Which Lawyer in Romania 2020 – PPP Chapter
Published in Which Lawyer in Romania 2020 – PPP Chapter, 13th edition
Adina Chilim-Dumitriu, Head of our Public Procurement and PPP practice, contributed to the PPP Chapter of the latest edition of Which Lawyer on Romania.
“Normally, in 2020 we would have expected a steady development in public procurement projects, both the ones already launched but especially the ones that were expected to be launched. Some of these expectations came through, with several major infrastructure projects launched this fall.
However, in the short term, it is likely that the global pandemic generated by SARS-CoV-2 will affect the development of major public procurement and PPP projects, as it affects almost every other industry, facet of the economy and, indeed, almost every other aspect of our lives. We have seen it first hand in the projects that we were involved in, with projects being significantly delayed due to key persons involved having contracted the virus. The indirect economic impact of the pandemic may cause delays, cancellations or at least a shift of focus with respect to other projects as well.
The PPP law is not perfect, but it does allow sufficient room for drafting a “workable” award documentation for a potentially successful PPP project.
However, the constantly shifting legislation and political interests have certainly had a negative impact and may account, at least in part, for the lack of successful PPP projects. The transfer of all PPP projects to an authority that previously had nothing to do with the organizing of procurement procedures or major public projects (the National Commission for Strategy and Prognosis – CNSP) and then, within two years, the cancellation of launched award procedures and the taking over of all PPP projects from CNSP by several ministries, did not do anything to encourage international companies with experience in PPPs to participate in such procedures in Romania.
What Romania really needs is a successful major PPP project, to rebuild confidence in the Government’s capacity to generate such successful projects, not just complicated award procedures that are expensive to participate in but also doomed from the beginning due to inadequate award documentation.
The Government’s negative track record discourages further participation from international experienced companies in future PPP award procedures. The Romanian Government has canceled no less than four times in 15 years the award procedure for what is arguably one of the most important infrastructure projects in Romania: Autostrada Ploiești – Brașov. This reality may need to be addressed by making important concessions in favor of the private partners, at least in the next few PPPs that will be attempted, in order to generate sufficient interest to compensate the distrust generated by the Government’s negative PPP track record.
In my view, the key to generating a successful PPP project is to involve, from the very conception of such project, international consultants and international financing institutions with experience in structuring, negotiating, awarding and supervising complex PPP projects. Working in-house to conceive a PPP procedure, or drawing from the experience of the governmental apparatus (however vast) will not work irrespective of the political colors of the government, simply because the experience of a major (and successful) PPP project does not exist in Romania for the time being.”
This article appeared in the 2020 edition of Which Lawyer in Romania, www.whichlawyer.ro.
