Public Private Partnerships (PPPs) are forms of cooperation between public authorities and the private sector that aim to provide a public service or project. They result in the setting up of complex legal and financial arrangements involving private operators and public authorities carrying out infrastructure projects or services of use to the public.
These partnerships have been developed in several areas of the public sector and are widely used within the EU to ensure the provision of services, in particular in the areas of transport, public health, education, public safety, IT, waste management and water distribution.
But under Community law there is no specific legal system governing the many different forms of PPPs, and contracts for these partnerships are not in general covered by the EU rules on the single market. In certain cases, they can be subject to the detailed provisions of the European Directives on public procurement. However, other cases and in particular certain "concessions" are not covered.
The Commission therefore wants to ensure that the current legal framework does not prevent economic operators within the EU from gaining access to the different types of PPPs. To this end the Commission is seeking to launch a debate on the issue, through its "Green Paper on Public-Private Partnerships and Community Law on Public Contracts and Concessions".
The Green Paper, published on Tuesday, sets out the ways in which EC rules and principles on public contracts and concessions apply to different PPP arrangements, both at the time of selecting the private partner and during the contract. It also asks questions directed at how these rules and principles work in practice, so that the Commission can determine whether they are sufficiently clear and suit the challenges and characteristics of PPPs.
One type of PPP that offers a clear challenge concerns public sector IT projects, which the UK Government is now refusing to fund by means of the Private Finance Initiative (where a private firm is paid an annual fee for 25-30 years, rather than a large upfront payment). The Government took the decision last year following a scathing report on the high profile failures of many IT projects, which found that "IT PFI may not be able to consistently offer value for money benefits."
The Commission is seeking comments from all interested parties before 30th July.
