Public-Private Partnerships and Concessions

Proposed Solutions Carry Corruption Risk

Exclusion of public-private partnerships of low value from the Law and the establishment of two registers for public-private partnerships, instead of one in which all data would be available, as well as the wide range of reasons for avoiding public call for concessions, does not give confidence that the proposed solutions would indeed contribute to the prevention of corruption in these sensitive areas.

Institute Alternative submitted comments on the Draft Law on Public Private Partnerships and the Draft Amendments to the Law on Concessions.

Both drafts have been put up for public discussion without accompanying explanations, so it is not clear why the proposers have opted for certain solutions. There is still plenty of room for improvement and harmonisation with other regulations, especially with the Law on Public Procurement and the Law on State Administration.

Public-Private Partnership

The Draft Law on Public-Private Partnership (PPP) contains several very problematic solutions.

In the first place, it is proposed that this Law should not apply to public-private partnership projects worth less than five million euros. Based on the bad experience and consequences of introducing small value procurement in the Law on Public Procurement, we believe that such a solution would also have a negative impact on public-private partnerships. The Draft Law on PPP stipulates that projects of this relatively small value will be regulated by a special Government act. This leaves a possibility for general principles of transparency and competitiveness to be negatively affected in the future, given the wide discretion of public contractors, which was also the case with small value procurement.

The Draft foresees establishment of two registries – Register of Public-Private Partnership Projects and Register of Public-Private Partnership Contracts. However, in order to ensure transparency, it is necessary to merge these two registers into a single one, so that it would be easy to find for each PPP project a corresponding contract, as well as other information related to project, obligations of public and private partner, etc.

Source: Investitor.me

Another problem with this Daft Law is that it is not even minimally aligned with the Law on Public Procurement. This is primarily the case with procedures related to the composition of Tender Committee, but also public procurement procedures that can be applied both to public procurement and public-private partnerships.

Finally, there is still space to regulate better numerous issues related to centralisation of public-private partnership competences in one institution – the Investment Agency. In the current Draft, status of the Agency is not entirely clear and it is necessary to further consider how to improve control in this area. Particular attention should be given to the accountability system, i.e. to whom this institution will answer and report to, and who will control its work. Bearing in mind that the new Law on State Administration is currently being prepared, it is a good time to fully align these regulations.

Concessions

Proposed solutions in the Draft Amendments to the Law on Concessions foresee public participation only in the discussion of the concession act. Accompanying documentation, such as advisability analysis of achieving public interest by granting a concession, is not put up for a public discussion, thus limiting participation of interested public and citizens in deciding on all concession awarding acts.

Source: EPCG

Further, the Draft provides a wide range of grounds for not publishing a public call in the concession awarding procedure. One of the exceptions stipulates that a public call does not have to be published if the state receives an “offer containing a technical-technological project solution and other elements on the basis of which public interest and economic advisability of the realisation of infrastructure and other needs of strategic importance for Montenegro can be assessed (… ), and awarding a concession in this way would accelerate the project realisation”.

This very complicated formulation practically means that every bidder can contact the authorities with the project proposal, and the state can award them a concession without any public call, plan, transparency, competitiveness, etc.

***

We call on law proposers – the Ministry of Finance and the Ministry of Economy, as well as the Government and the Parliament, to reconsider solutions from the drafts of both laws before their adoption. We also call on the Agency for the Prevention of Corruption to give opinion on the degree to which these regulations are prone to corruption, which is one of its competencies.

In the framework of the project “Money Watch: Civil Society Guarding the Budget”, supported by the the European Union, Institute Alternative monitors the public finance management reform in Montenegro. Transparency of public spending and targeted spending of public money is one of the basic mechanisms for preventing corruption.

We recall that the improvement of the area of public-private partnership has been recognised as an area of particular risk for corruption in the Operational Document annexed to the Action Plan for Chapter 23 in the framework of negotiations with the European Union.

Consequently, primary purpose of adopting these long-awaited organic laws should be the improvement of transparency and prevention of corruption, rather than simplification and shortening of procedures, to the detriment of the integrity of law implementation.

Comments, objections and suggestions of Institute Alternative to the Draft Law on Public-Private Partnership (Only in Montenegrin)

Comments, objections and suggestions of Institute Alternative to the Draft Amendments to the Law on Concessions (Only in Montenegrin)

Institute Alternative Team

Leave a Reply

Your email address will not be published.