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Policy and Regulatory Environment for PPPs and Service Contracts
Governments may have to amend their laws to ensure that PPPs and service contracts with the private sector are permitted and that the responsible government agency has the authority to enforce the terms of the arrangement. Policy reforms that may be necessary include:
- Defining a clear legal framework that reduces the risks of regulatory uncertainty for private investors.
- Adopting transparent procurement rules and legislation that allow fair competition, and removing exclusivity rights in order to allow SMEs to compete with the main operator.
- Ensuring that the responsible government body overseeing the PPP has authority to apply sound financial and operational targets and accounting systems.
The legal framework must clearly allocate risk and liability. Since PPPs are a form of public procurement, appropriate rules on competition, tenders and selection criteria must be formulated.
Resource: European Commission, “Initiative on Public Private Partnerships and Community Law on Public Procurement and Concessions."
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