New law on public-private partnership

The Law no. 178/2010 on public-private partnership was published in the Official Gazette no. 676/05.10.2010.

This law regulates the public-private projects, defined as those projects which are performed entirely or partially with financial resources owned or obtained by an investor, on the basis of a public-private partnership standard, which results in a public asset or service.

The projects for which the law on PPP applies are those having as a public goal the design, financing, construction, rehabilitation, improvement, operation, maintenance, development and transfer of a public asset or service, as case may be.

The parties of a PPP contract may be:

  • The private investor – represented by any legal person or association of legal persons, Romanian or foreign, which is willing to provide the financing for one or more of the stages of a PPP project.
  • The public partner – is represented by any public authority, other state entity which was established for answering public needs, without commercial or industrial character or any other association formed by public partners.

The activities that may be performed by the private investor through the PPP contract are exemplified by the law as follows: design, construction, development, rehabilitation/improvement, operation, maintenance, financing.

The conclusion of a PPP contract is made through the following steps:

  • Initiation of a PPP project by publishing the intention announcement made by the public partner
  • Analyze and preliminary selection of private investors, prior to concluding project agreement
  • Negotiation is the stage when the public partner carries on consultations with private investors and negotiates the value of the investment and the duration of the PPP contract

Further the conclusion of a PPP contract, the legal proceedings for incorporating the project company with the headquarters in Romania with the view to achieve the goals of the PPP contract.

Even if the stages for the assignment of the PPP contract are defined by the law, the law stipulates that the public partner will issue and approve internal rules for creating the commissions, elaborating the criteria and carrying on the stages for the finalization of the PPP project and for the selection of private investors.

The law comes into force on November 4th, 2010.