PPP Research Center

 Romanian Public-Private Partnership Law Review

No. 5 / 2013

TABLE OF CONTENTS: 

Interview with His Excellency Dan-Coman Șova, Minister Delegate for Infrastructure Projects of National Interest and Foreign Investments

Public Contracts Crossroads: Concessions or Public-Private Partnerships?
by Simona Gherghina, PhD, Lecturer, Faculty of Law, University of Bucharest

The negotiation stage of the competitive dialogue
by Monica Amalia Rațiu, PhD, Lecturer, Faculty of Law, University of Bucharest

Some remarks regarding the statute of limitations preventing the government from taking action against outstanding budgetary receivables associated to “irregularities” found in PHARE programmes - case study -
by Alexandru-Sorin Ciobanu, PhD, Lecturer, Vice-dean of the Faculty of Law, University of Bucharest

Options for stimulating public-private partnerships using EU financial support
by Ruxandra Chiriță, Senior Manager - Deals, PricewaterhouseCoopers Romania

 

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Interview with His Excellency Dan-Coman Șova,
Minister Delegate for Infrastructure Projects of National Interest and Foreign Investments
 

Your Excellency, why the new PPP law became a priority right from the outset of your political mandate?

Adopting a new PPP regulation was necessary because no project could be made based on the 2010 law which is now in place. The purpose of this new PPP law is to support the implementation of a legal framework that can successfully foster the cooperation between the public and private sectors, in order to implement projects devoted to public works or services.

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Public Contracts Crossroads: Concessions or Public-Private Partnerships?

Simona Gherghina, PhD
Lecturer
Faculty of Law
University of Bucharest

Abstract:

In the absence of a specific legal nature of the public-private partnership contract, its delimitation from the concession is required for the identification of the prevailing selection procedures. The economic criteria accepted for such delimitation – the source of the project revenues and the distribution of risks among partners – have no influence on the legal regime of the public-private partnership, which may include one or more concessions. In the same way, the use of both criteria for the accounting registration and the statistical treatment of the obligations assumed by the public partner within a public investment project financed from private funds shall not influence the legal regime of the underlying project contracts.

Keywords: concession, public-private partnership, public investments, financing.


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The negotiation stage of the competitive dialogue

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

 Abstract:

Directive no. 18 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (hereinafter the “Directive 18”) has been transposed into the Romanian legislation through the provisions of the Government Emergency Ordinance no. 34/2006 on the award of public procurement contracts, public works concession contracts and services concession contracts, and certain aspects were also included in Law no. 178/2010 on public private partnership. Since the Directive 18 does not provide details on the negotiation stage of the selection procedure of the competitive dialogue, the Member States having experience in public-private partnerships, the European Commission and the international financial institutions have developed those aspects in good practice guidelines and explanatory notes.

A review of some solutions reflected in the doctrine and adopted in practice in order to successfully conduct the negotiation stage can be a starting point for the future crystallisation of the relevant practices in Romania.

Keywords: public-private partnership, selection procedures, competitive dialogue, the negotiation stage of the competitive dialogue.

 

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Some remarks regarding the statute of limitations preventing the government from taking action against outstanding budgetary receivables associated to “irregularities” found in PHARE programmes - case study -

Alexandru-Sorin Ciobanu, PhD
Lecturer
Vice-dean of the Faculty of Law
University of Bucharest

Abstract:

The PHARE programmes that were implemented back in the 1990s generated a number of problems associated to how payments were handled, especially those related to VAT or forex differences that were associated to purchases of goods or services. Generally speaking, some of these problems were triggered by the lack of professionalism of the Romanian authorities (who refused to reimburse the VAT in some cases without explaining their decisions), while others were caused by the inflexibility of the European Commission services and of the auditors assigned by the European Commission.

The aim of this study is to present for the first time a number of solutions that Romanian administrative dispute courts have settled lately in cases involving the legality of audits performed by bodies of the Ministry of Public Finance more than 10 years after the time when the last PHARE programmes ended. Beyond the controversial merits of, for instance, the admissibility of VAT payments, it is instrumental to establish whether the Romanian government continues to have the right to enforce the outstanding budgetary receivables deriving from would-be “irregularities” associated to how European Union funds were handled in the past, in spite of the significant amount of time that has passed since, by invoking the provisions of regulations that became effective long after the closure of the programmes in questions. The cases that will be described in the coming pages are extremely important, including in terms of the multiple PPP projects that the PHARE programmes funded back in the past, especially in circumstances where their effects have rippled into the present; more specifically, a good number of litigations on PHARE-related matters are still pending. This is exactly why I will present some of the first court decisions regarding the right of the government to enforce - based on regulations enacted after the time when PHARE programmes were implemented and finalised - the outstanding budgetary receivables deriving from the ways in which these programmes were managed. Apart from the legal developments that have occurred since, these jurisprudence solutions set important judicial precedents that may be invoked in similar cases.

Keywords: EU funds, PHARE, PPP projects, VAT, Government Ordinance no. 79/2003, Government Decision no. 1306/2007, outstanding budgetary receivables, irregularities, right to audit, statute of limitations, jurisprudence.


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Options for stimulating public-private partnerships using EU financial support

by Ruxandra Chiriță
Senior Manager - Deals
PricewaterhouseCoopers Management Consultants

Abstract:

Although there is no clear cut definition for the private-public partnership and, in some jurisdictions, no clear distinction from the concession, both PPPs and concessions have to be analysed against the Government Debt and Deficit “Manual” which sets the rules by which the risk allocation may cause the asset created by the partnership to be classified on or off the public partner’s balance sheet, with obvious impact on the nation’s deficit – an indicator by which EU measures the Member States’ economic health.

To avoid the risk of having a project qualified as on balance sheet, countries less experienced with PPPs (Romania is such an example) included in their laws various dispositions to prevent or to limit public sector involvement in the financing and the funding of the public-private projects. However, raising finance for the construction phase is probably the most difficult part in the PPP life-cycle, especially after 2008, when the credit market reluctance to finance large projects with long construction periods combined with the increase of financing costs required project promoters to rely more on state guarantees, as well as state co-financing.

Countries more experienced with PPPs (such as France) set up instruments to support the raising of finance (e.g. with guarantees) in most cases using national money. National budgets can be supplemented with funds provided by the EU Commission through the Cohesion Policy financial framework which works on 7-year planning. Romania too, should take advantage of the opportunities offered by combining private capital with public funds – national or European – to cover its development needs. There are a number of actions the Government may take to make it happen.

Keywords: public-private partnership, PPP, concession, EU funds, financial instruments, hybrid PPP, blending EU funds with PPP projects, public debt and deficit, project bonds, EIB, public sector support, project risks, Cohesion Fund, European Regional Development Fund, European Social Fund, Connecting Europe Facility.

 ... continue

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