4.7.  Measures and practices perceived as barriers to the introduction of PPPs

Question 20 of the PPP Green Paper

A clear majority of those contributors who comment on measures or practices perceived as barriers to the introduction of PPPs say that too many and too strict rules hamper the development of PPPs. In particular, contributors from the public side (but also various private undertakings and associations) complain that EC, national and local rules on PPPs limit the flexibility they say is needed to set up such projects. The restricted recourse to the negotiated procedure is cited as one example of rules adversely affecting PPPs. National tax legislation is also singled out by several stakeholders as being detrimental to the formation of PPPs. A considerable number of contributors say that this perceived plethora of rules applicable to PPPs results in high transaction costs. They argue that these costs may discourage public authorities from launching PPP projects and private parties from participating in competitions for the award of PPPs.

A substantial number of stakeholders consider that the lack of legal clarity and common rules for the formation and performance of PPPs across all Member States jeopardises their potential success. Many stakeholders say that uncertainty about future EC legislation on PPPs, possibly including the adoption of more rigid rules, adversely affects the setting up of such projects. A number of stakeholders who complain that the rules on PPPs are unclear conclude that a regulatory framework for PPPs needs to be established at EC level. In this context some stakeholders are particularly concerned about the lack of proper review mechanisms for disputes arising when PPPs are awarded or when public procurement rules are entirely ignored by contracting authorities. Another example of rules not defined clearly enough are those relating to in-house constellations. Divergences between national rules on PPP are also cited as barriers to the introduction of such projects.

In relation to the establishment of PPPs, several stakeholders complain of undue privileges being granted to public companies to the detriment of their private competitors. According to some contributors, such discriminatory practices include different tax provisions, allegedly unduly favouring public undertakings, unequal access to subsidies and the recourse to in-house constellations referred to above.

Other major issues which many stakeholders suspect impede the development of PPPs include EU co-financing as part of the EC Regional Policy and, to a lesser extent, state aid rules. The perceived incompatibility of Cohesion and Structural Funding with PPPs, and more particularly the presumption that EU grant aid must imply public ownership of the infrastructure resulting from a PPP, appears to be a problem which goes beyond the water sector. In general, the application of Regional Policy to PPPs is considered to require clarification. Various other contributors ask for clarification of the relationship between state aid rules and the EC Public Procurement Directives.

Many stakeholders cite lack of experience, the slow liberalisation of certain sectors and - more generally - the absence of strong political will at all levels to promote PPPs as barriers to their development.