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Overview
The main acts regulating concession PPPs and non-concession PPPs in Bulgaria are the Public Private Partnership Law (“PPP Law“) and the Concessions Law (“Concession Law“). Both acts are to be repealed by a new Concessions Law, which shall implement Directive 2014/23/EU on the award of concession contracts.
The Legal Framework for (non-concession) PPPs
The award of non-concession PPPs is in general governed by the PPP Law. In Bulgaria like in many other European jurisdictions, the term PPP means
“PPPs other than concessions”. However, the definitions of “PPP” and “concession” in the Law are unclear, meaning the extent to which the rules on (non-concession) PPPs and on concession PPPs are applicable to a particular project is unclear. As no PPPs have been implemented so far and the current PPP Law only exists on paper, there also is no current or best practice. The Awarding Authorities in Bulgaria have not yet adopted the necessary measures which would allow such PPPs to be implemented (e.g. a register of PPPs). Therefore, it remains open whether the rules are easy to use. Practitioners are optimistic that the new Law will be fit for its practical application in new (non-concession) PPPs in Bulgaria.
Areas where Bulgaria scores low or very low in the 2017/2018 PPP assessment are:
• rules on an exit by equity investors;
• information about and legal protection in relation to the exclusion of bidders/bids from the award procedure;
• monetary compensation for bidders whose rights have been infringed in an award procedure;
• clearer rules when a contract may be modified after the award and during project implementation;
• allowing international arbitration as a means of dispute settlement;
• the option to agree on a foreign law as the governing law for side agreements as for direct agreements;
• policy framework and political support for PPP as a means of implementing public infrastructure projects;
• institutional framework; and
• readiness of the local banking and insurance sector as well as the capital market to accept PPP.
The Concession Law offers a comprehensive and detailed legal framework for concession in Bulgaria. It provides for a fair and transparent selection process. Review procedures are quick and accessible. A large number of concessions in various sectors have been successfully implemented in the country, both at the state and local level. No major obstacles for the implementation of concessions exist in the country.
However, the options for different project models allowed under the Concession Law are not used in the most efficient way. For instance, the legal framework allows for BOTs but this option is rarely put into practice.
Areas where the assessment revealed room for improvement in Bulgaria's legal, political and organisational framework for concessions are:
• rules on an exit by equity investors;
• termination compensation;
• clearer rules on when a contract may be modified after the award and during the project implementation;
• allowing international arbitration as a means of dispute settlement;
• the option to agree on a foreign law as the governing law for side agreements like direct agreements;
• project development and project evaluation;
• institutional framework; and
• readiness of the local banking and insurance sector as well as the capital market to accept concession.
Political and Institutional Framework
The fragmented institutional framework needs to be improved in order to allow for a clear division of the tasks and powers of each public body involved in the implementation of concessions. A national strategy for the development of (non-concession) PPPs and concessions needs to be adopted for both, the short and the long term.