PPP Research Center

 Romanian Public-Private Partnership Law Review

No. 11 / 2014

TABLE OF CONTENTS: 

Considerations regarding the evaluation of publicprivate partnership investment project beneficiaries
by Ion Ghizdeanu, PhD, Professor, President of the National Commission of Prognosis, Researcher, NIER, Romanian Academy

Contracting authority in the context of European Directives on public procurement and concessions
by Monica Amalia Rațiu, PhD, Lecturer, Faculty of Law, University of Bucharest

Atypical guarantees in investment projects: comfort letters issued by public authorities
by Simona Gherghina, PhD, Associate Professor, Faculty of Law, University of Bucharest

PPP: the Scottish experience
by Euan Pirie, Attorney at Law, Harper Macleod LLP

 

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Considerations regarding the evaluation of public-private partnership investment project beneficiaries

Ion Ghizdeanu, PhD
Professor
President of the National Commission of Prognosis
Researcher, NIER, Romanian Academy

Abstract:

Initiating a public-private partnership project involves, as a first step, that the initiator, as well as the public institution involved, develop a background study. Such a study is intended to demonstrate the funding capacity of the project and especially its efficiency. International experience on credible ways of effectiveness assessment shows that this approach is difficult both from the perspective of uncertainty of a long period of time and, in particular, from the perspective of domains’ specificity and complexity of effects.

Therefore, in this article we propose some guidelines and recommendations for developing a background study, summarized mainly from the works of the banking system, as the financier. These considerations do not have the quality of methodological guidance, but reflect the opinion on the aspects that should be emphasized in a background study.

Keywords: background study, economic efficiency, costs, benefits, satellite accounts public-private partnership.

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Contracting authority in the context of European Directives on public procurement and concessions


Monica Amalia Rațiu, PhD
Lecturer
Faculty of Law
University of Bucharest

Abstract:

Directive 2014/24/EU of the European Parliament and of the Council on public procurement and repealing Directive 2004/18/EC (hereinafter referred to as the “new Classical Directive” or the “Classical Directive”) and Directive 2014/23/EU of the European Parliament and of the Council on the award of concession contracts stipulate certain nuances to the concept of contracting authority.

Point (10) in the preamble of the new Classical Directive includes an explanation of the need to add certain nuances to the regulating scope of the concept, where the European legislator presents the main reasons that led to certain changes in the definition of “contracting authority”.

Thus, the first part of the explanation refers to the need for clarification of the scope of the notion of “contracting authority” in general and in particular that of “body governed by public law” examined repeatedly in the case-law of the Court of Justice of the European Union.

Given that the decision was already taken for the scope of this Directive that ratione personae should remain unaltered, the enacted solution was to maintain the definitions on which the Court based itself and to add a certain number of clarifications given by the case-law as a key to the understanding of the definitions themselves.

Therefore, the clear intention of the European legislator was not to alter the understanding of the concepts as elaborated by the case-law, but to clarify in the new Directive the scope of the concept of body governed by public law both regarding the operation and the financing requirements.

In the end, it was clear that usually one should not consider as being a “body governed by public law”, a body which:

i. operates in normal market conditions (competition)
ii. aims to make a profit and
iii. bears the losses resulting from the exercise of its activity

since the needs in the general interest, that is has been set up to meet or been given the task of meeting, can be deemed to have an industrial or commercial character.

With respect to the origin of funding of a body governed by public law, the preamble of the Classical Directive suggests the clear regulation of the fact that being financed for “the most part” means for more than half and that such financing may include payments from users of the public service (imposed, calculated and collected in accordance with the rules of public law).


Keywords: public procurement, contracting authority, body governed by public law, Directive 2014/24/EU of the European Parliament and of the Council on public procurement and repealing Directive 2004/18/EC, Directive 2014/23/EU of the European Parliament and of the Council on the award of concession contracts, case-law of the Court of Justice.

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Atypical guarantees in investment projects: comfort letters issued by public authorities

Simona Gherghina, PhD
Associate Professor
Faculty of Law
University of Bucharest

 Abstract:

Following their extensive use in practice and their recent regulation by the new Civil code, the letters of comfort may be issued by public sector legal persons based on their power to enter into contracts. To the extent such legal instruments are drafted in a manner that makes them similar to letters of guarantee, they are to be qualified as public guarantees. Consequently, when letters of comfort assumed by public authorities provide for explicit payment undertakings, their issuance shall be submitted to the legal limitations applicable to undertaking of public debt obligations. Furthermore, all categories of comfort letters, irrespective of the obligations they stipulate, must consider the regulations regarding state aid and limited and efficient public spending.

Keywords: comfort letter, public funding, public guarantees, public spending, state aid, Civil Code.

 

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PPP: the Scottish experience

Euan Pirie
Attorney at Law
Harper Macleod LLP

 Abstract:

This article outlines the approach adopted in Scotland to PPP projects and highlights areas of Scottish practice that may be of relevance and value to the future development of PPP in Romania. The particular focus is on the use made of PPP structures by public sector bodies who are not the national government.

Scotland has an excellent, long term track record in successfully adopting PPP solutions to meet its needs for investment in infrastructure. Innovation has been applied to make these structures acceptable politically and also to reduce (significantly) the costs involved in procuring infrastructure through this medium. The use of PPP has also been widespread in terms of the nature of public sector bodies using PPP and the sectors of infrastructure categories in which such use has been applied successfully. Scotland demonstrates that even relatively small public sector bodies can successfully use PPP and that it does not have to be used only on very large and complicated projects.

Keywords: public-private partnership, project company, private finance initiative, infrastructure, hub initiative.