Estonia. h ("PPPs").and existence of specific concession law or of a comprehensive 0,21

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1 Estonia Core Area Summary of PFI Guide recommendations 1 / Best Practice Rating Assessment Existence of a policy framework for public private partnerships [5]/24 h ("PPPs").and existence of specific concession law or of a comprehensive 0,21 Very low compliance set of laws regulating concessions and allowing easy access to a clear and stable legal environment for PPPs. 1-General Policy and Concession Legal Framework 2-Definitions and Scope of the Concession Law 3-Selection of the Concessionaire 4-Project Agreement 5-Security and Support Issues 6-Settlement of Disputes and Applicable Laws Existence of a clear definition of the boundaries and scope of application of the concession legal framework (definition of "concession", sectors concerned, competent authorities, eligible concessionaires) limiting the risk of a challenge to the validity of concession contracts irrespective of the name given to the act. Mandatory application of a fair and transparent selection process. Limited exceptions allowing direct negotiations, competitive rules for unsolicited proposals and the possibility to challenge illegal awards. Flexibility with respect to the content of the provisions of the concession agreements which should allow a proper allocation of risks without unnecessary or unrealistic/not bankable/compulsory requirements/interferences from the contracting authority (obligations, tariff, termination, compensation). Availability of reliable security instruments on the assets and cash-flow of the concessionaire in favour of lenders including "step in" rights and possibility of government financial support or guarantee of the contracting authority s proper fulfilment of its obligations. Possibility to obtain proper sanction for breach under the applicable law through international arbitration and enforcement of arbitral awards. [24]/36 0,67 Medium compliance [30]/45 0,67 Medium compliance [9]/27 0,33 Low compliance [3]/18 0,17 Very low compliance [11]/15 0,73 High compliance OVERALL RATING 46% Low compliance 1 UNCITRAL Legislative Guide on Privately Financed Infrastructure Projects, 2001 (hereinafter the "PFI Guide") Local Expert: Priit Pahapill -Luiga Mody Hääl Borenius

2 2. OVERALL ASSESSMENT OF THE QUALITY OF CONCESSION LEGISLATION: A general policy framework for improving the legal environment and promoting PPP has not been identified in Estonia and the country does not have a general law on concessions. Concession-related issues are regulated by the Competition Act, dated 2001 (and the Decree adopted on its basis) and the Public Procurement Act, dated More particularly, the former regulates the granting of "special or exclusive rights" and the latter regulates the granting of a "construction work concession" (and other contracts concluded by public authorities above certain thresholds). However, the application of one general law over the other is not simple to determine. The new Public Procurement Act of 24 January 2007 came into force on 1 May 2007, thus the Public Procurement Act of 19 January 2001 is no longer in force. The aim of the new act is to bring Estonian public procurement legislation in line with EU public procurement directives 2004/17/EC and 2004/18/EC and update the law. Sector-specific legislation does not refer directly to concessions, even if the regulation of certain activities (e.g. transport) allows concession-type arrangements. The procedure to be followed is rather vague in the sector-specific laws that refer to the general law (Competition Act or Public Procurement Act). Thus, the general legal framework for PPP needs to be elaborated.

3 3. Key for assessment of Each Question Yes 3 points Yes, with reservations 2 points No, with limited compliance / redeeming 1 point features No 0 point N/A Not applicable 0 point Key for Assessment of Each Core Area and for Overall Assessment > 90% Very high Compliance 3+1 points 70%-89% High Compliance 3 points 50%-69% Medium Compliance 2 points 30%-49% Low Compliance 1 point < 30% Very Low Compliance 0 point

4 4. 1. GENERAL POLICY AND CONCESSION FRAMEWORK QUESTION ANSWER ARTICLE COMMENTARY 1. Is there a general/national policy framework (explicit or implicit) for PPPs in infrastructure or public services? Further to information provided by the Ministry of Economic Affairs and Communications, there is no such general/national policy framework. PPPs are understood in this context as different forms of cooperation between public authorities and the world of business which aim to ensure the funding, construction, renovation, management or maintenance of infrastructure or the provision of a public service. 2. If the answer to 1 is yes, is PPPs policy framework distinct from that for privatisation? N/A

5 5. 3. If the answer to 1. is yes, is such policy framework supported by: 3.1. certain policy framework documents? 3.2. certain institutions (a "task force" or other institution specialised in the promotion and development of PPPs)? N/A N/A For information, are there: reference to PPPs in the Constitution? sector-specific policy frameworks dealing with PPPs? municipal policy frameworks dealing with PPPs? If the Country's legal or institutional framework contains undesirable restrictions on PPPs in infrastructure or public services, please mention these.

6 6. QUESTION ANSWER ARTICLE COMMENTARY 4. Does the country have a concessions or a PPPs law (the "Law") or if the answer is no, do the Constitution or other general laws (ex: the Civil Code, sectorial law ) recognise the basic principles of concessions and regulate the granting of concessions in such a way that concessions are legally possible in the country? [.For the purpose of this questionnaire, the set of rules applicable to concessions in the absence of a specific concession law will also be referred to as the Law].For information, is a new concessions/ppp law or amendments to the existing Law being prepared? Competition Act ("CA"), article 14. Procedure for Grant of Special or Exclusive Rights ("PGSER") Public Procurement Act ("PPA"), Article 6 Competition Act, 5/06/2001(CA): Art.14(2): "the procedure for the organisation of public competitions for granting special or exclusive rights shall be established by the Government of the Republic". This was established by: The Decree No 303, 25/09/2001 "Procedure for organising a public competition for the grant of special or exclusive rights". Public Procurement Act, 24/01/2007: The construction work concession is considered as public procurement. Construction work concession is defined as an exclusive right to exploit a structure, which is granted either for a charge or without charge for the performance of construction works. Concessions by the state authorities have been mostly granted on the basis of sector-specific laws and PPA. 5. If the country has a Public Procurement Law, is Public Procurement Act, 24/01/2007(PPA)

7 7. it clear to what extent the Public Procurement Law applies or not to the granting of concessions For information: is the application of the Public Procurement Law specifically excluded? does it apply for certain types of concessions only? is it applicable to the selection of the concessionaire? is it applicable to all or some sub-contracts to be entered into by the concessionaire? PPA, Article 6 PPA explicitly provides that PPA applies to construction work concessions. However it does not enumerate any other types of concession to which it applies. At the same time, above certain thresholds, PPA applies to all purchases and services, and it is obligatory for state authorities to follow the procedures of PPA. Special or exclusive rights in the meaning of CA must be organised in accordance with CA and PGSER respectively. Thus, if a concession does not constitute a special or exclusive right, public authorities must follow the procedures established by PPA. See also question If the country has sector-specific laws regulating the granting of concessions in specific sectors, is it clear which law is applicable to a particular sector and/or infrastructure and/or services? CA, article CA (art. 14) applies to all infrastructures and sectors, unless a specific law provides otherwise. Further, certain sector-specific laws make reference to procedures enacted under the Competition Act (see question 6.) PPA Article 6 - Public Procurement Act applies to construction work concessions of all infrastructures and sectors. PPA also applies to the conclusion of any contracts by public authorities regarding services above thresholds provided at question 12.

8 8. In the absence of sector-specific law, it is unclear whether priority should be given to CA or PPA. In principle, any concession that can be considered as "special or exclusive right" (see question 8) should be granted on the basis of CA and PGSER. In practice, state authorities are reluctant to organise competition on the basis of PGSER and are more willing to organise a public tender on the basis of PPA. 7. If the country has a "local public services" law (i.e. law regulating basic legal framework for municipalities using PPPs for the construction of "local infrastructure" and/or the provision of "local utility" services) is it clear which law is applicable to a particular infrastructure and/or services? There are no general legal provisions regulating the use of PPP for local public services. However certain sector-specific laws provide for the use of PPP inter alia by municipalities. Local authorities have organised competitions award concessions on the basis of the PPA and PGSER.

9 9. 2. DEFINITIONS AND SCOPE OF THE CONCESSION LAW 2.1 Concession definition 2 QUESTION ANSWER ARTICLE COMMENTARY 8. Does the Law define one or several term(s) (ie: "PPP", "concession", "BOT", others) for the arrangements to be regulated by the Law which specify the limits of application of the Law? For information, please provide the given definition, if any. (Irrespective of the name given in the Law the word CA special or exclusive rights are defined as: rights granted to an undertaking by the state or a local government which enable the undertaking to have a competitive advantage over other undertakings in a goods market or to be the only undertaking in the market. 2 For further information on concession definition please refer to: PFI Guide, Consolidated Legislative Recommendations, Recommendation 3 and Commission Interpretative Communication on Concessions Under Community Law dated 12 April 2000;together with additional EU major documents/decision /recommendation on concessions including Directives 2004/18/EC and 2004/17 EC of 31 March 2004; Green Paper on Public Private Partnerships and Community Law on Public Contracts and Concessions dated 30 April 2004; Report on the public consultation on the Green Paper (SEC(2005) 629- Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on Public-Private Partnerships and Community Law on Public Procurement and Concessions (Brussels, COM(2005) 569) European Parliament resolution on public-private partnerships and Community law on public procurement and concessions (2006/2043(INI))

10 concession will be used for all types of defined agreements for purposes of this questionnaire) 10. PPA Articles 2(2), 4(1) and 6 Public procurement means purchasing of, contracting for provision of services, organising design contests, contracting for public works and granting of works and service concessions by the contracting authority and contracting for works by the concessionaire of works concession. Public contract means a contract with mutual material obligations awarded between one or several contracting authorities and one or several persons as a result of the public procurement, the object of which are, services or public works. The provisions stipulated on the type of the relevant contract are applied to the procurement contract in the legal acts. Public works concession for the purposes of this act is a contract the object of which is the same as in the public works contract mentioned in section 4(3) of this act and according to which the fee for the works mentioned in the same subsection lies either in the right of the concessionaire to exploit the work or in that right together with the monetary payment of the contracting authority. A service concession for the purposes of this act is a contract the object of which is the contracting for services mentioned in annex 2 of this act and according to which

11 Does the Law provide that it applies to all contracts entering into the definition of concession irrespective of the name given to such contract (concession, licence, usufruct right, lease, etc.)? PPA Article 2, Article 4(1), Article 6 the fee for the provision of services lies either solely in the right of the concessionaire to provide the specific service and receive fee for the provision of the service from the users of this service or in that right together with the monetary payment of the contracting authority. The law does not explicitly state that it applies to all contracts entering into the definition of concession irrespective of the name given to such contract, yet this principle could be interpreted from the subject of Articles 2, 4(1) and 6 of the PPA. 10. Does the Law make a clear distinction between concessions and public procurement contracts (i.e.: public works, supply or services) whereby the distinguishing criterion is the transfer of risks inherent to the exploitation? PPA Article 6 Public works concession is a contract the object of which is the same as in the public works contract and according to which the fee for the works lies either in the right of the concessionaire to exploit the work or in that right together with the monetary payment of the contracting authority. (The public works contract includes contracting for: 1) Execution of any public works mentioned in annex 1 of this act or both execution and the design of public works; 2) Construction of the building or

12 12. construction and the design or 3) Prior to acquisition, lease or rental of the immovable or the related right by the contracting authority or by giving it into the disposal of the contracting authority on other legal basis, performing of the public works regarding this immovable according to the requirements specified by the contracting authority based on any method and means. A service concession is a contract the object of which is the contracting for services mentioned in annex 2 of PPA and according to which the fee for the provision of services lies either solely in the right of the concessionaire to provide the specific service and receive fee for the provision of the service from the users of this service or in that right together with the monetary payment of the contracting authority. 11. Does the Law make a clear distinction between concession/ppps and licence (i.e an authorisation to operate granted automatically by a public authority when certain criteria are met)? XXX No, the law does not make a clear distinction between concession/ppps and licence. 2.2 Application of the Law

13 13. QUESTION ANSWER ARTICLE COMMENTARY 12. Does the Law provide that it prevails over any sector-specific law or other laws dealing with concession? XXX No, it does not state that it prevails over any sectorspecific law or other laws dealing with concession. Yet on the other hand, sector-specific laws state that public procurements are handled in accordance with the PPA. 2.3 Entities involved Public Authorities QUESTION ANSWER ARTICLE COMMENTARY 13. Does the Law identify (or allow identification by reference to other laws or regulations) the public authorities that are empowered to award concessions and enter into project agreements ("Contracting Authority")? If yes, for information, which of the following authorities are identified? national authorities (e.g.: the government, PGSER, article 4. PPA, Article 10 - Minister authorised by the Government of the Republic, "official" authorised by Minister and "official" authorised by local government entity. The procedure stipulated in PPA shall be followed by the following persons and institutions: 1) state or state authority; 2) local government entity, its authority or association; 3 For further information on the entities involved, please refer to: PFI Guide, Consolidated Legislative Recommendations, Recommendation 2, 6 and 42.

14 14. ministries, independent agencies)? provincial authorities? local or municipal authorities? public enterprises? 3) other legal person governed by public law or a body of legal person governed by public law; 4) a foundation at least one of which founders is a state or which founders include more than half of the persons specified in clauses 2 or 3 of this subsection or more than half of the members of which supervisory board are determined by the persons specified in clauses 1-3; 5) a non-profit association if more than half of its members are persons specified in clauses 1-3 of this subsection; 6) another legal person in private law which is compliant with the characteristics stipulated in subsection 2 of this section. The same article enumerates further persons, who are empowered to act on the basis of this Act. However, these persons are not public authorities. 14. Is there a specialised agency established to take care of concessions (which consent or recommendation is necessary for the granting of a concession, ex: Concession / PPPs Agency)? PPA Article 104 There is the Public Procurement Office which is a governmental authority in the area of government of the Ministry of Finance that: 1) advises the contracting authorities regarding the application of the Public Procurement Act; 2) exercises state supervision over carrying out public procurements and extrajudicial proceedings of misdemeanours in the extent and according to the procedure stipulated by law; 3) carries out international communication

15 15. within its competence in the questions of public procurements; 4) fulfils other tasks imposed on it with this act and with the legal acts established on the basis of it. The Public Procurement Office evaluates the performance of the system of public procurements in the course of performing its tasks and may submit proposals for its improvement. The Public Procurement Office publishes on its website up-todate information necessary for carrying out public procurements, including the international thresholds mentioned within three working days from their actual publication by the European Commission. However, the Public Procurement Office does not give any consent or recommendation for the granting of a concession. 15. Is the division of power between different public authorities involved in the concessions granting process simple and coordinated (ex: one stop shop)? Yes, the division of power between different public authorities involved in the concessions granting process is simple and coordinated Concessionaire and Project Company QUESTION ANSWER ARTICLE COMMENTARY

16 Can concession be granted to a domestic and/or foreign person or to a domestic person with foreign shareholders can the shareholders of the concessionaire be domestic and/or foreign persons (without discrimination)? PPA Article 3 (1) 3); Article 12(3) The contracting authority should treat all persons whose place of residence or location is in Estonia, in some other Member State of the European Union, in other state which is a contracting party to the EEA Agreement or in the country having joined the WTO Agreement on Government Procurement (GPA), equally and non-discriminatorily and follow that setting the restrictions and criteria for all persons comply with the proportionality, relevance and justification principles in relation to the object of the public procurement. The tenderer or candidate may be any person who offers goods, provides services or carries out public works on the market. The contracting authority may restrict in the contract notice the circle of tenderers and candidates in the procurement procedure, without permitting the persons originating from the countries other than mentioned in clause 3 of Article 3 of PPA to participate in the procurement procedure or grant the advantages for the tenders submitted by the persons coming from the countries mentioned in clause 3 of Article 3 of PPA before the tenders submitted by the persons coming from other countries. For information only, can concession be granted to public entities or to entities jointly owned by private and public entities? PPA Article 12(3) The tenderer or candidate may be any person who offers goods, provides services or carries out public works on the market.

17 Concerned sectors 4 QUESTION ANSWER ARTICLE COMMENTARY 17. Does the Law identify (or allow identification by reference to other law or regulations) the sectors and/or types of infrastructure and/or services in respect of which concessions may or may not be granted? Section 5 of PPA Section 5 of PPA specifies the sectors in which public procurements are handled in accordance with Section 2 of PPA. 18. Do the sectors eligible for concessions correspond to a large extent to those listed below, or if not, is the list of eligible sectors an open-ended one (as opposed to being exhaustive) allowing (or at least not preventing) concessions to be granted in numerous sectors? No specific reference to concessions, but to the way certain activities can be performed: For information: a) does it include the transportation sector? is the railway system included? are rail transport services included? are ports included? are airports included? are public roads included? Public Transport Act, article 10(1), (2) - Public Transport Act, 26/01/2000 A public service obligation may be imposed on a carrier only on the basis of a public service contract entered into between the carrier and the party ordering the transport operation. The carrier shall be selected on the basis of a public competition the conditions of which shall be established by the party ordering the transport 4 For further information on the concerned sectors please refer to: PFI Guide, Consolidated Legislative Recommendations, Recommendation 3 and 4.

18 18. b) does it include the electricity sector? is the generation of electricity included? is the transmission of electricity included? is the distribution of electricity included? c) does it include the water and wastewater sector? is water production included? is water treatment included? is wastewater treatment included? is water distribution included? is wastewater collection (sewerage) included? d) does it include solid waste collection, transfer or disposal? Electricity Market Act Public Water Supply and Sewerage Act, article 7(2) Waste Act, article 66(1), 67(1) operation. If the remuneration to be paid to the carrier is expected to exceed the values provided in Public Procurement Act (see question 12), public procurement must be organised in accordance with the PPA. At the same time, Art.10(2) provides that a public service obligation may also be imposed on the carrier who has special or exclusive rights. - Electricity Market Act, 11/02/2003. Activities in the electricity sector are subject to licensing. - Public Water Supply and Sewerage Act, 10/02/1999 a water undertaking shall be appointed by a decision of the local government council on the basis of subsection 14(2) of the Competition Act. - Waste Act, 28/01/2004 Organised waste transport means collection and transport of municipal waste from a designated region to a designated waste management facility or facilities by an undertaking elected at a competition organised by a local government body. Competition must be organised on the basis of the Art. 14(2) of the Competition Act.

19 e) does it include the oil, gas and mineral sector? f) does it include other public services such as education, health care and prisons? g) Does it include any other sectors or infrastructure (please specify)? 19. Postal Act Article 6(2) - Postal Act, 1/07/2006 Postal services. According to the Postal Act the Ministry of Economic Affairs calls on a public procurement if the thresholds stated in PPA are met in case of the rendering of the universal postal service.

20 SELECTION OF THE CONCESSIONAIRE General Considerations QUESTION ANSWER ARTICLE COMMENTARY 19. Does the Law require in principle the Contracting Authority to select a concessionaire through competitive procedures? CA, article 14(2) - Competition Act, 5/06/2001; Art.14(2): the procedure for the organisation of public competitions for granting special or exclusive rights shall be established by the Government of the Republic. This was established by: Decree No 303, 25/09/2001 Procedure for organising a public competition for the grant of special or exclusive rights PPA Article 15 - Public Procurement Act, 24/01/2007 The threshold of the cost of organising the public procurement procedure, granting the works concession and organising the design contest are the following: 1) As to the public procurements started in the year 2007 EUR 30,000 in case of service contracts and design contest, EUR 190,000 in case of public works contract and works concession; 2) As to the public procurements started in the year 5 For further information on the selection of the concessionaire, please refer to: PFI Guide, Consolidated Legislative Recommendations, Recommendations 14 to 39 included.

21 and later EUR 40,000 in case of service contracts and design contest, EUR 250,000 in case of public works contract and works concession; The international threshold is the sum established periodically by the European Commission based on the section 69 of the directive 2004/17 of the European Parliament and Council which harmonises the procurement procedures of purchasers operating in the sector of water, energy, transport and postal services (OJ L 134, 30 April 2004, pgs 1-113) and the section 78 of the directive 2004/18 of the European Parliament and Council on the harmonisation of the procedure of awarding the works, supply and service contracts and which will be published in the Official Journal of the European Union. The international threshold shall be also disclosed by the Public Procurement Office on its website and on the website of the registry of the responsible processor of State Public Procurement Register. 20. Is there reference in the Law to the principles of transparency, equal treatment and proportionality. For information, please specify if a reference is made to the principle of mutual recognition. PPA Article 1 and 3 The objective of PPA is to ensure the transparent, purposeful and economical use of financial resources of the contracting authority, the equal treatment of the participants and effective use of existing competition in public procurements. The contracting authority is obliged to comply with the following principles in organising public procurements: 1) The contracting authority should use financial

22 22. resources economically and expediently and achieve the objective of the public procurement with the reasonable price by ensuring the best price and quality ratio by comparing different tenders in case of existing competition; 2) The contracting authority should guarantee the transparency and verifiability of the public procurement; 3) The contracting authority should treat all persons whose place of residence or location is in Estonia, in some other Member State of the European Union, in other state which is a contracting party to the EEA Agreement or in the country having joined the WTO Agreement on Government Procurement (GPA), equally and non-discriminatorily and follow that setting the restrictions and criteria for all persons comply with the proportionality, relevance and justification principles in relation to the object of the public procurement; 4) The contracting authority should ensure effective use of the existing competition in public procurements, whereas the participation of the legal person governed by public law or the person governed by private law using the public means in the public procurement should not distort competition due to its use of public means; 5) The contracting authority should avoid the conflict of interests distorting the competition; 6) If possible, the contracting authority should

23 23. prefer environmentally safe solutions. 21. Is there a provision in the Law concerning the publication of information related to the competitive procedures in the Country media and in the international media (for large projects)? PPA Articles 16 (6),(7); 28(3), 29(1), 37, 48(4), 90(4),(5), 105, 106 There is a public procurement register which is a state database of public procurements, the responsible and authorized processor of which is the Ministry of Finance. The information included in prior information notices, periodic indicative notices, contract notices, simplified contract notices on a dynamic purchasing system, public procurement reports, qualification system notices, notices of public works concession, design contest invitations and results of the design contest are submitted to the register by the contracting authority and the results of the appeal procedure by the appeal committee and the mentioned documents will be published. The contracting authority shall be responsible for accuracy of information submitted to the register by it. The information specified above is publicly available, except for the information the publishing of which would hinder the work of law enforcement authorities, is contrary to the public interest or violates the business secret of undertakings or jeopardises the competition between them. The register shall forward the prior information notices, periodic indicative notices, contract notices, simplified contract notices on a dynamic purchasing system, qualification system notices, public works concession notices and design contest invitations for

24 24. publication to the Office for Official Publications of the European Communities in the standard forms established with the regulation of the Commission (EC) no. 1564/2005 by the European Commission which establishes the standard forms of publication of notices related to the public procurement procedure according to the directives of the European Parliament and Council (EC) 17/2004 and (EC) 18/2004 (OJ L 257, 1 October 2005, pgs 1-126), in case the estimated value of the public procurement is equal to the international threshold or exceeds it, or in other cases if the contracting authority so requests. The register shall forward the results of the design contest submitted to the register by the contracting authority for publishing to the Office for Official Publications of the European Communities in case a notice of design contest has been earlier communicated to the Office for Official Publications of the European Communities before or in case the contracting authority requires to communicate the results of the design contest. The request to award the public contract, the estimated value of which without VAT exceeds 20,000 euros in case of products or services or 130,000 euros in case of public works, if the contracting authority is the one mentioned in Article 10(1) of PPA or exceeds 40,000 euros in case of products or services or 250,000 euros in case of public works if the contracting authority is the one mentioned in Article 10(3) of PPA, but is lower of the threshold from which on the relevant contracting authority should organise the procurement procedure,

25 25. is notified of by the contracting authority on its website or, if non-existent, in the local or county newspaper. The contracting authority mentioned in Article 10(3) of PPA notifies of the award of the public contract, the cost of which without VAT exceeds 40,000 euros in case of products or services or 250,000 euros in case of public works, but is lower of the international threshold, on its website within ten days pursuant to the award of public contract. Upon request of the European Commission the contracting authority sends the relevant report on the circumstances of implementation of the basis stipulated in Article 28(2)1) of PPA to the European Commission through the Ministry of Finance. In order to start the open, restricted or negotiated procedure with prior publication of a contract notice or the competitive dialogue the contracting authority submits the contract notice to the register through the website of the register. The contracting authority shall submit the public procurement report to the register through the website of the register within ten days after the end of the procurement procedure. Provided the contracting authority establishes that the value of tender is abnormally low, as the tenderer has obtained state aid, it may reject the tender only after

26 26. the tenderer is not able to prove within the reasonable term specified by the contracting authority that the state aid given was in accordance with the legal acts. Provided the contracting authority rejects the tender on this basis and the estimated value of public contract is equal to the international threshold or exceeds it, it notifies the European Commission of it through the Ministry of Finance. In case of implementation of the referred exception referred and in the case of contracts awarded for purposes other than the pursuit of an activity referred to in Articles 83 to 89 of PPA the contracting authority shall notify in writing the European Commission, at the latter s request, through the Ministry of Finance of all such activities which are considered to be covered by the exclusion or the purpose. In case of implementation of the exceptions referred to in Article 90(1) 3-5) and (2) of PPA the contracting authority shall communicate in writing to the European Commission, at the latter s request, through the Ministry of Finance the names of relevant undertakings, the description of important terms and conditions and the value of the contracts to be awarded and a proof as may be deemed necessary by the European Commission that the relationship between the contracting authority and the connected undertakings complies with the requirements of this section.

27 Are there provisions of the Law, regulations or special manual, recommendation governing in detail the selection of the concessionaire ("Regulations") (i.e.: the pre-selection of bidders, the procedure for requesting proposals, other procedure such as competitive dialogue/two stage procedure)? Section 2 of PPA Section 2 of PPA states the basis and the selection procedure of public procurements. 23. Does the Law / Regulations provide that, if the Contracting Authority rejects an applicant at the time of preselection or disqualified a bidder, it must make public the reasons for the decision (or inform the rejected bidder thereof explaining the reasons for rejection)? PPA Article 54(1) and (2) The contracting authority submits immediately, but not later than within three workdays, the written notice on each decision made within the procurement procedure which has an impact on its rights or obligations in the procurement procedure to the tenderers or candidates, including the decision of eliminating the tenderer or candidate from the tendering procedure, decision of qualifying the tenderer or, candidate, decision of leaving the tenderer or candidate unqualified, decision of rejection of tender, decision of rejection of all tenders, decision mentioned in subsection 4 of 65 of PPA, decision of declaring the tender suitable and decision of declaring the tender successful with the names of tenderers or candidates, as to whose or whose tender the relevant decision was made, also the reasons why the public contract or framework agreement was decided not to be awarded or restart the procurement procedure. Upon the request of the tenderer or candidate the contracting authority submits in writing within three workdays from the receipt of such application the reasons of leaving them unqualified for the tenderer or

28 28. candidate. 3.2 Award of concession QUESTION ANSWER ARTICLE COMMENTARY 24. Does the Law / Regulations provide that all proposals are ranked solely on the basis of the evaluation criteria set forth in the pre-selection documents/ request for proposals? PPA Article 50(1) The contracting authority evaluates the tenders declared suitable. The contracting authority considers the criteria of evaluation of tenders stipulated only in the contract notice, contract documents or tender invitation in evaluation of the tenders. 25. Does the Law / Regulations provide that a notice of the award of the project, identifying the concessionaire and including a summary of the essential terms of the project agreement is to be published? PPA Article 54(1) and (2) See section 23. Upon the request of the tenderer or candidate the contracting authority submits in writing within three workdays from the receipt of such application: 1) reasons of leaving them unqualified for the tenderer or candidate; 2) for the tenderer the reasons of rejection of its tender, including in cases when the decision was made according to which the tender is not equal for the purposes of

29 29. subsection 2 of 33 of this act or is not compliant with the performance or functional requirements set for the purposes of subsection 3; 3) to each tenderer having submitted the tender declared suitable data describing the successful tender and its advantages compared to its tender and the name of the tenderer or tenderers having submitted the tender declared successful. The contracting authority may leave the information of the notices unsent to the tenderers or candidates, the disclosure of which would hinder the work of the law enforcement authorities, would contradict the public interest or would violate the business secret of undertakings or would damage their mutual competition. 26. Does the Law/Regulations provide that the Contracting Authority or any other public authority maintain records of key information pertaining to the selection and award proceedings? PPA Article 105(2) The information included in prior information notices, periodic indicative notices, contract notices, simplified contract notices on a dynamic purchasing system, public procurement reports, qualification system notices, notices of public works concession, design contest invitations and results of the design contest, are submitted to the register by the contracting authority and the results of the appeal procedure by the appeal committee and the mentioned documents will be published. The contracting authority shall be responsible for accuracy of information submitted to the register by it.

30 If the answer to 27 is yes, does the Law provide that such record is accessible for public or at least to interested parties? N/A 3.3 Final negotiations QUESTION ANSWER ARTICLE COMMENTARY 28. Does the Law/Regulations contain provisions regulating final negotiations (i.e. post contract award) so that transparency, equal treatment and competition are preserved? XXX No, the Law does not contain provisions regulating final negotiations (i.e. post contract award) so that transparency, equal treatment and competition are preserved. 29. Does the Law/Regulations provide that the Contracting Authority has the authority to terminate negotiations with the invited bidder when it becomes apparent that the bid will not result in an agreement and start negotiations with the second ranked candidate? PPA Article 53(1) Provided the tenderer having submitted the tender declared successful withdraws its tender due to the reasons not resulting from the contracting authority: 1) the contracting authority declares the second-best tender as to the price successful, if it awards the public contract on the basis of the tender with the lowest price; 2) provided the contracting authority awards the public contract on the basis of the most economically advantageous tender, it revaluates all the remaining tenders according to Article 50(2) of PPA and declares the tender successful which is the most advantageous of the tenders having been declared suitable according to the tender

31 31. evaluation criteria stipulated in the contract notice, contract documents or tender invitation. 3.4 Concession Award without competitive procedure QUESTION ANSWER ARTICLE COMMENTARY 30. According to the Law / Regulations, does the Contracting Authority have the authority to award a concession without competitive procedures only in limited exceptional circumstances such as the ones listed below? For information, which of the following conditions allowing direct negotiations are provided for? when there is an urgent need for ensuring continuity of the provision of service and engaging in a competitive selection procedure would be impractical? for projects of short duration and with an anticipated initial investment value not exceeding a specified minimal amount (or with an anticipated turnover not exceeding a specified minimal amount)? reasons of national defence or national security? No Yes (construction work concession) No Yes PPA, article 15 PGSER, If thresholds provided at section 12 above are not met, PPA does not apply.

32 32. cases when there is only one source capable of providing the required service (e.g.: in the case of patented technology or unique know-how)? when an invitation to the pre-selection proceedings or a request for proposals has been issued but no applications or proposals were submitted or all proposals failed to meet the evaluation criteria? Yes article 9. PGSER, article 6. PPA, article 28(2), (4)- (7) Tendering from one undertaking is used as a tendering procedure if there is only one possible tenderor on the goods market If the open tender does not give an anticipated result, negotiated restricted tender or tender from one undertaking may be used to grant the same right. PPA Article 28(2), (4)-(7) lists the cases when negotiated tender procedure may be used. others (please specify)? Yes PPA, article 27 PPA Article 27 lists the cases of negotiated tender procedure with prior publication of a contract notice. 31. According to the Law / Regulations, is there a procedure (rules) to be respected for the award of a concession without competitive procedures? PPA Article 68 In case of negotiated procedure without publication of a contract notice the contracting authority submits the contract documents to one or several interested persons whose economic and financial standing and technical and professional ability are presumably sufficient for proper performance of the public contract. The contracting authority will not add the data mentioned in Article 31(2) of PPA to the contract documents which as a result of the nature of negotiated procedure without publication of a contract notice could not be specified at the moment of submission of contract documents or which are negotiated over during the procurement procedure. The contracting authority submits the qualification terms with the contract documents and the requirements of submission of documents certifying

33 33. the qualification to the interested person and controls the qualification of the person according to the stipulations of PPA and the provided qualification criteria prior to starting the negotiations over the terms of the public contract. The contracting authority holds negotiations over the terms of public contract with the interested persons having received the contract documents to award the public contract according to the provisions of Article 50(2) or (3) of PPA. 3.5 Special case of unsolicited proposals QUESTION ANSWER ARTICLE COMMENTARY 32. Does the Law / Regulations provide for the adequate framework for the Contracting Authority to handle unsolicited proposals/private initiative concessions (proposal relating to the implementation of a concession that is not submitted in response to a request or solicitation by the Contracting Authority) that ensure transparency and equal treatment and do not distort competition? XXX No, the Law does not provide for such adequate framework. 3.6 Review procedures

34 QUESTION ANSWER ARTICLE COMMENTARY Does the Law allow the bidders who claim to have suffered or that may suffer loss or injury, to seek review of the Contracting Authority s acts or failures to act? PPA Article 117 The tenderer, the candidate or the person interested in participation in the procurement procedure which has the possibility to participate in this procurement procedure at the relevant moment (hereinafter the submitter of appeal), may appeal the activity of the contracting authority, if it finds that the violation of this act by the contracting authority violates its rights, by presenting such appeal to the appeal committee (hereinafter the appeal committee) located by the Public Procurement Office. The appeal may be submitted on the following documents or decisions of the contracting authority: 1) contract notice; 2) tender invitation; 3) concession notice; 4) periodic indicative notice which starts the procurement procedure; 5) qualification system notice which starts the procurement procedure; 6) invitation to design contest; 7) contract documents; 8) exclusion of the candidate or tenderer from the procurement procedure; 9) qualification and non-qualification of the candidate and tenderer; 10) declaring the tender suitable; 11) rejection of the tender or rejection of all tenders;

35 35. 12) declaring the tender successful; 13) other decision of the contracting authority made in the course of the procurement procedure on the basis of this act which could violate the rights of the appealer.

36 PROJECT AGREEMENT 6 QUESTION ANSWER ARTICLE COMMENTARY 34. Does the Law contain (or refer to) a model concession/ppp agreement which use is optional (for guidance only as opposed to being mandatory) or a mandatory list of provisions to be included in the agreement (the content of such provisions being left for negotiation)? PPA, articles 4(2), 5, 31(2)3 PPA provides that the conditions of the agreement must comply with the requirements set out in PPA, yet PPA does not foresee a special model. 4.1 Duration and extension of the project agreement QUESTION ANSWER ARTICLE COMMENTARY 35. Does the Law provide that the concession duration should depend on the length of time taken for the amortization of the private investment and an appropriate return on the capital? XXX No, the Law does not provide for the duration of the concession. For information, please provide the given duration (if any) and relevant information in the Law with respect to the conditions for extension. 6 For further information on the project agreement definition, please refer to: PFI Guide, Consolidated Legislative Recommendations, Recommendations 12 and 40 to 68 included.

37 Termination of the project agreement QUESTION ANSWER ARTICLE COMMENTARY 36. Does the Law provide for a restrictive list of termination events (such as those listed below)? material breach by the other party; if performance is made impossible by the Law of Obligations Act Section 10 subsection 3 The Law of Obligations Act articles on termination of a contract apply to the termination of a public contract. occurrence of circumstances beyond either party s control; mutual consent.

38 Does the Law provide for (or does not prevent ) compensation of the concessionaire: in case of termination for public interest? for losses incurred as a result of public authorities acts? No No Law of Obligations Act Section 5 subsection 2 The Law of Obligations Act articles on infringement of the obligations by a contract party apply to a public contract in all cases of early termination (including in case of serious breach or failure by the concessionaire), for the non-depreciated value of assets financed by the concessionaire-? No 4.3 Tariff setting, service standards QUESTION ANSWER ARTICLE COMMENTARY 38. Does the Law provide for clear guidance for all aspects of interaction between the bodies that have the power to award concessions and the bodies that regulate tariffs and service standards? PPA Article 104 and 107 The Public Procurement Office: 1) advises the contracting authorities regarding the application of the Public Procurement Act; 2) exercises state supervision over carrying out public procurements and extrajudicial proceedings of misdemeanours in the extent and according to the procedure stipulated by law; 3) carries out international communication

39 39. within its competence in the questions of public procurements; 4) fulfils other tasks imposed on it with this act and with the legal acts established on the basis of it. The Public Procurement Office also evaluates the performance of the system of public procurements in the course of performing its tasks and may submit proposals for its improvement. The Public Procurement Office publishes on its website up-to-date information necessary for carrying out public procurements, including the international thresholds mentioned within three working days from their actual publication by the European Commission. The Public Procurement Office performs state supervision and it has the right to: 1) control the fulfilment of PPA in an unhindered manner and without prior notification at the contracting authority. If the Office has a suspicion of a possible violation of PPA in the course of the procurement procedure in process, the Office may be present at the opening of tenders or at other proceedings of procurement procedure carried out based on the present act, also to control the proceedings and decisions already carried out by the contracting authority;

40 40. 2) obtain information on the public procurements necessary for carrying out state supervision from the contracting authorities, also the originals or transcripts of documents concerning the public procurement; 3) make a decision or a precept according to the provisions of Article 108 of PPA, in case the contracting authority has violated the terms of PPA in the course of public procurement. 4.4 Financial responsibilities of concessionaire and Contracting Authority QUESTION ANSWER ARTICLE COMMENTARY 39. Does the Law provide that the concessionaire can collect tariffs or fees for the use of the facility or its services? XXX No, the Law does not provide that the concessionaire can collect tariffs or fees for the use of the facility or its services 40. Does the Law provide the possibility for fixed and/or consumption-based payments to the concessionaire by the public authorities? XX PPA Article 6(1) No, the Law does not explicitly provide the possibility for fixed and/or consumption-based payments to the concessionaire by the public authorities. Yet in Article 6 of PPA it is stated that the fee for the works mentioned in Article 4(3) lies either in the right of the concessionaire to exploit the work or in that right together with the monetary payment of the contracting authority.