The term "public-private partnership" (PPP) is not defined in the EU legislation on public contracts. In general, it refers to forms of co-operation between public authorities and the private sector which aim at ensuring the funding, construction, renovation, management and maintenance of infrastructure associated with the provision of a service.3
A legal and regulatory framework that supports PPPs is meant to facilitate investments in complex and long-term PPP arrangements, reduce transaction costs, ensure appropriate regulatory controls, and provide legal and economic mechanisms to enable the resolution of contract disputes.
The design of PPP legal frameworks varies across EU countries depending on legal tradition and existing laws. A PPP legal framework should include:4
□ Provisions that make the PPP project possible and facilitate its functioning (for example, the legal right to establish a project company; or the terms and conditions under which public assets may be transferred to non-public entities; or the power of the project company to choose sub-contractors on its own terms, etc.); and
□ Provisions that enable governments to provide financing, where relevant (for example, to provide subsidies or to make long-term commitments of public expenditure for the life of the PPP contract).
A PPP legal framework is typically identified in laws and regulations, but also in policy documents, guidance notes, and in the design of PPP contracts. The exact nature of the legal and regulatory framework applicable to a particular PPP transaction also depends, among others, on the financing mechanisms contemplated and the scope of responsibilities transferred to the PPP company. These are issues on which the public sector should always secure advice from suitably qualified advisors.
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3 Green Paper on Public-Private Partnerships and Community Law on Public Contracts and Concessions, COM(2004)327 Final, European Commission (2004), Brussels.
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2004:0327:FIN:EN:PDF
4 See chapter 10 of Transport Infrastructure Investments: Options for Efficiency, OECD (2008). ISBN 978- 92-821-01551-1