Legal Eye: PPP takes two to tango

Finally, in October 2005, the Law on Public-Private Partnerships came into effect, providing a long-awaited framework for these types of ventures. With EU funds available and awaiting good projects, it would seem a match made in heaven. However, it takes two to tango, and the Law on Public-Private Partnerships requires governmental agencies to take the lead in this dance.

Eligible partners

The law is inclusive when it comes to invitations to the ball. Public entities include state and regional administrative organs, schools, public healthcare centers, research institutes, and other state companies. On the private side, businesses, foundations, religious groups and even foreign companies qualify.

Choice of music

Equally broad are the potential projects. These include public works, public services, economic or social development programs, and also pilot, promotional, scientific, educational or cultural programs. The key is that the program must relate to some mandated public purpose, but otherwise the law allows much room for creativity.

Ultimately, however, the government may only enter into a public-private partnership if it would be more advantageous than, for example, doing the project itself. "Advantageous" means savings in public expenditures, improving the standard of services, or reducing a burden on the surroundings.

Opening moves

While the law allows either private or public entities to make the first move, afterwards the public entity must take the lead. Private entities may propose projects to public entities. However, the proposing entity should not count on any special treatment. The law makes it clear that your ideas are welcome, but you still must submit the best offer to be selected.

Once a public entity decides that it is interested in an idea, it must prepare an analysis of the risks, financial and economic aspects of the project, a comparison of the advantages and risks of a public-private partnership versus other methods, and legal due diligence of property to be contributed to the project.

If public monies are to be used to finance a part of the project, the Finance Ministry must also approve the project.

Cutting in

Assuming the analysis looks favorable, the Finance Ministry has given its thumbs up, and the public entity continues to be interested, public-procurement procedures start. The public entity must publish information about the proposed project in the Public Procurement Bulletin and the Public Information Bulletin.

Afterwards, the public entity must comply with public-procurement procedures. Suffice it to say that they can be complex and frequently have been contested. With the current government's avowed plans to root out corruption and unholy alliances, past public procurements appear to be on the scrutiny list. Most likely, new ones will be afforded similar treatment.

The grand finale

Assuming a public entity desires a project enough to put its neck out to see it through all the required approvals and procedures, it can sit down to the table to sign a public-private-partnership agreement.

As reporting seems to be a popular legislative device these days, the law does not disappoint. The public entity must prepare and submit a report to the Economic Ministry about the signed agreement and later report on any changes to the agreement.

Whew, now you only need to implement the project. Let's hope that it moves a bit faster than the building of Poland's highway system.

Judith Gliniecki is the managing partner of Rymar and Partners