assessment of the quality of the ppp legislation and … · "public private partnership"...
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WS0101.3730241.1
JORDAN
ASSESSMENT OF THE QUALITY OF THE PPP LEGISLATION AND OF THE EFFECTIVENESS OF ITS IMPLEMENTATION
2011
I- PPP Legislative Framework
Assessment (LFA)
Compliance of the PPP legal framework with PFI Guide
recommendations1 and Best Practice
Core Area Rating Assessment
1- PPP Legal Framework
Existence of specific PPP law or a comprehensive set of laws regulating
concessions and other forms of PPP and allowing a workable PPP legal
framework
11/17
0,65
2-Definitions and
Scope of the Law
Existence of a clear definition of the boundaries and scope of application
of the concession legal framework (e.g. definition of "PPP", sectors
concerned, competent authorities, eligible Private party) limiting the risk
of a challenge to the validity of PPP contracts, irrespective of whether
the act is specifically targeted at PPP
10/17
0,59
3-Selection of the Private
Party
Mandatory application of a fair and transparent tender selection process.
Limited exceptions allowing direct negotiations, competitive rules for
unsolicited proposals and the possibility to challenge illegal awards.
28/45
0,62
4-Project Agreement Flexibility with respect to the content of the provisions of the Project
agreements which should allow a proper allocation of risks without
unnecessary or unrealistic/not bankable/compulsory
requirements/interferences from the Contracting Authority (obligations,
tariff, termination, compensation).
13/27
0,48
5-Security and Support Issues Availability of reliable security instruments to contractually secure the
assets and cash-flow of the Private Party in favour of lenders, including
"step in" rights and the possibility of government financial support, or
guarantee of, the Contracting Authority’s proper fulfilment of its
obligations.
9/21
0,43
1 UNCITRAL Legislative Guide on Privately Financed Infrastructure Projects, 2001 (hereinafter the "PFI Guide")
Checklist : Jordan
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6-Settlement of Disputes and
Applicable Laws
Possibility to obtain proper remedy for breach under the applicable law
through international arbitration and enforcement of arbitral awards.
13/15
0,87
General LFA Rating 60,7% Medium Compliance
II-Legal Indicators Survey
(LIS)
Effectiveness Assessment : How the PPP law works in practice
Core Area Rating Legal Indicator Survey
7- Policy Framework Existence of a policy framework for public private partnerships 16/24
0,67
8 Institutional Framework Existence of an institutional framework for public private partnerships 11/27
0,41
9- PPP Law Enforcement Award and implementation of PPP projects in compliance with the Law 23/27
0,85
General LIS Rating 64,3% Medium Effectiveness
OVERALL RATING 62,5% Medium Compliance/Effectiveness
Local Expert2: ZUBI Law Firm -Jumana Toukan & Leena Nusseir
2
The Local Experts in charge of each country have been consulted for the elaboration of the responses to the Checklist in their capacity of well recognized established law firm in their
respective country but the Local Experts as well as EBRD are in no way responsible for the responses given to any question in this Checklist as the Consultant was free to use any other sources of information for its final determination. In addition to the local experts much consideration has been given to a 2011 report comissionned by the European Investment Bank (EIB) including a review of the Private Public Partnership Legal & Financial Frameworks in the Facility for Euro-Mediterranean Investment and Partnership (FEMIP) Region (the Study). The Study was carried out by Pinsent Masons LLP, Mazars LLP and Salans LLP and with J.C. Law Firm and Mazars (UAE) as local experts for Jordan. The Study - Volume 2 – Country Analysis- May 2011- is referred to in the Checklist as the "EIB Report ".
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RATING: Key for assessment of Each Question
Yes 3 points Yes, with reservations 2 points No, with Limited compliance / redeeming
features
1 point
No 0 point
N/A Not applicable 0 point/ Not included in total
Key for Assessment of Each Core Area and for Overall Assessment
> 90% Very High Compliance/Effectiveness
≥ 70%-89% High Compliance/ Effectiveness
50%-69% Medium Compliance/ Effectiveness
30%-49% Low Compliance/ Effectiveness
< 30% Very low Compliance/ Effectiveness
TERMINOLOGY
So as to keep answers consistent and avoid ambiguity, we set out below some brief definitions of the terminology used in this questionnaire. Any
definition is provided solely to clarify some of the terminology used below. The reader should note that any such definition does not correspond
with any given definition under best international practice (which does not provide for any standardised PPP legal definitions recognised
worldwide) neither should it be interpreted that we recommend the adoption of such definitions under actual documentation, but they are
included in the interests of clarity for the completion of this questionnaire, and we should be grateful if you could adopt such definitions for the
purposes of completing the questionnaire.
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"Public Private Partnership" -"PPP" or "PPP project" includes all types of long-term arrangements between public authorities
and private institutions , including but not limited to; Concessions , BOT and derived forms, PFI and Institutional PPP. For the
purposes of this questionnaire, PPP excludes the sale of public assets or of public company shares which are part of a privatisation
process and also excludes public works, services or supply contracts which are subject to public procurement rules.
The following types of Public - Private Partnership Agreements may be adopted by a Contracting Authority for undertaking infrastructure
projects. These are solely indicative in nature and the Contracting Authority may seek to adopt a combination of the different contractual
arrangements, which incorporate some of their elements or combine elements.
"BOT" - (Build-Operate-and-Transfer)- and derived forms : a contractual arrangement whereby the Private Party undertakes to
finance, design, construct under a turnkey risk basis, operate and maintain an Infrastructure project for a specified period after
which period the project facilities are transferred to the Granting Authority usually without payment of any compensation.
The Private Party has the right to collect contract or market based tariffs or fees from the users of the infrastructure project, as
specified in the PPP agreement, to recover its investment and operating and maintenance expenses for the project. A BOT type of
PPP arrangement may provide for all the implementation and operational efficiencies of the private sector, together with new
sources of infrastructure capital. Derived forms of BOT contractual arrangements exist such as Build-Own-Operate-and-Transfer
(BOOT) similar to the BOT agreement, except that the Private Party owns the Infrastructure project during the specified term before
its transfer to the Contracting Authority or its designee, or such as Build-Own-and-Operate (BOO) which is a contractual
arrangement similar to the BOT agreement, except that the Private Party owns the Infrastructure project and no transfer of the
project to the Contracting Authority or its designee at the end of the fixed period is envisaged. Derived forms incorporating Lease
right rather than Ownership or dealing with rehabilitation or extension rather than construction which extent the possible
combination which for the purpose of this questionnaire will all be hereafter refferred to as BOT for simplification purpose exept
where legal specificcity requires specific treatment.
"Concession": is an act attributable to the State whereby a Contracting Authority entrusts to a third party the total or partial
management of public services for which that authority would normally be responsible and for which the third party assumes all or
part of the risk.
"PFI" (Private Finance Initiative) : a form of cooperation and partnership between public authorities and Private Parties which aim
to ensure the funding, construction, renovation, management or maintenance of an infrastructure or the provision of service to the
infrastructure without the delegation of the public service itself. It is a contractual arrangement whereby the Private Party
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undertakes the financing and the construction of an infrastructure project and after its completion transfer it to the Contracting
Authority or its designee. This arrangement may be employed in the construction of a public service facility for which the public
service must be operated directly by the contracting authority for whatever reason but the operation and maintenance of the facility
remain the responsibility of the Private Party for the entire duration of the PPP agreement. The contracting authority will reimburse
the total project investment on the basis of a rent based of an agreed schedule with the payment starting from the date of
commencement of operation and pay for the services rendered to the facility on a performance basis.
"IPPP"(Institutional PPP): a structural or corporate form of PPP which provide for the cooperation between public authorities and
a Private Party through a joint venture or mix (publid- private shareholding) company in which case all reference to the slection
process refers to the selection of the Private Party.
Other definitions:
The "Law" or "PPP Law": a law regulating any form of PPP including but not limited to Concession, BOT, PFI, IPPP and
including, for the purpose of this questionnair, the set of rules applicable to any PPP in the absence of a specific PPP law. The Law
for the purpose of this questionnaire also includes any implementing regulation and any form of governemental act regulating PPP.
"BOT Law" : a law regulating a BOT type of PPP in their multiple forms.
"Concession Law": a law regulating a Concession form of PPP.
"Contracting Authority": a public authority empowered to award a PPP and enter into Project Agreements
"PFI Law": a law regulating a PFI form of PPP.
"PPP unit" : specialized institution/agency/ministerial department established to promote and take care of PPP.
"Private Party" : Private Party or other entity in the form of a special purpose company to which a Project Agreement in general
has been awarded. [The word Private party will be used for the sake of this study even in case the PPP regulation allows PPP
business partner to be a mix company or even a public entity.]
"Project Agreement": an agreement(s) between the Contracting Authority and the Private Party regulating their respective rights
and obligations with respect to the PPP project.
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REFERENCE TO BEST PRACTICE
•UNCITRAL Legislative Guide on Privately Financed Infrastructure Projects, 2001 (hereinafter the "PFI Guide") and UNCITRAL
Model Legislative Provisions on Privately Financed Infrastructure Projects, 2003 (UNCITRAL Model Legislative Provisions).
•EC - Commission Interpretative Communication on Concessions Under Community Law dated 12 April 2000; together with additional
EU major documents/decision /recommendation on concessions including Directives 2004/18/EC and 2004/17 EC of 31 March 2004;
Green Paper on Public Private Partnerships and Community Law on Public Contracts and Concessions dated 30 April 2004; Report on
the public consultation on the Green Paper (SEC(2005) 629- Communication from the Commission to the European Parliament, the
Council, the European Economic and Social Committee and the Committee of the Regions on Public-Private Partnerships and
Community Law on Public Procurement and Concessions (Brussels, 15.11.2005.COM(2005) 569) European Parliament resolution on
public-private partnerships and Community law on public procurement and concessions (2006/2043(INI)); European Commission
Guidelines for Successful Public-Private Partnerships (2003).Commission Interpretative Communication Brussels, 05.02.2008
C (2007)6661on the application of Community law on Public Procurement, and Concessions to Institutionalised Public-Private
Partnerships (IPPP);
•EBRD Core Principles for a Modern Concessions Law – selection and justification of principles Prepared by the EBRD Legal
Transition Team.2005;
•UNIDO Guidelines for Infrastructure Development through Build Operate Transfer (BOT) Projects, 1996 (UNIDO BOT Guidelines);
and
•OECD Basic Elements of a Law on Concession Agreements, 1999-2000.
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OVERALL ASSESSMENT 2011 JORDAN
The legal framework for PPP and Concession in Jordan is based on the provisions of the Privatization Regulation Number (80) of 2008
for Implementing Privatization Transactions Issued in pursuance of Article (20) of The Privatization Law Number (25) of 2000.
Privatization means according to the Law the adoption of an economic methodology which enhances the role of the private sector in the
economy to include public sector enterprises the nature of which requires that they be managed on commercial bases.
It is therefore the privatization law which was designed for the development of the private sector participation in public services and
infrastructure and not specifically for PPP which has provided the legal framework for PPP.
Jordan officially launched its PPP Program on June 23rd 2008, and assigned its implementation to the Executive Privatization
Commission (EPC) as a way of continuation of its Privatization Program.
The Privatization Regulation defines PPP as "A relatively long-term written agreement between the public and private sectors for the
purpose of providing a service of a general nature or implementing a project or performing a certain task whereby project financing and
allocation of risks arising therefrom shall be pursuant to the contract."
The Privatization Law (Article 4) provides that the restructuring and privatization of public institutions or enterprises owned by the
public sector can be carried out by adopting in addition to classical privatization methods the following type of agreement or license :
BOT, BOO,BOOT, as well as granting the private sector the right to build a particular enterprise with a monopolistic and exclusive right
to exploit it pursuant to a license or an agreement signed with the Government for this purpose or any other method not specified in the
Law as decided by the Council of Ministers.
The current legislation does enable for all types of PPP, but there is no specific legislation or regulation dealing with PPP procurement
in detail and no regulation at all concerning PFI or PPP applicable to the non merchant sector.
The experience successful project but also of the withdrawal of several projects which could not be achieved on a project finance basis
have conducted the government to enlarge the scope of PPP and to follow the PFI route to be opened to smaller project on a PFI type of
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project. And a new PPP law is now under consideration for some time and when enacted possibly in the near future will become the
specific legal framework for the concession and PPPs in Jordan.
ASSESSMENT & LEGAL INDICATOR SURVEY
1. LEGAL FRAMEWORK
1.1 Existence of different forms of PPP legal framework
QUESTION
ANSWER
ARTICLE
COMMENTARY
1. Does the country have a single act dealing
specifically with Concessions or a generalised
act incorporating the legal framework for PPP,
including Concessions ?
Jordan does not have a single piece of legislation
dealing specifically with Concessions or incorporating
the legal framework for PPP. However, Regulation
Number (80) of 2008 for Implementing Privatization
Transactions (hereafter "PR")
issued in pursuance of Article (20) of The Privatization
Law Number (25) of 2000 (hereafter "PL") (PL and
PR shall collectively be referred to as the “Law”) not
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dealing specifically and exclusively with PPP, but
allowing all types of PPP in most sectors other than
mining. However and in addition to the Law, some
sectors have sector-specific laws, which allow the
relevant authority in such sectors to by-pass PL and PR
when implementing PPP in its sector. For example, the
Water Authority Law Number 18 of 1988, Public
Electricity Law Number 64 of 2002 and the
Telecommunication Law Number (13) of 1995 deal
with PPP with respect to the water, electricity and
telecommunication sectors, respectively. As for
mining, there is no single legislation or group of
legislations which deal with concessions or PPP
relating to same other than the general principle for
Concessions stipulated under Article (117) of the
Jordanian Constitution that reads as follows:
“any privilege given to grant any right relating to an
investment in mining, minerals and public facility must
be ratified by a law.”
Additionally, the Law for the Regulation of Natural
Resource Affairs Number 12 of 1968 grants the Natural
Resource Authority (“NRA”) the power to grant the
private sector with mining licenses. The Mining
Regulation Number 131 of 1966 sets out the general
framework for granting such licenses that allows NRA
to grant the license without the need to go through the
procedure set out in the Law.
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2. Does the country have an act that allows BOT or
derived forms such as BOOT, BOO or other
forms either as part of a specific act or as part of
a general PPP Law?
PL4 Article 4 of PL specifically provides that the
restructuring and privatization of public institutions or
enterprises owned by the public sector can be carried
out by adopting in addition to classical privatization the
following methods:
"C.The transfer of the management of enterprises from
the public sector to the private sector pursuant to
agreements according to which the private sector shall
be entrusted with the management and operation of
these enterprises.
D.The adoption of one of the following options to
establish specific investment enterprises pursuant to
agreements reached for this purpose between the public
sector and the private sector.
i.The private sector builds the enterprise, exploits it and
operates it for a specific period then transfers it to the
public sector at the end of the said specific period
(BOT).
ii.The private sector builds the enterprise, transfers its
ownership to the public sector while retaining the right
to exploit and operate it for a sepcific period (BTO)
iii.The private sector builds the enterprise, owns it,
exploits it and operates it for its own account (BOO)
iv.The private sector builds the enterprise, owns it,
exploits it and operates it then transfers it and its
ownership to the public sector (BOOT).
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E.Granting the private sector the right to build a
particular enterprise with a monopolistic and exclusive
right to exploit it pursuant to a license or an agreement
signed with the Government for this purpose.
F.Any other method decided by the Council of
Ministers."
3. Does the country have an act that allows PFI,
either as part of a specific act or as part of a
general PPP Law?
PL 4 F
PFI is not one of the methods expressly provided under
article 4 of PL. Therefore, it will fall within the ambit
of article 4/F of PL which will require the Council of
Minister approval for same to be allowed.
4. If the answer is No to any of the three first
questions concerning a specific form of PPP
does the Constitution or other general act (ex:
the Civil Code, sectorial law) recognise the
basic principles of the concerned PPP and
regulate its granting?
N/A
For our general information: Is a new PPP Law or an amendment to the existing Law being prepared, or considered, in the country?
If so, at what stage of the legislative process is such new PPP Law or amendment to the existing Law?
Yes, a draft PPP Law was prepared by EPC, which was established pursuant to PL. The EPC was entrusted, pursuant to the Council of Ministers
resolution dated 2006, to draft such law. The draft law was submitted to the Legislative Bureau which amended the draft and reverted same to the
Council of Ministers for their approval. Currently, the draft law is being reviewed by the House of Representatives (the lower house of
Parliament). Until this day, the House of Representatives has not issued its decision regarding same. However, it is worth noting that after the
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House of Representatives approves the draft law, the draft is submitted to the Senate (the upper house of Parliament) for their approval and
thereafter submitted to the King for his approval prior to enacting the law by publishing it in the Official Gazette.
1.2 Specificity and integration of PPP legal framework
5. If the country has a Public Procurement Law, is
it clear to what extent does the Public
Procurement Law apply or not to the granting of
a PPP?
The PL and PR regulation make no reference to the
Public Procurement Law, but provide for a concurrent
set of rule which implicitly excludes its application.
6. If the country has sectorial laws regulating PPP
in specific sectors, is it clear which law is
applicable to the granting of PPP for each
particular sector?
XX The Law is a general law governing privatisation and
PPP in Jordan. Nonetheless, certain sectors including
but not limited to mining, electricity and
telecommunication have their own laws, which regulate
PPP in such sectors. However, it is not clear which law
applies and how they interrelate with PL and PR.
7. Does the country have a Law allowing the
Institutional form of PPP (IPPP) which
regulates IPPP participation to PPP?
XX PL 4 F IPPP is not one of the methods expressly provided
under article 4 of PL, which will require the Council of
Minister approval for allowing same. PPP cannot be
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awarded to public entities as it is only restricted to
private entities as stipulated in the definition of PPP
under PR (please see the definition set out in question
2.1(1) above). Additionally, neither the PL law nor PR
refers to IPPP, however, PPP may be awarded to IPPP
as it is deemed to be a private entity.
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2. DEFINITIONS AND SCOPE OF THE PPP LAW(S)
2.1 PPP definition 3
QUESTION
ANSWER
ARTICLE
COMMENTARY
1. Does the Law define one or several term(s) (i.e.
"PPP", "Concession", "BOT", "Partnership"
etc. and/or respective agreements) for the
arrangements to be regulated by the Law which
specify the limits of application of the Law?
For our general information,: please provide the
given definition(s), if any.
Art 2 PR There is no single legislation that defines the terms set
out in the questions and some of the terms are not defined
under any legislation. For example, PR defines PPP as:
"A relatively long-term written agreement between the
public and private sectors for the purpose of providing a
service of a general nature or implementing a project or
performing a certain task whereby project financing and
allocation of risks arising therefrom shall be pursuant to
the contract."
3 PFI Guide, Consolidated Legislative Recommendations, Recommendation 3and Commission Interpretative Communication on Concessions Under Community Law dated
12 April 2000; together with additional EU major documents/decision /recommendation on concessions including Directives 2004/18/EC and 2004/17 EC of 31 March
2004; Green Paper on Public Private Partnerships and Community Law on Public Contracts and Concessions dated 30 April 2004; Report on the public consultation on the
Green Paper (SEC(2005) 629- Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the
Committee of the Regions on Public-Private Partnerships and Community Law on Public Procurement and Concessions (Brussels, 15.11.2005. COM(2005) 569)
European Parliament resolution on public-private partnerships and Community law on public procurement and concessions (2006/2043(INI))
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In connection with BOT, article 4 of PL describes BOT,
but does not define same. Additionally, and with respect
to Concessions, there is no definition for what
concessions are in any law, regulation or instructions.
The only reference to Concession is in the Constitution
under Article (117) (please see the comment on question
1.1 (1) above). Therefore, with respect to the definition of
Concession, Jordan relies on custom for the definition of
same. As for Partnerships, there is no definition for same
in any law, regulation or instruction.
2. Does the Law apply to all contracts entered into
that fall under the definition(s) given above,
irrespective of the name given to such contract
(concession, license, usufruct right, lease, etc.)?
Yes, in accordance with Civil Law principles
3. Does the Law make a clear distinction between
a PPP agreement (such as a Concession) and a
license (i.e. an authorisation to operate by a
public authority)?
PL 4 E The law contemplates the two possibilities licence and
agreement. However, it does not explain the difference as
it only stipulates that:
E.Granting the private sector the right to build a
particular enterprise with a monopolistic and exclusive
right to exploit it pursuant to a license or an agreement
signed with the Government for this purpose.
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2.2 Contracting Authority
QUESTION
ANSWER
ARTICLE
COMMENTARY
4. Does the Law identify (or allow clear
identification by reference to other laws or
regulations) the public authorities ("Contracting
Authorities") that are empowered to select
projects, prepare for, and award PPPs and enter
into Project Agreements ?
PL Art 7
The Law does not identify the Contracting Authorities
per se, but vests such right with the Council of
Ministers where it stipulates that the Council of
Ministers shall have the following responsibilities and
powers:
A ii.Specifying the public institutions or public-sector
enterprises it decides to be privatized, or restructured
in preparation for privatization, and adopting the
appropriate implementation method to achieve this
purpose.
iii.Specifying companies in which the Government
holds shares in order to privatize those shares pursuant
to the legislations in force.
For our general information: If yes, which of the following authorities are identified:
National authorities (e.g.: the government, ministries, and independent agencies);
Regional/state-level authorities;
Local or municipal authorities; or State owned companies?
Since the law vests the authority to identify the Contracting Authorities with the Council of Ministers, then it is difficult to depict which of the
above-referred to institutions are identified as there is no exhaustive list.
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2.3 Private Party and Project Company
QUESTION
ANSWER
ARTICLE
COMMENTARY
5. Is it possible for a PPP be awarded to a foreign
company, a Private Party or to a domestic
company with foreign participation in the share
capital and/or management (without
discrimination)?
Although it is not specifically stated in PL, but there are
no restrictions on foreign participation to PPP or
Privatization except in the restricted sectors detailed in
the Regulation for the Promotion of Non-Jordanian
Investments Number 54 of 2000. However, an
exemption can be granted by the Council of Ministers
upon the recommendation of the Ministry of Industry
and Trade enabling non-Jordanian investors to own
higher percentages in large development project which
are of special importance. PPP are considered large
development projects and enjoy special importance.
Therefore, the Council of Ministers may grant such
exemptions.
For our general information: can a PPP be awarded to public entities or to entities jointly owned by private and public entities (IPPP)?
Are there restrictions imposed on such contracts?
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2.4 Concerned sectors4
QUESTION
ANSWER
ARTICLE
COMMENTARY
6. Does the Law identify (or allow identification
by reference to other laws or regulations) the
sectors and/or types of infrastructure and/or
services in respect of which a PPP may or may
not be granted?
XXX
No identification, No exclusion by the law
7. Do the list of sectors eligible for PPP
correspond to an open-ended one (as opposed to
being exhaustive) allowing (or at least not
preventing) PPP to be granted in numerous
sectors”?
N/A
8. Do the sectors eligible for PPP includes non
commercial activities such as the provision of
government services (such as schools, hospitals,
N/A
4 For further information on the concerned sectors please refer to:PFI Guide, Consolidated Legislative Recommendations, Recommendation 3 and 4.
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prisons, defence and housing) in addition to the
merchant sectors of the economy (energy,
transport, water, oil and gas).
For our general information: Please indicate the restrictions if any imposed by the Law on the sectors eligible for PPP:
N/A.
3. SELECTION OF THE PRIVATE PARTY5
3.1 General Considerations
QUESTION
ANSWER
ARTICLE
COMMENTARY
1. Does the Law require, in principle, the
Contracting Authority to select Private Parties
through a competitive tender process?
PR 11
In the event the steering committee established pursuant
to PR (“Steering Committee”) recommends, pursuant to
Article 11 of PR, tendering the bids in two phases then
same shall be similar to a competitive bid process.
Article 11 of PR reads as follows:
"A bid shall be tendered for selection of an investor in
one phase, the Steering Committee may, in specific
cases, recommend tendering the bid in two phases"
5 For further information on the selection of the Private Party, please refer to:PFI Guide, Consolidated Legislative Recommendations, Recommendations 14 to 39 included.
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PR 4 B
The Steering Committee shall, however, in relation to
the implementation of any Privatization Transaction
take the appropriate decision with respect to :
"5. - The recommendations to the Council to approve
resorting to direct negotiation or solicitation of
proposals to implement the Privatization Transaction. "
This wording, therefore, indirectly provides for the
possibility of direct negotiation under unspecified
circumstances. However, in practice such direct
negotiations where never made.
2. Is there reference in the Law to the principles of
transparency, equal treatment and
proportionality?
Art 5 PL "A.Compliance with the principles of transparency,
openness and fair competition."
3. Is there a provision in the Law concerning the
publication of information related to the
competitive procedures in the country media
and in the international media (for large
projects)?
Art 15 PL
"A.Before the commencement of any privatization
transaction, the Commission [EPC] shall publish in at
least two daily newspapers and over two extended
intervals the conditions of and requirements for any
such privatization transaction at a date specified by the
Council [Privatisation Council] for this purpose."
Therefore and in light of the above referred to article,
the publication of the information in relation to the
competitive procedures shall only be made in local
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media and not in international media.
4. Are there provisions within the Law or any
special manual or recommendations governing
in detail the selection of the Private Party (i.e.:
the pre-selection of bidders, the procedure for
requesting proposals or other procedure such
as competitive dialogue/two stage procedure)?
PR
Art 13 C 2
All the provisions of PR govern the selection of the
Private Party for any privatization process with few
specific provisions for PPP, but not in much detail.
5. Does the Law provide that if the Contracting
Authority rejects an applicant at the time of pre-
selection or disqualifies a bidder, it must make
public the reasons for the decision (or inform
the rejected bidder thereof explaining the
reasons for rejection)?
PR Art.
17/a
PR Art 18
The EPC shall, in cooperation with the Steering
Committee and after the evaluation of the technical
proposal, inform the investors, whose proposals were
rejected, of the rejection decision.
A. The Steering Committee shall invite the preferred
bidder for negotiations with a view to issue a decision
to award the bid and sign the privatization contracts.
B. If negotiations do not result in the signing of the
privatization contract with the Preferred Bidder, it is
permissible to terminate negotiations therewith
provided the Bidder is notified of the reasons thereof,
and the second Preferred Bidder shall be invited to
negotiate in accordance with the set principles and
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conditions.
3.2 Award of PPP
QUESTION
ANSWER
ARTICLE
COMMENTARY
6. Does the Law provide that all proposals are
ranked solely on the basis of a predefined
evaluation criteria set forth in the pre-selection
documents/ request for proposals?
PR Art.
13/a/4
7. Does the Law provide for the publication of a
notice of the award of the project, identifying
the Private Party and including a summary of
the essential terms of the project agreement?
PR Art. 18 PR merely provides for the publication of the notice of
the award of the project and only refers to identifying
the Private Party not the terms of the project agreement.
8. Does the Law provide that the Contracting
Authority or any other public authority maintain
records of key information pertaining to the
selection and award proceedings?
PR Art.
14/d & 7/c
The PR or PL do not refer to maintaining records for
key information to the selection and award proceedings
per se. However, PR indicates that a copy all minutes of
meetings of the Steering and Technical Committees
shall be deposited with the EPC and kept for a period of
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no less than three (3) years.
9. If the answer to the previous question is Yes,
does the Law provide that such record is
accessible to the public, or at least to interested
parties?
XXX
Nothing in PL or PR expressly or impliedly states that
such records or minutes are accessible to the public or
any interested party. Therefore, by implication they are
not accessible to such interested party or public.
3.3 Final negotiations
QUESTION
ANSWER
ARTICLE
COMMENTARY
10. Does the Law contain provisions regulating
final negotiations (i.e. post contract award) so
that transparency, equal treatment and
competition are preserved?
PR Art 18A
PR Art 18D "Negotiations must not result in a fundamental change
in the submitted proposal or bid documents in a way
that would breach the principles of competition and
transparency among investors"
11. Does the Law provide that the Contracting
Authority has the authority to terminate
negotiations with the invited bidder if it
becomes apparent that the bid will not result in
an agreement and start negotiations with the
second ranked candidate?
PR Art 18 B "If negotiations do not result in the signing of the
privatization contract with the Preferred Bidder, it is
permissible to terminate negotiations therewith
provided the Bidder is notified of the reasons thereof,
and the second Preferred Bidder shall be invited to
negotiate in accordance with the set principles and
conditions."
3.4 PPP Award without competitive procedure
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QUESTION
ANSWER
ARTICLE
COMMENTARY
12. Does the Law provide that the Contracting
Authority has the authority to award a PPP
without a competitive process? Is this only in
limited/ exceptional circumstances?
PR 4 B 5 In practice such direct negotiations where never used.
13. Does the Law provide for a procedure, set of
rules or principles to be respected when
awarding a PPP without a competitive process?
XXX
For our general information, please specify the conditions which would allow such direct negotiations?
The Law does not specify any conditions, which would allow such direct negotiations.
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Special case of unsolicited proposals
QUESTION
ANSWER
ARTICLE
COMMENTARY
14. Does the Law provide for an adequate
framework for the Contracting Authority to
manage unsolicited proposals/private initiatives
(i.e. a proposal relating to the implementation of
a PPP that is not submitted in response to a
request or solicitation by the Contracting
Authority) that ensures transparency and equal
treatment and does not distort competition?
XXX
3.5 Review procedures
QUESTION
ANSWER
ARTICLE
COMMENTARY
15. Does the Law allow the bidders who claim to
have suffered, or that may suffer loss or injury,
to seek review of the Contracting Authority’s
actions or failure to act?
PR Art 20
"Bidders who submit proposals pursuant to the
provisions of this Regulation may object to the outcome
of the technical evaluation to the Steering Committee
within five working days from the date of notification of
the decision’s subject matter whereby the Steering
Committee must make a decision on the objection within
ten working days from the date of receipt of the objection
whereby its decision shall be final in this regard".
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However, the provision of the above-cited article may be
deemed unconstitutional as you cannot prevent an
injured party from seeking relief from courts.
Therefore, the Law only expressly provides that the
bidder who submitted a proposal may object the outcome
of the technical evaluation. There is nothing in the Law,
which explicitly expresses that in any other situation the
bidder may seek review of the Contracting Authority’s
actions or omissions. However, in the event a bidder
suffers loss or injury, it may seek relief from the courts
and review the Contacting Authority’s actions or
omission. Kindly note, that in any situation if the bidder
seeks relief from the court and it is able to prove the
damage, loss or injury, then the courts may only award
compensation for actual damages, which do not include
loss of profit or loss of business opportunity (please see
answer to question 8 of section 9.3).
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4. PROJECT AGREEMENT6
4.1 Model or list of provisions
QUESTION
ANSWER
ARTICLE
COMMENTARY
1. Does the Law give flexibility to the negotiation
of most terms of the Project agreement and if it
contain (or refer to): (i) a model PPP agreement
it is an optional template agreement for
guidance only or (ii) a list of mandatory
material provisions which must be included in
the agreement, the content of such provisions is
left for negotiation)?
PR
Art 13 C 2
The Law does not contain a model PPP agreement.
However, Article 13(c) of the PR does not specifically
mention the project agreement, but rather states that the
EPC, in coordination with the Steering Committee,
shall provide the project investors with heads of terms
containing the following:
B. In the event of a PPP:
The PPP Agreement. This should set out (i) the rights
and obligations of each party, (ii) the purpose of the
partnership and a description of the tasks and/or
services that will be undertaken and provided, (iii) the
indicators that will be used to guarantee the quality of
work and services, (iv) the financial obligations of each
party, (v) the proposed financing for the
implementation of the transaction, (vi) the allocation of
6 For further information on the project agreement definition, please refer to:PFI Guide, Consolidated Legislative Recommendations, Recommendations 12 and 40 to 68
included.
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risks under the transaction, (vii) tariffs payable by the
ultimate beneficiary of the services, including tariff
adjustment and collection, (viii) the requirements for
transferring ownership of the project to the government
and (ix) any other provisions.
In light of the foregoing, the PR sets out standard heads
of terms which the EPC will include the underlying
project agreements. It is a mandatory obligation that
these heads of terms are included. The provisions of the
heads of terms are all subject to negotiations provided
that same shall not be fundamentally changed so as to
not compromise the principle of transparency and fair
competition indicated in the Law.
4.2 Duration and extension of the Project Agreement
QUESTION
ANSWER
ARTICLE
COMMENTARY
2. Does the Law provide that the duration of the
Project Agreement should depend on the length
of time taken for the amortisation of the Private
Party's investment and an appropriate return on
the capital?
XXX
PR Art 2
The inclusion of provisions relating to the length of the
Project Agreement is left to the outcome of negotiations
between the private party and the government.
The inclusion of provisions relating to the extension of
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3. Does the Law provide that the renewal or
extension of the Project Agreement should be
limited and depend on exceptional
circumstances (such as Contracting Authority
default or an event of force majeure)?
XXX the Project Agreement is left to the outcome of
negotiations between the private party and the
government.
For our general information, please provide the given minimum and maximum duration (if any)
The Law or the sectorial laws do not set out a minimum or maximum duration for Project Agreements.
4.3 Termination of the Project Agreement
QUESTION
ANSWER
ARTICLE
COMMENTARY
4. Does the Law leaves open to the Project
Agreement negotiations the list of possible
ground for termination and the content of the
termination provision?
The Law does not specifically deal with the list of
possible grounds for termination, and these provisions
may be subject to the negotiations between the parties
based on the type of project being undertaken provided
that such negotiations do not result in fundamental
changes to the proposed draft agreements attached to
the request for proposal provided to the bidders.
5. If the answer to the previous question is No does
the Law provide for a list of grounds of
termination which does not affect the balance
between the parties rights and obligations (one
sided provisions) or the stability of the
contractual relation under the Project
N/A
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Agreement (e.g.: too large or non exhaustive
list)?
6. Does the Law provide for (or at least does not
prevent) compensation of the Private Party for
losses incurred as a result for termination on the
grounds of public interest for losses incurred as
a result of public authority acts?
The Law does not specifically deal with compensation
as a result of termination, and such provisions may be
subject to the negotiations between the parties based on
the type of project being undertaken.
7. Does the Law provide for (or at least does not
prevent) compensation of the Private Party for
all cases of early termination (including in case
of serious breach or failure by the Private
Party), for fair value after depreciation of the
assets financed by the Private Party?
The Law does not specifically deal with compensation
as a result of early termination, and such provisions
may be subject to the negotiations between the parties
base don the type of project being undertaken.
4.4 Tariff setting, service standards
QUESTION
ANSWER
ARTICLE
COMMENTARY
8. Does the Law provide clear guidance on all
aspects of interaction between the bodies that
have the power to award PPP and the bodies
that regulate tariffs and service standards?
XXX
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4.5 Financial responsibilities of the Private Party and Contracting Authority
QUESTION
ANSWER
ARTICLE
COMMENTARY
9. Does the Law provide that the Private Party can
collect tariffs or fees for the use of the facility or
its services?
PR Art 13 C
2
Partnership agreement encompassing the rights and
obligations of parties to the contract shall include:
"Tariffs payable by the beneficiary of the service or
work and a tariff adjustment mechanism and collection
mechanism thereof";
10. Does the Law provide for the possibility of
fixed and/or consumption-based payments to the
Private Party by the Granting Authority or other
public authorities (in the case of Power
Purchase Agreement , shadow tool or PFI for
instance) ?
XX The law and the Regulation are silent on this point but
experience show that payment mechanisms vary
depending upon the project allowing many different
types of payment mechanism to be adopted
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5. SECURITY AND SUPPORT ISSUES7
5.1 Security Interests
QUESTION
ANSWER
ARTICLE
COMMENTARY
1. Does the Law provide for (or does not
specifically prevent) a Private Party to create
security interests over the project assets, rights
and proceeds or other valuable guarantees
related to the project?
The law is silent about this, but experience show that
Lenders are able to obtain the necessary level of
security over project assets. .
2. If the answer to the previous question is Yes,
does the Law clearly state which types of
security can be provided and include some of
the most common type of guarantees in project
financing (such as those listed in the request for
general information below)?
XX
For our general information, please can you confirm whether a Private Party may pledge or assign by way of security:
By way of introduction, the following types of security exist under Jordanian law:
(i) Floating charge over all the company’s moveable assets, whether future or present.
7 For further information on support and financial securities, please refer to:PFI Guide, Consolidated Legislative Recommendations,Recommendations 13, 49, 57 and 60.
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(ii) Pledge of shares (whether private or public).
(iii) mortgage of immovable assets (land).
(iv) mortgage of moveable assets by way of possessive mortgage.
(v) mortgage of moveable assets with a central registry (vehicles, aircraft and ships).
(vi) Assignment of rights, obligations, accounts, etc.
the proceeds and receivables arising out of the PPP;
A floating charge may be created over all the company’s moveable assets, including proceeds and receivables. Additionally, all the accounts
can be assigned. It is worth noting that Jordanian law does not recognise ‘assignment by way of security’ and only recognises outright
assignment.
the assets for which it has rights of use under a project agreement;
As a note, all the assets must be owned by the company for it to pledge them.
In addition to the floating charge created over assets (above), moveable assets (such as fixtures, machinery, equipment), which do not have
a central registry (such as vehicles, aircraft and ships) may be subject to a possessive mortgage. A possessive mortgage involves the passing
of possession of the pledged assets to the pledgee/mortgagee. In order for the pledgor to retain the assets for use in the Project, the parties
may enter into an “Adel Appointment Agreement”, whereby the assets are handed to an individual/company called the “Adel”, which holds
the assets in safe keeping for the pledgee, and lends the assets back to the pledgor for use.
In addition to the floating charge over moveable assets (above), moveable assets that have a central registry (vehicles, ships and aircraft),
may be mortgaged by filing the mortgage agreement with the relevant authority that maintains the asset registry. For example, aircraft may
be mortgaged by filing the mortgage agreement with the Civil Aviation Regulatory Commission.
its property;
Immoveable assets (land) may be mortgaged, and such mortgage should be registered with the Land and Survey Department.
shares of the Project Company;
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Shares of the project company can be subject to pledge.
the project agreement; or
The Project Agreement may be assigned pursuant to an assignment agreement. Furthermore, the parties may enter into a direct agreement,
allowing lenders/mortgagee’s step-in rights into the Project Agreement.
obtain other valuable guarantees (please specify)?
Corporate/Shareholder guarantees and in some cases government guarantees may be given. Furthermore, the company may issue
irrevocable letters of credit in favour of third parties.
5.2 Government support
QUESTION
ANSWER
ARTICLE
COMMENTARY
3. Does the Law provide for (or does not
specifically prevent) the public authority to
provide support to the Contracting Authority
and a guarantee for the proper implementation
of the PPP by the Contracting Authority?
PR Art 5
PR Art 8
Description of the financial support if required
from the government and the proposed
mechanism for providing the same;
Description of the economic justifications for
government support for the project, if the
project requires such support;
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4. Does the Law provide for (or does not
specifically prevent) the Public Authority to
provide financial or economic support for the
implementation of PPP?
PR Art 5
PR Art 8
idem
5. If the answer to the previous question is Yes,
does the Law clearly state which public
authorities may provide such support and which
types of support can be provided? (i.e. tax and
customs benefits; foreign exchange protection
(convertibility and transfer guarantees;
subsidies; equity or loan participation)?
XXX
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5.3 Lenders’ rights
QUESTION
ANSWER
ARTICLE
COMMENTARY
6. Does the Law provide for the Parties to arrange
the financing with reasonable flexibility under
the Project Agreement without strict time
constraints or other constraints (except with
respect to security package and government
support)?
PR Art. 13 The Law only stipulates that the heads of terms
provided to the bidders should include the method
of financing which is subject to negotiations
provided that the negotiations do not result in a
fundamental change in a way that would
compromise transparency and fair competition
between the bidders. The Law does not deal with
financing in much detail, but experience show that
Lenders are able to obtain standard lender
protection, including direct agreements.
7. Does the Law provide, in the event of the
default of the Private Party for the lenders to
“step-in” or substitute the Private Party with a
qualified new Private Party without initiating a
new tender process?
XXX
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6. SETTLEMENT OF DISPUTES AND APPLICABLE LAWS8
6.1 Settlement of disputes
QUESTION
ANSWER
ARTICLE
COMMENTARY
1. Does the Law permit the Contracting Authority
to enter into a Project Agreement that is subject
to international arbitration?
Not specified but not a problem in practice.
2. Has the government of the country ratified the
Washington Convention on the Settlement of
Investment Disputes (ICSID) (1965)?
30 0ctober 1972
3. Has the government of the country ratified the
New York Convention on recognition and
enforcement of foreign arbitral awards (1958)?
15 November 1979
8 For further information on the settlement of disputes, please refer to: PFI Guide, Consolidated legislative Recommendations, Recommendations 57, 69 and 71.
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6.2 Applicable laws
QUESTION
ANSWER
ARTICLE
COMMENTARY
4. Does the Law permit (or does not prevent) the
Contracting Authority) to enter into side
agreements to the Project Agreement (such as a
direct agreement with the lenders to the project
or a support and guarantee agreement in
respect of the Project Agreement) that is
governed by foreign law.
Not specified but common in practice. Jordanian law
only applies to all PPP agreements but not to the side
agreements such as financing contracts generally
governed by foreign law.
5. Has the country ratified any international
convention for the protection of foreign
investments?
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II- EFECTIVENESS ASSESSMENT: HOW THE LAW WORKS IN PRACTICE:
(Please comment based on the previous 2006 effectiveness general assessment)
7. POLICY FRAMEWORK
7.1 Existence of PPP Policy Framework
QUESTION
ANSWER
ARTICLE
COMMENTARY
1. Is there a general/national policy framework
(explicit or implicit) for PPPs for infrastructure
or public services?
EPC has assumed the lead role in the PPP program
in 2006 Moreover, and pursuant to Article 20 of the
Privatization Law no. 25 for the year 2000 - the
sole statute for PPPs in Jordan- EPC prepared
Regulations no. 20 for the year 2008 which had
been endorsed by the cabinet and issued in August
2008. Furthermore, and in its endeavor to provide
for the ample enabling environment for PPPs, the
institutional framework has been further
empowered by the establishment of the PPP
committee in accordance with decision no. 2602
endorsed by the Council of Ministers on September
3rd 2008. The EPC is currently working on a PPP
Policy Paper, but up to date has not released same.
Sources: EIB report 2011
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7.2 PPP Awareness and Sustainability
4. Is there a national and/or municipal /regional
long term programme for PPP promotion and
awareness?
Pursuant to the Council of Ministers’ resolution no.
(916) dated 10 May 2011, the Council of Ministers has
agreed to certain reforms relating to the structure of
certain governmental authorities, agencies and
corporation.
The following reforms are the ones of relevance:
(i) merger of Jordan Investment Board with
the Development Zone Commission and
the obligations of Jordan Enterprise
Development Corporation relating to
promoting exports and convening
exhibitions in one entity named “Jordan
Development and Investment Board”;
2. Is there any administrative guidance or printed
information edited by the government or the
PPP Unit concerning the legal framework for
PPP projects in the country?
3. Is there a municipal/regional policy framework
(explicit or implicit) for PPPs in infrastructure
or public services?
The Ministry of Municipal Affairs has prepared
guidelines framework for PPPs in infrastructure in 2008
and is currently working on updating such guidelines.
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and
(ii) Cancelling EPC and transferring all its
obligations to the Ministry of Finance
other than those relating to PPPs that
shall be transferred to Jordan
Development and Investment Board.
However, since the EPC, Jordan Investment Board, the
Development Zone Commission and Jordan Enterprise
Development Corporations have all been established
pursuant to specific laws, and then such merger and
cancellation cannot be achieved unless a new law has
been enacted for that purpose. Up to our knowledge,
there has not been any new law that contemplates the
above-referred to reform. Therefore, the current
structure of the EPC remains unchanged.
EPC is currently working with consultants to target
national awareness and promotion on a small scale as it
is unclear whether the EPC will be cancelled or not.
However, in the event EPC becomes certain that such
reform will not take place, then it is planning to invest
in a large promotion and awareness campaign.
5. Are there PPP training programmes on a
national and/or municipal/regional level for
public servants and other PPP concerned
people?
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6. Are there PPP courses as part of university
curriculum or specialist departments and
faculties in universities teaching PPP?
Up to our knowledge the University of Jordan teaches
PPP as part of a Modern Public Management course.
We are not aware of any other university that teaches
PPP as part of its curriculum.
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7.3 Obstacle to implementation of PPP Policy
7. Are you of the opinion that there are no
social/political obstacles to implementing PPP
in the country (e.g. grass roots opposition,
policy measures against private sector
participation in public infrastructure/services,
etc.)?
XX
Jordan officially launched its PPP Program on June
23rd 2008, and assigned its implementation to EPC as
a way of continuation of its Privatization Program.
However, there are currently social and political
obstacles to implementing PPP. Some social and
political pressures claim the following:
(i) the agreements made pursuant to PL and PR alone
are unconstitutional as such agreements were not
ratified by a separate law pursuant to Article (117) of
the Constitution (please see question 1 of section 1.1);
(ii) PPP and the Law in its entirety are not for the
benefit of Jordan. Jordan through PPP or privatisation
regime is selling vital assets which should remain under
the direct control of the State; and
(iii) government should be directly in control of certain
sectors including education and health.
8. Are you of the opinion that there are no legal
obstacles to implementing PPP in the country
(e.g. non-publication of a decree provided under
the Law and necessary for such law to become
effective, etc.)?
We are of the opinion that there are, generally, no legal
obstacles in implementing PPP in Jordan. However, it
is not clear how the sector-specific laws interrelate
with the Law.
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For our general information, please describe the existing impediment and obstacles if any with respect to the two previous questions
The below illustrates the existing impediments and obstacles with respect to the two previous questions:
Concessions and article (117) of the Constitution:
1.1 The scope of Article (117) of the Constitution is wide and may be interpreted as having a general law ratifying a Concession agreement is
sufficient to meet the requirements stipulated thereunder. It can be interpreted to read that all concession agreements must be ratified by a
law and not necessarily ratified by a separate law for each and every Concession agreement.
1.2 We are of the opinion that the Privatization Law serves as a general law which ratifies the concession agreements generally and the
Concession Agreement particularly by authorising the privatization board (the “Board”), in Article 7(a)(4), to decide on matters relating to
the right of the private sector to administer and operate projects in the public sector subject to the approval of the Council of Ministers as
per Article 7(b). The agreements, made pursuant to the provisions of the Privatization Law, were in fact approved by the Board and further
approval by the Council of Ministers.
1.3 However, although we are of the opinion that any Concession agreement made pursuant to the Privatisation Law is constitutional, it may be
argued that the Privatization Law is insufficient for satisfying the requirement of ratification by law in Article (117) of the Constitution.
Article (117) may be interpreted to read that each and every concession must be ratified by a specific law pertaining to that particular
concession.
1.4 There are no precedents relating to the interpretation and application of Article (117) of the Constitution and the ambit of that provision
tends to be ambiguous and open for a wide range of interpretation, then the constitutionality, validity and enforceability of any Concession
made pursuant to the Privatisation Law is dependent on the interpretation of Article (117) of the Constitution. Such interpretation shall be
under the full discretion of the courts.
However, earlier in 2012, the Higher Council for the Interpretation of the Constitution deemed Article (66/a) of the Civil Aviation Law No
41 of 2007, which deems all agreements, previously executed, relating to investment, administration and maintenance of QAIA as if
executed in accordance with the Civil Aviation Law and deems such agreements binding upon the Civil Aviation Regulatory Commission,
a general law ratifying the Concession Agreement (PPP Agreement) for the expansion of Queen Alia International Airport. Therefore, we
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are of the opinion that this implies that there can be a general law rather than specific law for each and every transaction ratifying
Concession agreements pursuant to Article (117) of the Constitution.
PPP and the Privatisation Regime
1.5 After the Arab spring, the public have become more courageous to present their view with respect to many issues including, but not limited
to, their views on PPP and the privatisation regime. Recently there have been many riots and resistance to privatisation and PPP projects in
Jordan. Some of such riots claim that specific projects were awarded through corruption and others claim that the PPP and the privatisation
regime are enhancing, facilitating and aiding the government to sell vital assets owned by the State to the private sector, which in their
opinion should remain under the direct control of the government.
Health and Education Sectors
1.6 There is significant pressure on the government from the public that the educational and health sectors of Jordan should be under the direct
control of the State. Therefore, even through the laws do not specifically restrict ownership of such sectors by the private sector, the
government is not awarding any PPP or other forms of privatisation in such sectors.
The Law and sectorial laws
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1.7 Some sectorial laws including, but not limited to, the water, electricity and telecommunication include provisions which regulate or enble
the relevant authority to undergo and award PPP in those sectors. It is unclear how such laws interrelate with PL and PR or when do such
laws kick in as a basis for PPP rather than using the general rules set out in PL and PR.
8. INSTITUTIONAL FRAMEWORK
8.1 Existence and role of PPP Central Units/Agency
QUESTION
ANSWER
ARTICLE
COMMENTARY
1. Is there a specialised
institution/agency/ministerial department
established to promote PPP and to serve as
Central PPP Unit?
A number of specialist bodies exist in Jordan with a
strong role in the PPP process.
The Privatization Council is a high level body chaired
by the Prime Minister, set up initially as part of the
general privatization drive. It has an advisory role and
also approves proposals for PPP projects. Its
membership comprises the Minister of Finance, the
Minister of Industry and trade, the Minister of
Planning, the Minister of Justice, the Governor of the
Central Bank, the Chairman of the EPC, the relevant
minister to the project and four experienced specialists
appointed by the Council of Ministers.
The PPP Committee was established in September 2008
pursuant to a Council of Ministers decision. Its stated
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role is to identify projects suitable for PPPs and to
supervise feasibility studies. However, in practice it has
had limited involvement in PPP projects to date.
The EPC is a public body with financial and
administrative independence, but reporting directly to
the Prime Minister. It does not sit within any particular
ministry and has an independent budget approved by
the Privatization Council and by the Council of
Ministers.
The EPC has played a major role in projects that have
been procured through PPPs, either led by the EPC or
by the relevant ministries. In some cases, the EPC has
taken a more minor role, for example on the Queen Alia
International Airport (QAIA) project, where the
Ministry of Transport took the lead (with its advisers).
There are no criteria, which specify how the projects
are to be allocated to the EPC or the line ministry. The
EPC is a procurement vehicle, while the Projects
Administration (formerly, the Mega Projects
Administration) was introduced under the
organizational
structure of the Prime Ministry as a support to the line
ministries
in terms of coordination, follow-up, provision of
technical and
financial advice, and the packaging of mega projects.
Please note that although the Projects Administration
exists under the organizational structure of the Prime
Ministry, our understanding is that it is currently not
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carrying out its duties as many of its staff members
have left.
In 2010 and 2011, two GOJ decisions were passed
requiring EPC and PA to merge; however, the decision
has not yet been implemented. (please see our
comments to question 4 of section 7.2 for more detail
on the the GOJ decision of 2011),
The institutional framework for delivering PPP
projects in Jordan is in transition. The Draft PPP Law
prepared by EPC creates new organisations: PPP
Commission and the PPP Council – to replace those
currently responsible for PPP. However, the GOJ has
not yet endorsed any particular institutional
framework.
Sources: EIB report 2011
2. Is such Central PPP Unit composed mainly of
specialists recruited from the business
community and not exclusively composed of
civil servants coming from different public
ministries?
XXX
Please see question 1 of section 8.1 above.
3. Is the role of such Central PPP Unit comparable
to a "task force" assisting in the development of
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projects in general and not limited to promotion
of PPP?
4. Is the consent or recommendation of such
Central PPP Unit necessary for the development
and granting of most PPP projects (except small
or local PPP)?
In the event the Council of Ministers issues a decision
and selects EPC to lead the project, then the
recommendation of the Privatisation Council is
necessary for the development and granting of all PPP
projects made pursuant to PL and PR. However, if the
Council of Ministers selects the relevant line ministries
to lead the project, then the recommendation of the
Privatisation Council and the EPC is irrelevant and not
necessary.
5. Is one of the roles of the Central PPP Unit to
assist in building capacity namely of the public
sector with respect to PPP?
For our general information, please name such establishment and specify its place in public hierarchy, format and key functions
(regulatory, operational, know how collecting, etc. or a combination thereof).
EPC and the Privatisation Council are independent governmental bodies that report directly to the Council of Ministers.
EPC shall assume the following duties and responsibilities as expressed in Article (10) of the PL:
(i) Carrying out studies on restructuring and privatization transactions in coordination with the concerned bodies, and making
recommendations to the Privatization Council.
(ii) Following up the execution of restructuring and privatization transactions after the consent of the Council of Ministers on the
Privatization Council’s resolutions in this matter has been obtained.
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(iii) Any other responsibilities related to restructuring and privatization transactions assigned to it by the Privatization Council or by
the Council of Ministers.
The Privatization Council shall pursuant to Article (7) of the PL undertake the following:
(i) Laying down general policies for privatization.
(ii) Specifying the public institutions or public-sector projects it decides to be privatized, or restructured in preparation for
privatization, and adopting the appropriate implementation method to achieve this purpose.
(iii) Specifying companies in which the Government holds shares in order to privatize those shares pursuant to the legislations in force.
(iv) Approving decisions of sale, lease or transfer of rights of management and operation to the private sector taken in implementation
of privatization.
(v) Selecting qualified consulting firms to carry out the necessary studies on restructuring or privatization institutions or projects on
recommendation by the Chairman of EPC.
(vi) Recommending to the Council of Ministers to take the legal steps required for the establishment of an independent regulatory
commission to regulate one or more sectors in preparation for its/their privatization and to lay down principles for monitoring the
said sector(s) to ensure that the objectives of its/their privatization are achieved.
(vii) Issuing the instructions it deems necessary for the implementation of the provisions of the PL and the regulations issued pursuant
thereto based on recommendation by the Chairman of EPC.
Resolutions of the Privatization Council taken pursuant to sub-paragraphs (i-v) above shall be subject to the consent of the Council of Ministers.
8.2 Other institutions concerned by PPP
6. Is there any PPP unit/agency or department of
the Central PPP unit either at the municipal or
XXX
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regional level?
7. Is there any specific PPP unit department in any
ministry (other than the central PPP unit) or at
sectorial level?
XXX
8. Is there either a specific "one stop shop" for PPP
authorisations and formalities or a "one stop
shop" which services are available to the
sponsors of PPP project as well as other
investors?
XXX
9. Is the division of power between different public
authorities involved in the PPP granting process
simple and coordinated?
XXX
9. PPP LAW ENFORCEMENT
9.1 Effectiveness of PPP enforcement and compliance with the Law
QUESTION
ANSWER
ARTICLE
COMMENTARY
1. Have any PPP projects in any form ever been
awarded in the country on the basis of the Law
A number of large PPPs were
successfully signed over the past five
years. Examples include the AES Amman
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discussed above? (with or without specific
reference to the Law)
Jordan IPP (signed in March 2007), the Al
Qatrana IPP (signed in October 2009), the
new terminal for Amman Airport
(November 2007) and the Disi Water PPP
(June 2009). Total project funding for
these four projects amounted to $2.4
billion, with 30% made available by
sponsors in the form of project equity plus
significant support from Islamic
Development Bank, KEXIM, KfW, OPIC,
JBIC, and EIB in the case of Disi Water.
Jordan has attempted a number of PPPs
which were later withdrawn mainly due
to limited project preparation. For
instance, the Amman-Zarqa Light Railway
System project, a transport demand-based
BOT, was tendered three times without
success. This project was first approved in
2004 but the preferred bidder failed to
raise finance and procurement was
suspended in March 2009. In September
2009 IFC was appointed as consultant to
this project with the purpose to review,
assess and update the economic, technical,
legal and environmental studies that were
conducted previously for the project.
Following IFC’s conclusion of this
preparation stage, the project has been
recently put on hold for financing-specific
reasons.
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The Aqaba New Port Development, a $540
million project, was terminated in
November 2009 and procured
conventionally after the consortium
selected failed to agree terms with its
public sector counterpart, reflecting
limited project preparation. New projects
are now subject to greater pre-procurement
due diligence.
2. Have such PPP projects, if any, been awarded
generally following a transparent competitive
selection procedure (and only through direct
negotiation under exceptional legal
circumstances as may be provided by the Law)?
All PPP projects have been awarded
following a transparent competitive
procedure. No PPP projects were ever
awarded based on direct negotiations
3. Have any PPP projects or similar long term
agreements (falling under the definition of PPP
under this questionnaire) been awarded on any
legal basis different from the Law since the Law
has been in force?
For our general information, please give example of legal instruments, or reasons used, to bypass the Law and establish a PPP.
The Law is a general law, which governs PPP in Jordan and as stated herein, it is unclear how the Law interrelates with sectorial laws. Some
sectorial laws give the authority to the Council of Minister to approve PPP in certain sectors as well as enabling them to set the relevant
procedures for implementation of PPP including, inter alia, the tendering procedures without the need to comply with the Law, for an
example, the YWC Management Contract for provision of management of water and wastewater services to the Northern Governorates in
2011 in which the Water Authority was the procuring authority. In this project, the Water Authority and Council of Ministers relied on
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Article (28) of the Water Authority Law, which enabled the Council of Ministers to approve PPP and procure such projects without the need
to resort to the provisions of the Law. Please find below the translated text of the referred to Article (28)
“a- The Council of Ministers may, upon the Minister’s [Ministry of Water and Irrigation] recommendations, assign any of the
Authority’s [Water Authority] duties, or any of its projects or the execution of any of the projects’ stages, or any part thereof to any
other party whether public or private or to a public shareholding company or to a limited liability company that are wholly or
partially owned by the Authority, and this may include assigning the management of these projects or the lease thereof or
assignment of the title thereto to any of these parties upon the conditions and for the terms specified in the contracts to be executed
with such parties for the above purposes provided that the applicable legal rules pertaining to lease and assignment of title are
observed.
b- Where contracts for the assignment of the management of the projects or the lease thereof are being executed the Council of
Ministers’ resolution may include an authorisation to the contracting parties’ employees to assume the authorities of the Water
Authority’s employees in accordance with the enforceable legislation with respect to the execution of the said contracts.”
9.2 Statistics on PPP implementation under the Law
4. Have most of the awarded PPP projects been
successfully implemented and put into operation
in compliance with the Law?
5. Has a PPP project ever been awarded and
implemented in the country at the local /regional
/municipal level in compliance with the Law?
6. Have PPP project ever been awarded in the
country in the non merchant sector (such as
Hospital, School, prisons) and not exclusively
in the merchant sector (energy, water,
XXX
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transport)?
For our general information:
Approximately how many PPP projects are presently in operation (figure or order of magnitude)in the country and in what sectors have PPP
projects been awarded (energy, water, education, health for example)?
Kindly note that PPP projects in Jordan are implemented either through EPC or directly through other ministries such as MOT, MOW,
MEMR, MOMA.
EPC was involved in 2 projects that were awarded and in operation:
1. Expansion of Queen Alia International Airport
2. Assamra Water Treatment Plant.
It is very difficult to provide an exhaustive list of all PPP projects in Operation as there is no central database and EPC does not have this
information.
Please give some examples of the most significant project awarded:
a. Assamra Water Treatment Plant – BOT (in operation)
b. Expansion of Queen Alia International Airport – BOT (in operation)
c. Medical and Industrial Hazardous Waste Treatment Plant – BOOT (awarded)
d. Amman – Zarka Light Rail – BOT (procurement process)
f. Jordan National Railway System (procurement process)
g. Licenses for Oil Marketing Companies in Jordan. (Procurement process)
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Note: there are other PPP projects in Jordan especially in the Energy and Water sectors but EPC is not involved in them.
under which legal form have such PPP project s been awarded (Concession, BOT, PFI, other):
Please see response above.
have such PPP project been granted by (i) central, (ii) sub-sovereign/regional (if applicable) or (iii) municipal government as Contracting
Authority;
The Contracting Authority is the relevant ministry.
when did PPP begin to be awarded in the country: (i) in the last 10 years or before; (ii) in the last 5 years; or (iii) within the past few years
only; and
In the last ten years.
please give examples of any PPP projects awarded but not implemented (or not implemented under a PPP form)
All the awarded PPP projects that EPC was involved in were implemented under a PPP form.
.are there any PPP/Project Agreements in discussion?
The following list includes some potential PPP projects that are still under discussion:
a. National Broadband Network.
b. E-Government.
c. New Slaughterhouse.
d. Amusement Park.
e. Horticultural Packing Centre.
f. Al Bashir Hospital Parking
g. Al Eman Hospital Reconstruction
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h. Solid Waste Management in GAM
i. Rehabilitation of Warehouses for Amman Customs Centre
9.3 Challenge of PPP
7. Are you of the opinion that there is a reasonable
chance for an unsuccessful bidder to
successfully challenge in the country a PPP
awarded under conditions contrary to the Law?
8. If the answer to the previous question is Yes, are
you of the opinion that there is a reasonable
chance for the plaintiff to get some
compensation or for such action to result in the
cancellation of the award?
It may be possible for the courts to award the
cancellation of the PPP award. However, kindly note
that in any situation if the Claimant seeks relief from
the court and it is able to prove the damage, loss or
injury, then the courts may only award compensation
for actual damages, which do not include loss of profit
or loss of business opportunity.
9. Have PPP project been implemented by the
parties most generally without serious
claims/arbitration by either Party concerning the
performance of the Project Agreements under
the Law?
Up to our knowledge yes.
10. If any Project Agreement has been terminated
prior to the end of the contractual period by the
Contracting Authority, has fair compensation
been paid to the Private Party in compliance
N/A
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with the Law?
For our general information, can you provide any examples of a successful legal challenge in the courts or otherwise of a PPP award in
the country based on the PPP Law? Please describe the matter and, if known, the outcome of such matter.
N/A