Presentation done in Seminar on PPP, organized by the Guanaruato State, in Colombia.

1. Public-Private Partnerships
Legal Frameworks for
PPPs
Mauricio Portugal Ribeiro
Head of the PPP Unit
Colombia, October 2006

2. Introduction
 The expression PPP encompasses several
different arrangements
 Ranging from BOT, DFBOT, O&M contracts,
concessions, PFI-like contracts, to the creation of joint
ventures or legal entities with private and public
participation, assets sales, divestitures etc.
 Traditionally, countries have legal and
institutional framework for concessions, public
works and public enterprises
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3. Questions Raised
 Is it necessary to have a legal and institutional
framework specifically for PPP?
 Is it convenient to standardize PPP?
 What should be standardized?
 What are the best tools and form to standardize
PPP?
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4. Is it necessary to have a legal and
institutional framework on PPP?
 In Civil Law Jurisdictions – sometimes
yes, as the Constitution or/and the Laws
require the issuance of a Legislative Act
to allow PPP
 Common Law Jurisdictions – generally
no, because Government contracting
activity falls under the general contract
law
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5. Is it convenient to
standardize PPP?
 Standardization is said to
 Reduce transaction costs
• Eases the process of production of project
documents
• Eases the process of making the structure of the
deals known to the private sector
 Improve the quality of the documents
 Fasten the structuring, procuring and
contracting of PPP
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6. Is it convenient to
standardize PPP?
 Standardization is said to
 Facilitate spreading of best practices
 Reduce flexibility
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7. Is it convenient to
standardize PPP?
 It is advisable to have
 High levels of standardization - procedures to
enter into PPP contracts
 Low to medium levels of standardization –
content of contracts
• It is important to preserve some flexibility
• The case of the SoPC as an exception
• Only PFI contracts
• Has a process of approval of exceptions in place
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8. What should be
standardized?
 Procedures
 affordability analysis and fiscal impact
 value for money access
 project studies and documents quality check
 competitive procedures to award the project
 Those procedures must be conduced by
agencies
 with clear responsibilities regarding the PPP program
 endowed with the adequate technical and financial
resources and political support to conduce them
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9. What should be
standardized?
 Contents
 Requirement of competition for the market
and when possible in the market
 Allow any sort of risk allocation
arrangements
• Possibility of evolving to risk sharing principles
 Foster arrangements that focus on outputs
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10. What should be
standardized?
 Contents
 Depending on the macroeconomic and political context
of the country, it may be a good idea to entitle
private partners to some sort of economic equilibrium
of the contracts
 Fiscal impact studies?
 Scale of PPP projects?
 Conflict solving mechanisms?
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11. What is the best form of
standardization?
 Two available models
 Legislative Act on PPP – Civil Law
Jurisdictions
• Difficulties to change (political timing)
• Generally is written in the form of a
Legislative Act – requires the project legal
advisers to develop contracts language
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12. What is the best form of
standardization?
 Two available models
 SoPC approach
• Form of guidelines on how to write a PFI contract eases the job
of the project legal advisers
• Contributes directly to
• Enhance the project documents quality
• Reduce the transaction costs
• Change is submitted only to technical timing - elaborated and
revised by the agency in charge of conducing the PPP Program
• Limited to PFI contracts (does not encompass all PPP contracts)
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13. What is the best form of
standardization?
 The discussion on the language to be
used by the standard documents
(rules or standards?)
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14. Contact information
MAURICIO PORTUGAL RIBEIRO
Chief of the PPP Unit
Ministry of Planning, Brazil
E-mail: mauricio.ribeiro@planejamento.gov.br
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