Summary Report

TUNISIA

Overview

Tunisia has both a specialised (non-concession) PPP Law as well as a Concession Law; both are supported by several governmental decrees as secondary legislation. The PPP legislation shows medium compliance with international standards. The concession legislation shows a rather low compliance. The effectiveness of the PPP Law and the Concession Law falls behind its compliance.

However, no red flags were found in the course of the assessment.

PPP Law

Tunisia’s PPP Law explicitly covers almost every matter that is addressed by international standards. Its provisions are in general very clear and well structured. Details are often to be regulated in decrees, most of which have already been passed and are now available.

Investors must research carefully to avoid overlooking a legal source.

The Law’s compliance is low for the following reasons:

• legal protection / appeal rights are only available with general state courts, but not with a specialised authority or review body; only the Concession Law explicitly grants the possibility for interim measures to be ordered by courts;

• no early exit of investors is permitted without the prior consent of the public partner;

• procedural safeguards (the Law refers to decrees in some regards);

• there are no provisions concerning contract modification;

• very few rules on contract termination (termination grounds and termination compensation); and

• unclear interface with public procurement law.

The effectiveness of the PPP legislation has not really been tested yet as, at the time of writing no PPP has been awarded in Tunisia. There is, however, some discussion about awarding a PPP contract to expand the city of Sfax.

Concession Legislation

Unlike Tunisia’s PPP Law, the Concession Law regulates numerous matters in a very abstract manner and thus achieves a lower compliance rating. The concession definition is very much in line with the international standards used in this assessment.

It achieves lower compliance in the following matters and for the following reasons:

• unclear interface with public procurement law;

• not enough rules about project preparation;

• lack of legal protection / remedies against award decisions;

• no early exit for investors without the prior consent of the public partner;

• hardly any procedural provisions / safeguards (the Law refers to decrees in many regards), in particular there are no provisions on the publication, the selection and award criteria, the possibility of establishing consortia, etc.

• although the Law contains detailed provisions relating to contract extension, it is less specific about contract modification;

• although termination compensation is explicitly provided for in several termination scenarios, the Law does not provide unambiguous guidance on how such compensation is to be calculated and which damages will be compensated;

• restricted scope to use assets as securities; and

• no explicit provisions on dispute resolution.

It is worth mentioning that Tunisia’s concession Law provides for no one-stop-shop solution for permits, but it makes explicitly clear that there are no exceptions from the normal regulatory provisions.

In addition, on top of allowing direct agreements with creditors, the Concession Law itself already sets forth an information obligation on the awarding authority vis-à-vis the creditors, which gives them the opportunity to propose a replacement private partner in order to save a project.

A positive aspect is that, as for non-concession PPPs, direct agreements with creditors are not only allowed but the concession Law itself already sets forth an information obligation on the Awarding Authority vis-à-vis the creditors, giving them the opportunity to propose a replacement private partner in order to keep a project going if the private partner fails to meet its debt service obligations, or its obligations under the project agreement resulting in a threat of termination. Furthermore, governmental support for concessions is explicitly allowed and the Concession Law governs in detail the different asset categories used in a concession and provides for a (multi-level) institutional framework for preparing, assessing and implementing concessions.

More than five concession contracts have been awarded in Tunisia, but the effectiveness of the concession legislation is only low or sometimes even very low. The main reason for this low effectiveness can be found in the lack of an actual strategy or policy framework for concessions.