Romania’s legal framework both for non-concession and concession PPPs has been updated recently. There is a specific PPP Act of 2016. Procedural aspects of the (non-concession) PPP award are dealt with by the Public Procurement Act. The scope of application and the definitions for (non-concession) PPP is wide so that the PPP Law clearly applies to all project models and sectors.
However, there also are some areas where the Law achieves lower compliance results:
• a minor issue: because all PPPs must be awarded in a competitive process, there are no rules for non-competitive awards;
• maintaining the economic balance in case of external changes is just left to the parties of each particular project;
• no special one-stop-shop provisions on obtaining permits in (non-concession) PPPs;
• a lack of provisions on the possibility of direct agreements may leave open questions for some investors;
• the allocation of risks between the private and the public partner is not clear;
• No guidance about how to calculate termination compensation: no reference to the potential pay-out of project financiers (including, e.g. swap break costs); veiled reference to asset value (“non-depreciated value of the assets”); references to compulsory set-off and “deduction of damages”; no reference to NPV of contract value;
• although secondary legislation implementing the PPP Law is overdue (deadline was 25 March 2017), there seems to be no political will to move this forward (many open issues in the PPP Law e.g. compensation to the private investor upon termination of the (non-concession) PPP agreement were meant to be regulated through the secondary legislation; elements of the feasibility study etc.
Compliance of the Concession Legislation
As mentioned, there also is a new specific Act of 2016 regulating concessions. Unlike for (non-concession) PPPs, the Concession Law contains several provisions concerning the award of concession contracts which overrule the Public Procurement Act. The scope of application and the definitions for concessions are wide so that the Concession Law clearly applies to all project models and sectors.
However, there are also some areas where the Law achieves lower compliance results:
• Unlike for non-concession PPPs, the project preparation is not intensively covered by the Law, in particular concerning feasibility studies, viability assessment and socio-economic studies;
• rules on ex-post transparency and legal remedies /review procedures are missing a
liberal approach to the competitive dialogue;
• reporting and monitoring is left for the contractual parties to agree,
• no special one-stop-shop provisions on obtaining permits in concessions;
• lack of provisions on securities and the possibility of direct agreements may leave open questions for investors.
There have been no major (non-concession) PPP projects initiated under the new PPP Law. This has been primarily due to the lack of secondary legislation, and the lack of political will to initiate any large (e.g. infrastructure) projects through the new (non-concession) PPP framework.
As the Concessions Act only entered into force in 2016, there is also no experience with the application of this Law in practice.