2.7 Although not all countries have developed specific new PPP legislation, nearly all have felt it necessary to amend existing legislation, if only to clarify that public entities have the needed powers to contract out services under PPPs. In the UK, the Local Government Contracts Act was passed in 1997 to more clearly set out the ability of local governments to enter into PPP contracts and related arrangements. Ireland passed the State Authorities (PPP Arrangements) Act in 2002 which defined the possible range of PPPs that State Authorities could enter into, as well as the role of the Minister of Finance in providing directions to ministries aiming to enter into PPPs. However, in the state of Victoria in Australia, PPPs have been executed without the need for new legislation.2
2.8 Secondary legislation and regulations can be developed to use existing laws as a framework for PPPs. In South Africa the national government developed new regulations under existing public financial management legislation to impose central government oversight and approval of PPPs being developed and signed by the provinces. This addressed the national government's main concern, namely that the provinces were using PPPs as a means of off-balance sheet financing to get round budgetary constraints.
2.9 Cross-cutting PPP legislation has been used more extensively in countries that operate under the civil code. Where used, it often covers aspects such as specifying which sectors PPPs can operate in, how tariffs for PPPs are set and adjusted, the role of different institutions in a PPP program, procurement of PPPs, and dispute resolution procedures.
2.10 Even where legislation is not strictly needed to permit PPPs, it can be helpful in a number of ways. It can for example define and limit the processes used in identifying and procuring PPPs. Many PPP laws for example go into considerable detail prescribing the procurement procedures that must be followed, and the form and content of a PPP contract. Legislation can also create new institutions which will play a key role in the PPP process. Finally, new laws can help clarify the overall legal framework for PPPs by consolidating, or referring to, all provisions needed in connection with PPP arrangements. Generally older laws were enacted without PPPs in mind, and it may not be clear how they would apply in the new context. As a result, a number of countries have passed broad legislation relating to PPPs.
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2 However, in the UK and Australia sector-specific legislation has been used to introduce competitive markets, restructure industries and introduce new regulatory frameworks.