PPP Research Center

 Romanian Public-Private Partnership Law Review

No. 4 / 2012

TABLE OF CONTENTS: 

Local Public Guarantees for Public-Private Partnership Projects
by Simona Gherghina, PhD, Lecturer, Faculty of Law, University of Bucharest

Public-Private Partnership in the European Union. Case study: Poland
by Ancuța Gianina Opre, Professor, PhD, Faculty of Legal and Administrative Sciences, Dimitrie Cantemir Christian University

Public-Private Partnership in health sector
by Ion Ghizdeanu, PhD, Professor, President of National Commission for Prognosis, Researcher, NIER, Romanian Academy

Challenges to blending EU funds in PPP projects
by Ruxandra Chirita, Senior Manager - Deals, PricewaterhouseCoopers Romania

How to make Public-Private Partnerships to a Success Factor - A Practitioner’s View -
by Guido Retter, General Manager, S.C. RETTER Projectmanagement S.R.L.

 

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Local Public Guarantees for Public-Private Partnership Projects

Simona Gherghina, PhD
Lecturer
Faculty of Law
University of Bucharest

Abstract:

Despite a fragmented and often imprecise regulation, there are arguments and legal mechanisms allowing local public authorities to support public investments of local interest performed as public-private partnership projects by issuance of local public guarantees. The clarification of the legal regime of such guarantees requires the delimitation of the concept of public investments as well as of the categories of potential beneficiaries for such guarantees. The issuance of local public guarantees may take place either directly, according to the explicit legal provisions or by contractual mechanisms creating an indirect guarantee. In both cases special consideration should be given to the limitations imposed by the potential classification of such guarantees as being state aid measures as well as by the unfortunately imprecise restrictions existing in respect of use of public funds within public-private partnership projects.

Keywords: public guarantees, public funds, public investments, public services, public debt, state aid.

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Public-Private Partnership in the European Union. Case study: Poland

Ancuța Gianina Opre, PhD
Professor
Faculty of Legal and Administrative Sciences
Dimitrie Cantemir Christian University

Abstract:

The Public-private Partnership topic is very common among the most developed EU countries. Thus, 80% of the total number of contracts under PPP legislation are concluded in UK, France, Germany and Spain. Anyway, recent years have shown a growing interest from the countries that joined the EU relatively recently in accessing private funds when local public budgets are not enough for financing projects for the benefit of local communities. As Romania has only recently adopted the PPP law, it is more than necessary for it to observe best European practices in the field of public-private partnerships, and Poland can be a model in this respect.

Keywords: Public-private partnership, PPP in Poland, PPP in Romania, PPP comparison.


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Public-private partnership in health sector

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

 Abstract:

The development of public-private partnerships in health care is extremely actual and necessary, in the light of the challenges this sector is facing, from the funding, efficient management and medical act quality’s point of view. Most of the European countries confront with fiscal constraints, due to which they must pay attention to priorities and restrictions regarding the public expenditures. The sovereign debt crisis amplifies these concerns. Moreover, many public health systems are hardly indebted, while the health expenditures will surely keep their increasing trend, in accordance with population’s ageing. The situation is even more drastic in Romania, country with less budgetary resources (due to its development level). The only really efficient solution for the health sector is, similarly to other public services, the involvement of the private sector, which can react to all the neuralgic points, as from funding to management and a higher quality of the medical act. Therefore, the public-private partnership has begun to participate more pregnant in health care, in countries like Great Britain, Italy, and France. Experiences from these countries, as well as the good practices within the domain – which make the object of the present article –should represent an additional incentive for this kind of initiatives in Romania, too.

For these reasons, and because of the concrete difficulties encountered in some investment projects, governments have been actively involved in promoting PPPs alongside the international or banking institutions. International experience, which will be presented in this article show that where PPPs were stimulated significant results have emerged on the contribution of PPP development.

Keywords: public-private partnership (PPP) in health sector, development and collaborations (PPP and PPC), service contracts, management contracts, the construction, maintenance contracts and the equipment contracts, hybrid contracts, leasing contracts, private financing initiatives, institutionalized public-private partnership, product development partnerships (PDP), outsourcing services.

 

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Challenges to blending EU funds in PPP projects

Ruxandra Chirita
Senior Manager - Deals
PricewaterhouseCoopers Romania

Abstract:

The concept of blending EU funds to PPP projects is gaining interest at EU level, given the current pressure on Member States to contain or reduce their deficits but also due to the credit market reluctance to finance large projects with long construction period – precisely the kind of projects to fit within the PPP concept. In certain circumstances, it is considered that the employment of EU funds in PPP projects are put to better use due to the private partner’s involvement resulting in project delivery on time and on budget, as well as providing the expected quality out of the infrastructure which was built, together with a carefully administered tariff level. The benefit of blending PPP with EU funds proves especially valuable in cases where the PPP project is not sustainable if all investment cost is provided from private sources and revenues from commercial sources are not sufficient to allow private investors to make a reasonable profit. It is generally the case of large infrastructure projects (roads, rail) in which the end user is not willing or able to pay the „commercial” tariff (i.e. the tariff which allows the private investor to recoup the investment at the respective sector’s profit rate). The use of EU funds in PPP projects may prove challenging due to a number of obstacles of conceptual nature (including the political environment, a lack of knowledge and previous experience) and of an institutional/procedural/administrative nature (such as timing issues, as well as EU and national-level procedures and policies).

A very important component of the fiscal analysis is constituted by the VAT treatment applicable to transactions carried out in a public-private partnership, whether or not they are taxable in terms of VAT (starting with the contribution to the share capital of the project company, continuing with the transactions carried out by the project company and finishing with distribution of assets between partners when the project ends). 

An effective planning should also take into account the fiscal implications in terms of corporate income tax within each stage of the public-private partnership project, from feasibility study until the liquidation of the project (e.g. deductibility regime of the main types of expenses, the impact related to the financing method of the project company and so on).

Keywords: public-private partnership, PPP, EU funds, hybrid PPP, blending EU funds with PPP projects.


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How to make Public-Private Partnerships to a Success Factor - A Practitioner’s View -

Guido Retter
General Manager
S.C. RETTER Projectmanagement S.R.L.

Abstract:

The following Article shall reflect the position of an industrial company in respect of PPP projects. After a short introduction into the concept and characteristics of PPP projects and an outline of the benefits of such concept, emphasizing in particular the off-balance sheet treatment, this article explains what from a practitioner’s view are the key factors which render a PPP project successful: (i) a sound and reliable legal and contractual framework, (ii) political support from the whole political spectrum as well as the establishment of a competent team on the part of the public sector and (iii) a fair and just risk allocation which transfers the risk to that party which is best able to manage it. The last chapter gives an overview of the two different payment mechanisms of road PPPs, namely the tolling regime and the availability scheme. 

The centralized coordination and monitoring of the execution of public-private partnership projects is performed by the Central Unit for the Coordination of the Public-Private Partnership.

 ... continue

 

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