Public private partnership
PPP type of procurement of public buildings determines involvement of private and public clients and includes financing, design, construction, maintenance and operation of public buildings (e.g. schools, hospitals etc.). It is important to emphasize that the arrangement of PPP is to enable to provide public services with adequate allocation of risks.
From the statement of the European Commission: ENERGY-EFFICIENT BUILDINGS MULTI ANNUAL ROADMAP FOR THE CONTRACTUAL PPP UNDER HORIZON 2020 (EC, 2013).
“Public-private partnership is part of an overall European strategy related to better energy efficiency of the built environment and sustainable construction. There is a new dimension of PPP which includes three guiding principles – People in terms of job creation, the Earth in terms of energy, pollution and climate change and Profit (competition).”
Why PPP and what are the benefits of the implementation of PPP model?
Public Private Partnership (PPP) type of procurement requires the private companies involved to take long-term responsibility for public buildings, not only for initial construction costs, but for building operation and maintenance costs, during its defined life.
- Capital costs “off balance sheet” for Public Sector (for the purely contractual PPPs)
- Investments realized by contractual forms of PPP are not counted in the current debt of Investor if the conditions of risk allocation are met
- Higher Quality & total Values of Public Buildings
- The integration of services with planning and construction phase
- Adequate Risk Management
- Private partners are “motivated” for Optimal solutions & Whole Life Assessment of constructed Facilities
- Payment Mechanism only for “delivered services”
What are the benefits of realization of the PPP model?
- “Private sector” finance project performance
- Risks “transferred” to the private sector (concessionaire designs, builds, maintains and manages the buildings for the duration of the concession)
- Payment conditioned by “Availability and performance” of the buildings
- Optimal value for the resources (achieving the optimum whole life costs)
- Public-private partnership results in a better value for the public funds invested
Legislation and institutional framework for public private partnership projects in Croatia
In the area of public-private partnership in the Republic of Croatia, along with the Public Private Partnership Law it is necessary to take into account a much larger scope of relevant legislative regulations that directly or indirectly regulates the implementation of PPP projects.
The relevant laws are:
- Public Private Partnership Law
– Concessions Law
– The Public Procurement Law
– Law of Obligations
– Law on Ownership and Other Real Rights
– Company Law
– Law on the Execution of the State Budget
– General Tax Law
– Law on Physical Planning and Building
– Act on architectural and engineering activities and the activities of the Physical Planning and Building
From the statement of the European Commission: EC COM(2009)615.
“Public-private partnership (PPP) provides an effective way of implementation of infrastructure projects and providing public services and promoting innovation in the application of measures for economic recovery.”