PPP Legal & Regulatory Framework

PPP Policy

In July 2008 GOK approved the PPP policy directive through which:

• PPPs are identified as a method for investing in public infrastructure and services

• It is required that each project needs to have a VfM analyses, risk sharing and public interest protection

• Implementation of PPP projects through competitive, fair and transparent procedures.

PPP Legal Framework

• October 2005 – Law on Procedure for the Award of Concessions (No. 02/L-44)

• August 2009 – Law on PPP and Concessions in Infrastructure and Procedures for their Award (No.03/L-090)

• December 2011 – Law on PPP (No. 04/L-045)

In order to facilitate the work of the Contracting Authorities the PPPC has adopted the following directives:

• On Procedures for the Review and Approval of PPP Projects• On Project Management Teams• On the Review and Approval of Municipal PPP• For Publications of PPP Notices

PPP Legal Framework

Law on PPP No. 04/L-045

PPP Law:

• Identifies the authorities who can initiate PPP

• Procedures for the award of PPPs

• Institutions responsible for managing PPPs

• The content and structure of the draft documents

Definition of PPP

PPP - any contractual or institutional cooperation between one or more Public Authorities and one or more Private Partners whereby the PP:

1. provides a public service or a public infrastructure,2. assumes financial, technical, construction and operational risks,

including demand and/or availability risks, 3. receives a benefit:

• from the budget of the CA• charges or fees collected from users • Or a combination

Scope of the law

• transport;• energy infrastructure, excluding the construction of new energy

generation capacities; • oil pipeline, gas pipeline, refinement and distribution; • water, sewage, drainage, irrigation, channels; • collection, disposal, recycling and management of waste; • telecommunication; • education; • sport and recreation; • health; • tourism and culture

This Law regulates Contractual and Institutional PPP’s

PPP Tendering procedures for Concession’s are regulated through the PPP law

Whereas the procedures for PPP in Public Contract form are regulated through the Public Procurement law

PPP Modalities

PPP Modalities

Contractual PPPs :1. Concession

• Works concession• Service concession • A combination of the above

2. Public Contract • PP provides a public infrastructure or service • PP assumes financial, technical, construction and/or operational

responsibilities and risks • PP receives regular payments from the CA

PPP Modalities

Institutional PPP

An Institutional PPP may be established by a Municipality by the acquisition of shares owned by such Municipality in an existing POE the sole purpose of which is the performance of a public service or a public infrastructure, provided that the private partner also participates in the management of such POE, or participates in the provision

Duration of PPP projects

PPP duration of a contract is determined by:

• life cycle of the public infrastructure,• rate of return, and• value for money of each individual PPP project

With the approval of the PPPC, CA can extend the duration of the agreement for an additional period which can not exeed more than ¼ of the initial duration of the original agreement

The Public Private Partnerships Committee oversees and coordinates all PPP projects in all economic and social sectors

Permanent PPPC Members: • Minister of Finance (chairman of the Committee)• Minister of Infrastructure• Minister of Trade and Industry • Minister of Economic Development• Prime Ministers representative

Temporary PPPC Members: • Representative of the Public Authority who will act as a Contracting

Authority (ex officio)

Institutional Framework

Director of the PPP Department

Financial

Sector

Legal Sector

Technical Sector

Public Relation Sector

Institutional Framework

PPP Department Organization

PPPC

• Development and management of the national PPP program and general PPP policies;

• Issuance of regulations;

• Issuance of Decisions for Public Authorities in order to ensure the proper implementation of the law;

• Review and approve/disaprove PPP project proposals on the basis of VfM and other considerations of public interest;

PPPC

• Approval or disapproval of Economic support for Projects;

• oversight and review of performance compliance and project execution;

• review and approval of proposed amendments and modifications to Agreements on the basis of value-for-money and similar considerations

PPP Committee responsibilities:

• Advise on PPP’s to Public Authorities;

• Recommendations on PPP legal framework, regulatory, institutional and PPP policies;

• Development and publication on procedures and standards, based on best international practices;

• Review and recomenadtion to PPP Committee and Public Authorities on PPP proposed projects;

Institutional Framework

Central PPP Department responsibilities:

• Advise on PPP’s to Public Authorities;

• Recommendations on PPP legal framework, regulatory, institutional and PPP policies;

• Development and publication on procedures and standards, based on best international practices;

• Review and recomenadtion to PPP Committee and Public Authorities on PPP proposed projects;

Institutional Framework

PPP Projects may be identified, proposed and initiated: • Public Authorities • PPP Committee• PPP Department

PPP Project identification

All PPP projects are subject to written formal approval by the PPPC before initiating PPP tendering procedures

PPPC may approve or refuse a PPP project after careful review of:• Feasibility study• Related draft documents (RFQ, RFP and draft contract) and• PPP Department recommendation

Pre-qualifications• Publishing of Request for Qualifications – 20 days min

Potential bidders have to meet the criteria's set in the RFQ:• Legal• Economical and financial, and • Technical and professional

Procedures on Request for Qualification

Request for Proposal may be developed in one or two phases – 40 days min.

And it shopud contain at least the following:•General Information;•Project specific information and performance indicators;•Agreement conditions (negotiable and non-negotiable);•Proposal Review criteria;•Tender security;•Proof of fulfilling the qualification criteria

Procedures on Request for Proposal

After an appeal the PPP Agreement is not valid if Procurement Review Body decides that it is not within the laws and respective procedures.Supreme Court may overrule such decision if:

• the agreement has been fulfilled completely or considerably, and

• decides that negative impact may exceed the potential benefits

Appeal process and review by PRB

PHASE 1: PRE- FEASIBILITY STUDY

PHASE 2:FEASIBILITY STUDY, DRAFT CONTRACT & DRAFT TENDER DOCUMENTS

PHASE 3: IMPLEMENTING THE PPP TENDER PROCESS

PHASE 4:PPP CONTRACT MANAGEMENT & PERFORMANCE MONITORING

Select Candidate PP Projects & Prepare Pre-Feasibility Study

Conduct PPP Feasibility StudyPrepare Draft PPP ContractPrepare Draft PPP Tender Documents

Implementing the PPP Tender Process

Manage PPP Contract & Monitor PPP Performance

Submit Qualifications & Proposals

Deliver Required PPP Project

Review of Pre-Feasibility Study

Review by PPP Department

Contract Review byPPP Department

Approval / Disapproval byPPP Committee

Contract Approval / Disapproval byPPP Committee

PRIVATE SECTOR PUBLIC AUTHORITY PPP DEPARTMENT PPP COMMITTEE

PPP Project Cycle

PHASE 1: PRE- FEASIBILITY STUDY

PHASE 2

PHASE 3

PHASE 4

Select Candidate PP Projects & Prepare Pre-Feasibility Study

Review of Pre-Feasibility Study

PRIVATE SECTOR PUBLIC AUTHORITY PPP DEPARTMENT PPP COMMITTEE

PPP Project Cycle

PHASE 1

PHASE 2:FEASIBILITY STUDY, DRAFT CONTRACT & DRAFT TENDER DOCUMENTS

PHASE 3:

PHASE 4

Conduct PPP Feasibility Study

Prepare Draft PPP Contract

Prepare Draft PPP Tender Documents

Review by PPP Department

Approval / Disapproval byPPP Committee

PRIVATE SECTOR PUBLIC AUTHORITY PPP DEPARTMENT PPP COMMITTEE

PPP Project Cycle

PHASE 1:

PHASE 2

PHASE 3: IMPLEMENTING THE PPP TENDER PROCESS

PHASE 4

Implementing the PPP Tender Process

Submit Qualifications & Proposals

Contract Review byPPP Department

Contract Approval / Disapproval byPPP Committee

PRIVATE SECTOR PUBLIC AUTHORITY PPP DEPARTMENT PPP COMMITTEE

PPP Project Cycle

PHASE 1

PHASE 2

PHASE 3

PHASE 4:PPP CONTRACT MANAGEMENT & PERFORMANCE MONITORING

Manage PPP Contract & Monitor PPP Performance

Deliver Required PPP Project

PRIVATE SECTOR PUBLIC AUTHORITY PPP DEPARTMENT PPP COMMITTEE

PPP Project Cycle

Thank you

www.pppkosovo.org