Public-private partnership (PPP) is a long-term partner relationship between a public and private partner where the private partner assumes the public partner’s obligation of designing, building and/or reconstructing public infrastructure with the purpose of providing a public service falling within the competency of the public partner, or with the purpose of securing for the public partner the necessary prerequisites for providing public services falling within the framework of his competencies or with the aim of providing a public service falling within the competency of the public sector.
“A Public-private partnership (PPP) enables an efficient way of implementing infrastructural projects and providing public services and promoting an innovative approach to the implementation of economic recovery measures“ (from the notification of the European Commission EC COM (2009) 615).
Green paper:
The Public-private partnership refers to forms of association between the public and private sector with the aim of securing financing, construction, reconstruction, management and maintenance of some infrastructures or providing services.
Why apply the PPP model of financing?
- risk distribution/sharing among private and public partners: the private partner assumes the risks of construction, management and disposal of the building (payment depends on disposal and performances during use)
- bridging financial limitations of a public partner who does not have sufficient financial funds for the realisation of projects usually of greater value
- better regulation/control of overall living costs of the project which are not encompassed by/calculated in the traditional form of financing
Basic contractual financing models:
- Concession (the concessionaire charges the service to the end user). If he both finances and builds the facility then it is BOT (build-operator-transfer)
- PFI model (private-financial initiative) (a private operator charges his services to the public sector, the facility user)
Who is competent for PPP matters in the Republic of Croatia?
The agency for the PPP is the central national body in charge of implementation of the Public-private Partnership Act in the Republic of Croatia. When speaking of the political frameworks of implementation of public-private partnerships, the Ministry of Economy and the Ministry of Finance have a central role and it is competent for the managing of the public-private partnership policy and concession policy.
Legal framework:
The area of public-private partnerships in the Republic of Croatia is regulated by the Act on Public-private Partnerships (OG 129/08) and pertaining regulations (OG 56/09), the Act on Concessions (OG 127/08) and the Public Procurement Act (OG 110/07, 125/08 – amendments), related to the procedures for assigning public procurement agreements and concession agreements.
