4.4.2.3.  Adjustments to long-term PPPs over time

An overwhelming majority of contributors to the consultation acknowledges the need for adjustments to long-term PPPs over time. It is considered crucial that the initial PPP contracts provide for a certain degree of flexibility. Various contributors say that public services, in particular, need to be adjusted regularly to the changing needs of consumers and public authorities. Thus, PPP contracts should have some scope for adjustment. Furthermore, such provisions in the initial contract are considered unproblematic as they are laid down under conditions of full competition.

Various stakeholders say a new public procurement procedure is needed if the overall object of the contract changes. Other stakeholders report that in practice abuses such as unwarranted adjustments of PPP contracts are rare and do not justify regulatory action. One contributor refers to experience suggesting that reopening negotiations due to substantial modifications of a contract usually results in a better deal for the original private partner, rather than an improvement in the public interest.

Some stakeholders argue that adjustments to the PPP contract or concession should be allowed, even if they are not provided for in the initial contract or concession. They argue that not all needs for future adjustment of a contract can be foreseen when it is concluded and only practical experience with performance of the contract show whether and where adjustments over time are necessary.

A number of contributors express an interest in EC rules providing clarification on the types of changes in the course of the execution of a PPP which are compatible with EU law.

Among those contributors who criticise the adjustment of PPP contracts and concessions over time, several say that readjustment clauses can have discriminatory effects. As an example they cite the case of exaggerated traffic forecasts in the initial bid making it at first sight economically advantageous. If the public authority agrees to the bidder's subsequent request to readjust the contract, this might discriminate against competitors who based their initial bids on more realistic estimates. Along the same lines, another contributor points out that many bidders tend to assume time limits for completion of the project which turn out to be unrealistic. Subsequent amendment of the contract, leading to an extension of the time limits for completion, would be unfair to those competitors who did not obtain the contract because they were more realistic in their estimates.