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Global Forum on Law, Justice and DevelopmentTWG “Law and the Economy” Dec. 13th, 2012

Instruments and Tools of Public-Private Partnerships (PPPs):

Ensuring the Foundations of an Equal and Effective Access to Infrastructure

Bertrand du Marais Conseiller d’État secunded as Public Law Professor,Université of Paris Ouest Nanterre La DéfenseCo-Chair, Master Program in Law and Economics, Chairman, FIDESbertrand.du_marais[at]u-paris10.fr

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Introduction: definitions and caveats

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I- Main features of Contractual PPP Schemes: Wide scope of services and of public agencies (central as well as local government): e.g. France

Contribution of PPP to the delivery of main local public utilities. Ref.: bureau de l’analyse des secteurs professionnels, DAEI, Min of Civil works (Dark area: PPP).

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At the EU level : ref.: Les partenariats public /privé en Europe, numéro

spécial, Les dossiers européens, 13, Janvier 2008, p. 14 et p. 21

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The advantages of contracts (as compared to divestiture or privatization per se) Securing assets ownership in favor of the public

agencies flexibility, if not resilience… Arbitration and / or Court adjudication

Decentralized yet governmental supervision and ownership

I- Main features of Contractual PPP Schemes, as compared to divestiture

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I- Main features of Contractual PPP Schemes: The advantages of a global contract

Traditional concession scheme: a multipurpose contract

PFI scheme: a contractual matrix

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Collectivité publique

Procédure de sélection, puisContrat de projet (Project agreement)

Apporteurs de capitaux externes

Entreprises d’exploitation

Entreprises de construction

Société de construction

Sociétéd’exploitation

Banques

Participation en capital

Usagers

Contributions obligatoires

Société de projet (« Special Purpose

Vehicle »)

Apport financier

Garantie

Contrat de financement

Garantie de bonne fin

Garantie de bonne fin

Respect du cahier des charges construction

Pacte d’actionnaire

s

Direct agreement : garantie et autorisation de « step in »Respect du cahier

des charges exploitation

Contrat d’exploitation

Contrat de construction

Participation en capital

Participation en capital

Contrat commercial

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I- Main features of Contractual PPP Schemes: contracts within the overall framework of public law In France, no “concession law” but

Some legislative statutes (e.g. Loi 93-122 du 29 janvier 1993 “Sapin” for bidding process; Ord. 17 jun 2004 for CP)

The century old case law of the Conseil d’Etat In many countries: a “concession law” Equal access, due to

the enforcement of public law and the “public service” doctrine: equality principle

Solidarity between consumers Social tariffs, social rights

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I- Main features of Contractual PPP Schemes (as compared to direct provision of services)

PPPs as tool for a better management of public utilities:More transparent to the extent that costs are

identifiedPut more pressure on the utility in terms of

quality and accountability

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I- Main features of Contractual PPP Schemes: Recent evolutions in the realm of contractual PPPs

- Hybridizing of contractual schemes: a range of contracts as regard the nature of risks (of construction, of readiness, commercial, operational) (Ref.: IGD.org)

- Innovation in tariff setting

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II- Conditions of success: general

Competition award: the experience of EU and French Law

Strong public commitment and supervision : several approaches:centralized or decentralized at the

operational level, … or for the regulatory tasks

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II Conditions of success: balance between financial sustainability and social inclusion

Sharing the burden of poverty between the operator and the public agency: “Social charter”, including “reduced social services” “Social tariff” with compensation for the operator Progressive tariff Subsidies from the public agency to the consumer

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Conclusion

Two specific case-studies and analyses: Senegalaise des Eaux: in a difficult sector and

a fragile country Columbia: local decentralization with national

supervision

Towards a community of practice ?