+
T#e /i5!re +elow pre"ent" t#e partie" in,ol,e1 in " an1 t#eir interrelation"#ip".
Central to a "tr!ct!re i" t#e Special !rpo"e )e#icle -S).9 w#ic# i" e"ta+li"#e1
e8cl!"i,el2 for t#e p!rpo"e" of t#e pro7ect an1 enter" into contract wit# t#e ot#er pro7ect
entitie" t#ro!5# a comple8 "2"tem of contract" t#at en"!re" t#e clear 1i"tri+!tion of ri"k".
(ole" an1 re"pon"i+ilitie":
Contractor: own f!n1"9 know'#owD
Con"tr!ction Contractor: con"tr!ction9 maintenance9 a1#erence to con"tr!ction "c#e1!leD
Aarket: t#e market to +enefit from t#e 1e,elopment of an efficient an1 "ociall2 accepta+le
"ol!tionD
Aana5er: a""!me" t#e ri"k of ret!rn on t#e in,e"tment ma1e9 an1 part of t#e lon5'term
mana5ement of t#e a""etD
!+lic Sector: le5al framework9 main part of t#e contract"9 contri+!tion in mone2D
%ank": financin5 "tr!ct!re9 know'#ow9 pro,i"ion of f!n1in5 t#ro!5# a financiall2 ,ia+le
arran5ement.
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Fi2u!% :: P)!+icip)$+# i$ PPP )!!)$2%0%$+# )$- +,%i! i$+%!!%l)+i$#,ip#
It "#o!l1 +e note1 t#at w#ere t#e !+lic Sector wi"#e" to retain a "#are#ol1in5 intere"t in t#e
Special !rpo"e )e#icle9 it" participation i" limite1 to 3GK.
Howe,er9 t#e mo"t common practice i" for t#e p!+lic "ector not to participate in t#e "#are
capital of t#e S). In t#i" ca"e9 if t#e con"tr!ction i" ma1e on a plot owne1 +2 t#e p!+lic
"ector9 t#i" i" 5rante1 to t#e S) to5et#er wit# t#e e8ploitation ri5#t" for t#e plot an1 for an2
+!il1in5" erecte1 on it.
2.2 PPP, &"($#'e3 !" "!-e' !4$e, "f &"!'#&!
" can offer "i5nificant a1,anta5e" to t#e implementation of a pro7ect wit# t#e +e"t ,al!e
for mone29 allowin5 p!+lic "ector entitie" a relati,e fi"cal fle8i+ilit29 a" it pro,i1e" t#em wit# an
opport!nit2 for "ec!rin5 t#e p!+lic e8pen1it!re reB!ire1 for t#e pro7ect or for con,ertin5 "#ort'
term o+li5ation" into a "erie" of lon5'term re5!lar pa2ment" w#ile in parallel e8ploitin5 Iin
term" of fi"cal plannin5I t#e re"!ltin5 1ifference to impro,e t#eir macroeconomic fi5!re"9 +!t
in practice al"o for ot#er p!rpo"e"9 "!c# a" t#e creation of infra"tr!ct!re" w#ic#9 +eca!"e of
fi"cal re"triction"9 co!l1 not +e finance1 1irectl2.
It i" #owe,er clear t#at t#e comple8it2 of t#e re"!ltin5 contract!al relation"#ip9 an1 t#e
,er2 fact of p!+lic a""et" an1 "er,ice" +ein5 a""i5ne1 t#ro!5# " to economic
operator" w#o +2 1efa!lt operate on t#e +a"i" of9 an1 are moti,ate1 +29 +!"ine"" profit9 1o
not lea,e m!c# room for e8perimentation in t#e proce1!re followe1 for "electin5 t#i" met#o1
a" more a1,anta5eo!" in compari"on to ot#er option" a,aila+le. T#!"9 in or1er to opt for t#i"
implementation met#o19 t#e 1ifference in t#e ,al!e a11e1 "#o!l19 in term" of t#e financial
an1 "ocial en1 re"!lt9 +e !n1i"p!te1.
T#e Ta+le +elow "!mmari"e" t#e con1ition" nece""ar2 for 1eci1in5 on t#e initial
"!ita+ilit2 of a "ol!tion an1 on t#e nee1 to f!rt#er in,e"ti5ate it" a1option:
T)bl% 2: C$-i+i$# .! i$(%#+i2)+i$2 +,% )w)!- . ) PPP
E8i"tence for t#e nee1 to carr2 o!t an e8ten"i,e in,e"tment pro5ramme t#at reB!ire" t#e
mana5ement of ri"k" a""ociate1 wit# con"tr!ction an1 wit# t#e pro,i"ion of "er,ice".
%ank" = /!n1in5 A5encie"
In,e"tor
Special !rpo"e )e#icle
-S).
Aarket

E!arantee"
S#are"
Ca"# Contri+!tion in kin1
/!n1in5 E!arantee"
S#are"
Ser,ice Contract
Aana5ement Contract
Aana5er
S#are#ol1in5 o!rce Contract" in term" ot time anc co"t ...ncenti,e for t#e feli,er2 " for "er,ice" pro,i1e1 to part +enefit of ". ower tIntere"t
Contractor
Con"tr!ction Contract
!+lic Sector
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/!n1in5
T#e pri,ate "ector know'#ow an1 "peciali"ation reB!ire1 to implement t#e pro7ect e8i"t"9 an1 it i"
e"timate1 t#at it can offer 5oo1 ,al!e for mone2 for t#e pro7ect.
T#e t2pe of t#e "er,ice en,i"a5e1 i" "!c# t#at t#e p!+lic "ector entit2 ma2 "pecif2 it on t#e +a"i" of
operatin5 "pecification" for t#e 1!ration of t#e contract.
W#ole &ife Co"tin5 -W&C. can +e e"ta+li"#e1 for t#e pro7ect="er,ice.
Deman1 for t#e pro7ect="er,ice concern" a lon5 perio1 of time an1 a 5rowin5 client +a"e.
T#e tec#nolo52 incorporate1 in t#e implementation of t#e pro7ect="er,ice i" not e8pecte1 to +e
mo1ifie1 "i5nificantl2 -an1 in an2 ca"e9 not +e2on1 t#e po""i+ilit2 of a1aptation. o,er t#e ne8t 2ear".
In a""e""in5 " a" an option a5ain"t ot#er form" of contract9 t#e criteria li"te1 in
t#e followin5 Ta+le ma2 +e !"e1:
T)bl% :: C!i+%!i) .! )##%##i$2 PPP# )# )$ p+i$ )2)i$#+ +,%! .!0# . c$+!)c+
T#e ;tec#no'economic re"!lt@ of t#e pro7ect for t#e p!+lic "ector entit2. T#i" in,ol,e" i""!e" relate1 to
t#e co"t" for implementation an1 operation of t#e pro7ect an1=or t#e pro,i"ion of t#e "er,ice
t#ro!5#o!t it" lifec2cle compare1 to t#e implementation an1 pro,i"ion of t#e "er,ice +2 t#e p!+lic
"ector9 to t#e B!alit2 operation "pecification" an1 t#e rele,ant c#eckin5 proce1!re"9 to t#e reB!ire1
le,el of B!alit2 !pon e8pir2 of t#e contract etc.
T#e e8pecte1 compen"ator2 nat!re an1 f!nctionalit2 of t#e pro7ect for it" !"er" -"ocio'economic
re"!lt. in term" of t#e pro,i"ion of t#e partic!lar "er,ice9 +!t al"o in term" of it" complementarit2 to
ot#er "er,ice" of a p!+lic nat!re.
S!fficient "iJe9 "o t#at t#e pro7ect ma2 +e +anka+le for cre1it in"tit!tion"9 w#o"e contri+!tion -an1 t#e
term" 5o,ernin5 t#e rele,ant a5reement". i" a ke2 element of t#e pro7ect. In t#e ca"e of "9 an
important a"pect w#ic# !"!all2 i" !n1ere"timate1 i" t#e co"t of t#e awar1 proce1!re9 +ot# for t#e
p!+lic "ector entit2 an1 for t#e ten1erer"9 an1 it" proportion to t#e co"t of t#e pro7ect.
/inancial ,ia+ilit29 "o t#at t#e pro7ect i" attracti,e to t#e pri,ate in,e"tor" w#o will ten1er for it.
In a11ition to t#e a+o,e criteria for a""e""in5 " a" an option a5ain"t ot#er form" of
contract9 t#e followin5 Ta+le li"t" "ome critical factor" affectin5 t#eir a1option:
T)bl% ;: C!i+ic)l .)c+!# )..%c+i$2 +,% )-p+i$ . PPP#
T#e e8pecte1 ;1e,elopment re"!lt@ of t#e pro7ect. T#e pro7ect "#o!l1 form part of9 an1 contri+!te to9
t#e p!+lic "ector entit2H" 1e,elopment plannin59 in term" of it" re"!lt at t#e le,el of t#e pro,i"ion of
t#e "er,ice to w#ic# it refer"9 a" well a" in term" of it" o,erall impact on it" operation9 on "ocial
1e,elopment an1 on it" economic en,ironment.
T#e lon5'term political will to implement t#e pro7ect.
T#e "ocial acceptance of t#e pro7ect9 at lea"t 1!rin5 a fir"t perio1 in t#e implementation of t#e . In
w#at re5ar1" &ocal A!t#oritie"9 for e8ample9 t#e pro7ect m!"t complement "ocial an1 a1mini"trati,e
"tr!ct!re" an1 acB!ire1 emplo2ment ri5#t"9 rat#er t#an attempt to "!+"tit!te t#em.
T#e in"tit!tional an1 le5al framework for implementation9 w#ic# m!"t en"!re clear term" for t#e
pro7ect.
T#e tra1e9 financial or ot#er ri5#t" re5ar1in5 t#e pro,i"ion of t#e en,i"a5e1 "er,ice.
2.5 C'i!i&#% ,+&&e,, f#&!"', f"' PPP &"!'#&!,
T#e Ta+le +elow li"t" t#e critical factor" affectin5 t#e "!cce"" of contract"9
5ro!pe1 accor1in5 to w#et#er or not t#e2 are controlle1 or affecte1 +2 t#e p!+lic or
pri,ate "ector9 or +2 +ot#.
T)bl% 5: C!i+ic)l .)c+!# .! #ucc%##.ul -%(%lp0%$+ . PPP c$+!)c+#
F)c+!# c$+!ll%- ! )..%c+%- b/ +,% Public S%c+!
Determination of political prioritie" in relation to t#e pro7ect" to +e 1e,elope1
Icon1310.ico
Icon1310.ico
Icon1310.ico
Commitment of t#e p!+lic "ector to t#e"e form" of partner"#ip
Coor1ination +etween p!+lic "er,ice" an1 entitie"
Capa+ilit2 of t#e p!+lic "ector to re"pon1 to t#e reB!irement" of contract" of t#i" form -ne5otiation"9
monitorin59 c#eckin59 e,al!ation.
Attractin5 intere"t from t#e market -,ia+ilit2 an1 attracti,ene"" of pro7ect".
/inancial affor1a+ilit2 of t#e pro7ect for t#e p!+lic "ector
S!ita+le economic9 le5al an1 in"tit!tional framework
T#e en,ironment wit#in w#ic# t#e pro7ect i" 1e,elope1
T#e pro7ectH" partic!lar c#aracteri"tic"
T#e 1!ration of t#e contract
Stan1ar1i"ation for c!rtailin5 co"t" an1 1etermination of effecti,e proc!rement proce1!re"
F)c+!# c$+!ll%- ! )..%c+%- b/ +,% P!i()+% S%c+!
Capa+ilit2 of t#e market to re"pon1 to t#e reB!irement" of t#e p!+lic "ector an1 of t#e pro7ect
/inancial ,ia+ilit2 of pro7ect implementation from t#e ,iewpoint of t#e pri,ate "ector
o""i+ilit2 for t#e pri,ate "ector to ac#ie,e accepta+le profit
F)c+!# c$+!ll%- ! )..%c+%- b/ b+,
S!fficient f!n1in5 en"!rin5 completion of t#e pro7ect"
Compati+ilit2 of contract" wit# t#e applica+le le5al an1 in"tit!tional framework
Str!ct!rin5 an1 Aana5ement of contract" -1etermination of minim!m "pecification"9 pa2ment
mec#ani"m" etc..
I1entification9 effecti,e mana5ement an1 "!ita+le 1i"tri+!tion of ri"k"
Mnow'#ow an1 e8perience
2.5 A3/#!#6e, #3 3'#).#&*, "f !-e #$$%i&#!i" "f PPP,
T#e a1,anta5e" an1 1raw+ack" of t#e application of " are t#e followin5:
2.5.1 Advantages of the application of PPPs
T#e a1,anta5e" of t#e application of " for t#e public #%c+! are t#e followin5:
I0p!(%0%$+ . i$.!)#+!uc+u!%# )$- )##%+# < Fl%=ibili+/
" can +e 1e,elope1 in man2 ke2 infra"tr!ct!re I acti,it2 area"9 "!c# a" water "!ppl29
ener529 telecomm!nication"9 roa1"9 tran"port9 #o"pital"9 "c#ool"9 pri"on"9 accommo1ation of
office" an1 1epartment"9 m!"e!m" etc.9 a" well a" in t#e area concernin5 t#e 1e,elopment
of t#e p!+lic "ectorH" real e"tate propert2. In all t#e"e ca"e"9 " #elp +rin5 a+o!t
impro,ement" in inno,ation an1 in t#e B!alit2 an1 B!antit2 of "!pplie"="er,ice"=a""et".
Hi2,-1u)li+/ #%!(ic%# < I0p!(%- p!*%c+ 0)$)2%0%$+
T#e B!alit2 of t#e "er,ice" pro,i1e1 t#ro!5# contract" ma2 +e #i5#er t#an t#at o+taine1
in t#e ;cla""ic@ wa29 a" a re"!lt of inno,ation9 competition9 performance incenti,e" an1
planne1 maintenance t#ro!5#o!t t#e pro7ect lifec2cle.
I$$()+i$ < S)(i$2# i$ +i0% )$- 0$%/
T#e "peciali"ation an1 e8perience of corre"pon1in5 pro7ect" a,aila+le in t#e pri,ate "ector
offer" an opport!nit2 for 1e,elopin5 inno,ati,e "ol!tion"9 re1!cin5 pro7ect 1eli,er2 co"t an1
time9 an1 impro,in5 f!nctional 1e"i5n9 con"tr!ction9 an1 proce"" mana5ement. T#e
proce""e" to +e 1e,elope1 can "er,e a" "tan1ar1" for f!t!re pro7ect"9 to w#ic# t#e2 co!l1
al"o +e applie1.
P!(i#i$ . #%!(ic%# )+ ) lw%! ++)l c#+
T#e net pre"ent ,al!e of t#e total co"t of t#e "er,ice" pro,i1e1 t#ro!5# "9 if t#e
corre"pon1in5 arran5ement" an1 t#e contract #a,e +een "tr!ct!re1 an1 applie1 correctl29 i"
lower t#an t#e co"t +orne +2 t#e p!+lic "ector w#en t#e proc!rement of t#e corre"pon1in5
"!pplie" or "er,ice" i" ma1e in t#e ;cla""ic@ wa2. Alt#o!5# t#e financin5 of t#e pro7ect +2
pri,ate f!n1" ma2 in,ol,e a11itional co"t"9 a" t#e +orrowin5 co"t for t#e pri,ate "ector i"
!"!all2 #i5#er t#an t#at for t#e p!+lic "ector9 t#e"e co"t" ma2 +e compen"ate1 +2 t#e
"2ner5ie" 1e,elope1 +2 com+inin5 t#e 1e"i5n9 con"tr!ction an1 operation of t#e pro7ect
!n1er t#e "ame economic operator. T#e"e "2ner5ie" ma2 lea1 to re1!ction" in operatin5 an1
maintenance co"t" an1 to impro,ement" in t#e le,el of t#e "er,ice" pro,i1e1 -,al!e for
mone2.9 re"!ltin5 in a total co"t for t#e 1e,elopment an1 operation of t#e pro7ect w#ic# i"
lower t#an t#at o+taine1 t#ro!5# t#e ;cla""ic@ proc!rement approac#. /inancin5 of t#e
pro7ect +2 pri,ate f!n1" an1 t#e tran"fer of t#e re"pon"i+ilit2 for operation to t#e pri,ate
"ector9 !"!all2 re"!lt" in t#e a,oi1ance of co"t o,err!n" an1 in t#e a1#erence to t#e
con"tr!ction "c#e1!le9 two factor" w#ic# are ,er2 1iffic!lt to control !n1er t#e con,entional
met#o1 followe1 for t#e proc!rement of "!pplie" an1 "er,ice".
T#e /i5!re +elow pre"ent" t#e 1ifference"9 in term" of time an1 mone29 +etween p!+lic
work" contract" an1 contract".
Fi2u!% ;: 5i..%!%$c%# b%+w%%$ Public >!"# C$+!)c+# )$- PPP C$+!)c+# i$ +%!0# . +i0% )$-
c#+ ?Su!c%: IFS@P>CA
T!)$#.%! . !i#"#
T#e i1entification of t#e ri"k" a""ociate1 wit# t#e pro7ect an1 t#eir 1i"tri+!tion +etween t#e
p!+lic an1 t#e pri,ate "ector on t#e +a"i" of t#eir re"pecti,e a+ilit2 to mana5e an1 control
more effecti,el2 eac# ri"k9 i" per#ap" t#e mo"t important +enefit of ". T#i" 1i"tri+!tion
!"!all2 in,ol,e" t#e followin5 ri"k": 1e"i5n9 con"tr!ction9 operation9 tec#nolo5ical c#an5e9
financin59 market9 le5al etc.
T#e /i5!re +elow "#ow" t#e 1i"tri+!tion of ri"k" +etween p!+lic an1 pri,ate "ector:
Fi2u!% 5: Ri#" -i#+!ibu+i$ b%+w%%$ P!i()+% )$- Public S%c+! ?Su!c%: IFS @ P>CA
I0p!(%0%$+ . +,% p%!.!0)$c% )$- %..%c+i(%$%## . +,% $%w #%!(ic%#
%2 allocatin5 eac# ri"k to t#e entit2 +e"t a+le to #an1le it9 an1 +2 linkin5 t#e pa2ment" for
"er,ice" pro,i1e1 to performance9 contract" ma2 "er,e a" clear incenti,e for t#e
1eli,er2 of pro7ect" on time an1 wit#o!t co"t o,err!n"9 an1 for en"!rin5 a1#erence to t#e
1e"ire1 "pecification" t#ro!5#o!t t#e 1!ration of t#e contract. T#e p!+lic "ector "#all pa2 t#e
entire amo!nt of pa2ment" onl2 w#en t#e "er,ice" pro,i1e1 meet f!ll2 t#e 1e"ire1 le,el an1
t#e "pecification" -pa2ment mec#ani"m.. In contra"t9 in t#e ca"e of p!+lic contract"9 t#e
maintenance an1 operation of t#e a""et 1epen1" on t#e a,aila+ilit2 of corre"pon1in5 f!n1"
!n1er t#e State +!15et9 an1 on t#e effecti,e implementation of rele,ant pro5ramme" +2
entitie" w#o 1o not alwa2" #a,e a,aila+le t#e infra"tr!ct!re reB!ire1.
Cl%)! c00i+0%$+ + +,% cli%$+@ci+iB%$
T#e 1e,elopment of " +2 t#e p!+lic "ector i" aime1 at meetin5 it" nee1" an1
reB!irement" in connection wit# t#e "er,ice" reB!ire19 rat#er t#an mana5in5 t#e e8i"tin5
proce1!re" for t#e pro,i"ion of "er,ice". T#i" "#ift in foc!" from t#e mana5ement of
proce1!re" to t#e B!alit2 of t#e pro1!ce1 re"!lt i" a 1eterminin5 factor in t#e promotion an1
1e,elopment of inno,ati,e "ol!tion" an1 in impro,in5 t#e relation"#ip +etween t#e p!+lic
"ector an1 t#e citiJen".
5i..%!%$+i)+i$ . #%!(ic%#
T#e 1e,elopment of " en#ance" competition an19 t#ro!5# t#e intro1!ction of
+enc#mark"9 allow" compari"on" t#e B!alit2 an1 pro1!ction co"t" for t#e "er,ice" pro,i1e1
to +e compare1 to t#o"e of "imilar "er,ice" in t#e market9 a 1e,elopment t#at #elp" impro,e
pro1!cti,it2 an1 effecti,ene"".
Public Sector: Risk assumption Risk Transfer or Assumption Private Partner: Risk transfer
Required licenses/permits
Institutional framework
(taxes, spatial planning etc.)
Inflation
Demand (usage / size)
Residual Value
orce ma!ored e"ents
Design
#onstruction
$peration
inancing
%ec&nolog'
Fu$-i$2 < 5%(%lp0%$+ . 0!% p!*%c+#
T#e !"e of pri,ate capital in t#e con"tr!ction an1 1e,elopment of pro7ect" can accelerate t#e
infra"tr!ct!re 1e,elopment pro5ramme an1 #elp keep p!+lic e8pen1it!re wit#in t#e +!15ete1
co"t9 eliminatin5 o,err!n" an1 t#e nee1 for a11itional f!n1".
B!)-%! %c$0ic b%$%.i+#
%2 #elpin5 1e,elop an1 +rin5 to completion a "i5nificant n!m+er of pro7ect" 1!rin5 perio1" of
+!15etar2 re"triction"9 t#e 1e,elopment of " ma2 act a" incenti,e for t#e pri,ate "ector9
mo+ili"in5 re"o!rce" t#at ma2 #elp to increa"e emplo2ment an1 ac#ie,e economic 5rowt#.
C$w-,w
T#e application of " a""i"t" t#e tran"fer of know'#ow to t#e p!+lic "ector9 t#ro!5# it"
cooperation wit# t#e pri,ate "ector.
T#e a1,anta5e" of t#e application of " for t#e p!i()+% #%c+! are t#e followin5:
articipation in p!+lic pro7ect" an1 7oint ;owner"#ip@ of t#e a""et".
Attracti,e profit mar5in".
&on5'term contract".
2.5.2 Potential drawbacks of the application of PPPs
I0pl%0%$+)+i$ c0pl%=i+/
" are c#aracteri"e1 +2 increa"e1 comple8it2 in t#eir implementation9 1!e to t#e
nece""ar2 c#an5e" in t#e in"tit!tional framework an1 to t#e comple8 "et'!p of contract"
w#ic# "#o!l1 fore"ee all potential ri"k" an1 t#e wa2" in w#ic# to a11re"" t#em9 in or1er to
ac#ie,e t#e 1i"tri+!tion of eac# ri"k to t#e part2 +e"t "!ite1 to mana5e it.
Hi2, p)!+$%!#,ip #+!uc+u!i$2 c#+#
%eca!"e of t#eir comple8it29 t#e co"t a""ociate1 wit# t#e 1e,elopment of " 1!rin5 t#e
"ta5e of t#eir form!lation ma2 +e con"i1era+l2 #i5#er t#an t#e co"t" to re"!lt t#ro!5# t#e
con,entional proc!rement met#o1" for a""et" an1 "er,ice". Of co!r"e9 t#i" 1oe" not
nece""aril2 mean t#at t#e total co"t of t#e pro7ect "#all +e #i5#er compare1 to t#at of t#e
con,entional proc!rement met#o1.
Hi2,%! b!!wi$2 c#+
T#e +orrowin5 for t#e pri,ate partner i" !"!all2 #i5#er t#an t#at for t#e p!+lic "ector an19
5i,en t#at t#e pri,ate partner will "eek a #i5# +orrowin5 rate9 t#e financial co"t of t#e pro7ect
ma2 +e increa"e1. Of co!r"e9 t#i" 1oe" not nece""aril2 mean t#at t#e total co"t of t#e pro7ect
"#all +e #i5#er compare1 to t#at of t#e con,entional proc!rement met#o1.
I$%..%c+i(% c$+!)c+ 0)$)2%0%$+
roper monitorin5 an1 c#eckin5 of t#e contract ma2 not +e a,aila+le9 re"!ltin5 in fail!re to
ac#ie,e t#e 1e"ire1 re"!lt" -le,el of "er,ice"9 pa2ment mec#ani"m9 a""!mption of ri"k" etc...
T#i" ma2 +e 1!e eit#er to a lack of know'#ow or to t#e a+"ence of "!ita+le monitorin5
proce1!re".
Icon0242.ico
L)c" . c0p%+i+i$
In t#e ca"e of a contract9 t#e pre"ence of competition contri+!te" to t#e 1e,elopment of
inno,ati,e "ol!tion" an1 to t#e impro,ement of t#e effecti,ene"" in t#e pro,i"ion of "er,ice".
Howe,er9 t#e re"!lt inten1e1 ma2 not +e ac#ie,e1 in ca"e" of weak or limite1 competition or
w#ere t#e n!m+er of pri,ate partner" a+le to pro,i1e t#e"e "er,ice" -i.e. #a,in5 t#e
knowle15e9 capacit29 an1 re"o!rce" reB!ire1. i" "mall..
It i" important to note #ere t#at "e,eral of t#e 1raw+ack" of " can +e minimi"e1
t#ro!5# proper plannin59 "tr!ct!rin5 an1 implementation of t#e pro7ect. /or e8ample9
t#e initial financial ,ia+ilit2 "t!12 "#o!l1 1oc!ment t#at t#e total economic +enefit from "!c# a
"tr!ct!re ma2 e8cee1 t#e #i5#er co"t of "tr!ct!rin5 t#e partner"#ip an1 t#e financin5 co"t
-,al!e for mone2.. In a11ition9 clear "!pport +2 t#e State i" reB!ire1 at t#e political9 le5i"lati,e
an1 in"tit!tional le,el.
2.7 S!e$, i #)#'3i6 #3 i($%e(e!i6 # PPP &"!'#&!
T#e fi5!re +elow pre"ent" t#e "tep" of a t2pical proce1!re. T#e time reB!ire1 for
completion of "!c# a proce1!re9 from t#e p!+lication in t#e OFE$ to t#e "i5nat!re of t#e
contract9 ,arie" from 13 to 23 mont#".
Fi2u!% D: S+%p# . ) +/pic)l PPP p!c%-u!%
T#e Ta+le +elow "!mmari"e" t#e ke2 concl!"ion" re5ar1in5 t#e application of ".
T)bl% D: C$clu#i$# !%2)!-i$2 +,% )pplic)+i$ . PPP#
" are a relia+le alternati,e for implementation of n!mero!" infra"tr!ct!re" of t#e p!+lic "ector9 an1
of t#e mana5ement an1 operation "er,ice" a""ociate1 wit# t#em.
Sa,in5" in time an1 co"t ma2 +e ac#ie,e1.
ri,ate financin5 ma2 +e more e8pen"i,e t#an p!+lic f!n1in59 +!t in all ca"e" t#e intro1!ction of a
competiti,e proce1!re lea1" I!"!all2 an1 !n1er t#e ri5#t circ!m"tance"I to "ol!tion" w#ic# are more
economic o,erall -con"tr!ction9 operation an1 maintenance..
T#e le5i"lati,e an1 in"tit!tional framework m!"t +e 1etermine1 or en#ance1.
A" a r!le9 t#e B!alit2 of t#e "er,ice" pro,i1e1 t#ro!5# t#e 1e,elopment of " i" impro,e19 w#ile t#e
p!+lic "ector ma2 "pecif2 an1 c#eck t#e B!alit2 of t#e "er,ice" pro,i1e1. A" t#e pa2ment" ma1e to t#e
pri,ate partner are linke1 clearl2 to t#e B!alit2 of t#e "er,ice" pro,i1e1 an1 to t#e attainment of a
"pecific B!alit2 le,el9 t#e ac#ie,ement of t#e o+7ecti,e act" a" an incenti,e 1ri,in5 t#e efficienc2 an1
effecti,ene"" of t#e pri,ate "ector an1 t#e B!alit2 ac#ie,e1 i" +etter t#an t#at o+taine1 t#ro!5# t#e
tra1itional proc!rement approac#.
T#e p!+lic "ector maintain" control o,er p!+lic a""et"9 a" ri"k" an1 re"pon"i+ilitie" re5ar1in5 t#e 1a2'
to'1a2 mana5ement of t#e "er,ice" pro,i1e1 are tran"ferre1 to t#e pri,ate "ector "electi,el2. In an2
reparation of Ten1er
roce1!re -!+lic Sector.
Official Fo!rnal of t#e E!ropean
$nion -OFE$.
reB!alification Doc!ment" I
In,itation of (eB!e"t" to
articipate
reB!alification of Can1i1ate"
Ten1er S!+mi""ion Doc!ment"
E,al!ation I
Selection of Can1i1ate
Contractor
Contract Si5nat!re I
Contract Aana5ement
Determination of +!"ine"" nee1
A""e""ment of alternati,e" for pro7ect implementation an1 of t#e "!ita+ilit2 of t#e
pro7ect for 1e,elopin5 =/I "ol!tion"
Doc!mentation of t#e o,erall economic +enefit from t#e pro7ect -,al!e for mone2.
Initial market "o!n1in5
Sec!rin5 of t#e appro,al" reB!ire1 to procee1 wit# t#e "ol!tion
E"ta+li"#ment of ro7ect Team
!+lication in t#e OFE$
reparation of preB!alification 1oc!ment"
Di"patc# of 1oc!ment" to t#e intere"te1 economic operator"
S!+mi""ion of reB!e"t" to participate +2 t#e can1i1ate"
E,al!ation of reB!e"t" to participate
reB!alification of can1i1ate" -!"!all2 4 I 6.
reparation of ten1er "!+mi""ion 1oc!ment"
Di"patc# of 1oc!ment" to t#e preB!alifie1 can1i1ate"
S!+mi""ion of ten1er" +2 t#e preB!alifie1 can1i1ate"
E,al!ation of "!+mitte1 ten1er" on t#e +a"i" of t#e "pecifie1 tec#nical9 financial
an1 le5al criteria
Selection of can1i1ate Contractor
/inal 1i"c!""ion" an1 ne5otiation" for "i5nat!re of t#e contract
Contract Aana5ement
ca"e9 t#e p!+lic "ector maintain" control o,er t#e po""i+ilit2 of a1optin5 an1 impo"in5 policie"9
"pecification" an1 re5!lator2 inter,ention".
2.8 PPP P'"9e&!, i !-e EU #3 e:#($%e, "f ,e&!"', )-e'e PPP, #'e
#$$%ie3
T#e map" an1 ta+le" in t#i" "ection pre"ent application" an1 e8ample" of " in t#e E$.
So!rce: E!ropean In,e"tment %ank9 De8ia Cre1it
Ireland
PPP Act 2002
Education
Health
Transport
Water Supply et!or"s
Belgium
PPP Decree 2003
Transport
Water Supply et!or"s
Education
Education
Netherlands
PPP Task Force 1999
Transport
Water Supply et!or"s
Health
#risons
Finland
Transport
Education
Health
Water Supply et!or"s
France
LOPSI, LOPJI 2004
Ordonnance Mattei
Ordonnance PPP
Education
Health
Transport
In$rastructures
#risons
Portugal
PPP Law 2003
Transport
Health
#risons
Water Supply et!or"s
Education
Spain
PPP Law 2003
Transport
Health
Education
Water Supply et!or"s
Italy
Meroni Law 2001!4
Transport
Health
Water Supply et!or"s
Education
Greece
Transport
Touris%
Germany
PPP Task Force 2003
&e$ense
Water Supply et!or"s
In$rastructures
'oads
Poland
Le"a #ra$ework %nder &re&aration
Water Supply et!or"s
Transport
Czech Republic
PPP Task#orce 2004
Le"a #ra$ework %nder &re&aration
Water Supply et!or"s
Transport
(ilitary )a%ps
Health
Education
Croatia
Transport
Water Supply et!or"s
Romania
Transport
Health
Water Supply et!or"s
Hungary
PPP 'o$$ittee 2003
(ew Proc%re$ent Act 2004
Transport
#risons
Health
Education
Water Supply et!or"s
Slovaia
Water Supply et!or"s
Transport
Buil-i$2 .)cili+i%#
Co!rt Hall"
refect!ral=A!nicipal Hall"
(elocation "er,ice"
Social welfare centre"
Aana5ement of real e"tate
propert2
E$(i!$0%$+
Soli1 & liB!i1 wa"te
mana5ement
ro,i"ion of water
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