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Public private partnership

Under the Green Paper on public-private partnerships and Community law on public contracts and concessions of 30 th April 2004, the term public-private partnership (hereinafter referred to as "the PPP") in general refers to forms of cooperation between public authorities and the world of business which aim to ensure the funding, construction, renovation, management or maintenance of public infrastructure or the provision of a public service.

PPPs are normally characterised by the following elements:

  • The relatively long duration of the relationship, involving cooperation between the public partner and the private partner on different aspects of a planned project.
  • The method of funding the project, in full or in part from the private sector by means of adding public funds.
  • The important role of the economic operator, who participates at different stages in the project (design, completion, implementation, funding). The public partner concentrates primarily on defining the objectives to be attained in terms of public interest, quality of services provided and pricing policy, and it takes responsibility for monitoring compliance with these objectives.
  • The distribution of risks between the public partner and the private partner, to whom the risks generally borne by the public sector are transferred. The precise distribution of risks is determined case by case, according to respective ability of the parties concerned to assess, control and cope with this risk.

From the perspective of material scope of PPP public authorities of the Member States of the European Union make often use of contractual arrangements on PPPs for the implementation of infrastructure projects, in particular, in sectors as transport, public health, education and national security, as well as in the fields of innovation, research and development.

From the perspective of procedure a distinction may be made between

  • PPPs of a purely contractual nature, in which the partnership between the public and the private sector is based solely on contractual links, namely in the form of the conclusion of a contract designated as "a public contract" or as "a concession", and
  • PPPs of an institutional nature, involving cooperation between the public and private sector within a jointly established distinct entity.

Both PPPs of a purely contractual nature and PPPs of an institutional nature are addressed by a number of EU documents (see this web site), while concessions are generally provided for in the EU Procurement Directives.

In this context the Ministry for Regional Development in its capacity of the central government authority in respect of investment policy

  • participates in designing national policy in the field of PPPs,
  • is in charge of designing national policy in the field of public procurement (public contracts and concessions),
  • monitors and evaluates amendments to the legal regulations of the EC and the rulings of the EC Court of Justice in the area of public procurement,
  • draws up drafts of new legal regulations in the field of public procurement and ensures harmonisation thereof with the EC regulations,
  • arranges for national formal guidance of public procurement,
  • arranges for guidance and consultancy activities in relation to contracting entities and economic operators in awarding public contracts and granting concessions.

The issues of PPP, public contracts and concessions are, in addition, comprised in another field of competence of the Ministry for Regional Development, which consists in the coordination of activities of Ministries and other central government authorities in respect of spending by the structural funds.

More information about PPP: