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OVERALL 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

14/18

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

16/24

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.

35/45

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).

16/30

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.

4/18

1 UNCITRAL Legislative Guide on Privately Financed Infrastructure Projects, 2001 (hereinafter the "PFI Guide")

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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

General LFA Rating 64,2% 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 7/24

8 Institutional Framework Existence of an institutional framework for public private partnerships 9/27

9- PPP Law Enforcement Award and implementation of PPP projects in compliance with the Law 20/27

General LIS Rating 45,3% Low Compliance/ Effectiveness

OVERALL RATING 54,8% Medium Compliance/ Effectiveness

Local Expert2: Gide Loyrette Nouel (Bucharest)

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 the country but the Local Experts as well as EBRD are in no way responsible for the responses given to any question in this Checlist as the Consultant was free to

use any other sources of information for its final determination.

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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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2011 OVERALL ASSESMENT ROMANIA

Romanian Law has undergone important changes at the end of 2010 further to the enactment of a new legal framework dedicated to PPPs, comprising the PPP

Act No. 178/2010 (the "PPP Act 178/2010") and the Government Decision No. 1239/2010 approving the Norms for the implementation of the PPP Act No.

178/2010, as well as certain measures for the reorganisation of the Central Unit for the Coordination of Public-Private Partnership within the Ministry of

Public Finances (the "PPP Norms").Please note that important amendments have been brought to the PPP Act 178/2010 as of 17 October 2011, further to the

enactment of Government Emergency Ordinance No. 86/2011, and to the PPP Norms as of 20 October 2011, further to the enactment of Government Decision

No. 1000/2011.

The amendments brought to the PPP legal framework in October 2011 purport at rendering the procedures for the award of a PPP contract

compliant with the European Union Directives on public procurement.

Among the important amendments to the PPP regulations, the following should be noted:

- contracts awarded for the purposes of carrying out relevant activities in public utility sectors: gas, heat and electricity, water, transport, postal

services, exploration and extraction of oil, gas, coal and other solid fuels, ports and airports are expressly included among the PPP contracts;

- detailed provisions on the qualification and selection criteria;

- provisions on subcontracting: right for Contracting Authorities to ask potential investors, without prejudice to the question of the private

investor's liability, to indicate in the offer any share of the contract they intend to subcontract to third parties, as well as any proposed

subcontractors; contracts entered into with the subcontractors indicated in the offer must be submitted to the Contracting Authority upon

execution of the PPP contract and attached thereto; the replacement of subcontractors throughout the performance of the PPP contract is

allowed only subject to the approval of the Contracting Authority and to such replacement not resulting in any modification of the initial

technical or financial offer;

- possibility of submitting variants (alternative offers) if expressly allowed in the contract notice;

- detailed provisions on technical specifications including: definitions of certain technical specifications, rules to be complied with by

Contracting Authorities when establishing technical specifications;

- the price of the PPP contract may be modified throughout the performance of the contract only in limitative circumstances expressly

provided by the PPP Norms;

- detailed rules on the publishing and content of notices of award of PPP agreements;

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- the possibility for the public partner to resort to a negotiated procedure without having published a contract notice only in exceptional

circumstances;

- enhancement of the role of the Central Unit for the Coordination of Public Private Partnership."

-

Romania had benefited from a PPP Act which was repealed in 2006 by Government Emergency Ordinance No. 34/2006 implementing the

European acquis (i.e. Directives 2004/17/EC, 2004/18/EC, 89/665/EEC and 92/13/EEC). Concessions, regulated as contractual PPPs, thus

became the only form of partnership between public authorities and private operators that benefited from a dedicated legal framework.

This approach did not have the results expected, as a limited number of Concessions of works and services have been granted under GEO

34/2006.

In this context, the enactment of a new legal framework dedicated exclusively to institutionalised PPPs was deemed necessary in 2010 as a

possible solution for attracting private funding in the public sector.

The new PPP Act did not repeal or amend the pieces of legislation regulating Concessions enacted in 2006. As a result, Romanian Law currently

includes the following main sets of rules:

- Public-Private Partnerships implemented as IPPPs governed by the PPP Act 178/2010 and the PPP Norms; and

- Concessions of works and services governed by GEO 34/2006 and the relevant Norms for the implementation thereof. Concessions of assets that are

public property are governed by GEO 54/2006 and the Norms of implementation thereof.

It is worth mentioning that the legal texts currently in force are the result of several amendments.

Thus, the initial version of the PPP Act 178/2010 raised serious doubts as to its compliance with the European Union rules and principles, triggering the risk

of infringement procedures being started by the European Commission against Romania. Major amendments have therefore been brought to the PPP

legislation in order to render it compliant with the EU legal framework and to enable its implementation.

Although these amendments have better defined the scope of the regulation and have considerably detailed the award procedures, the current Romanian legal

framework still lacks a certain degree of clarity, in particular as regards the line between PPPs and Concessions, which makes it difficult to determine whether

a particular project will be governed by one or the other set of rules.

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Further difficulties might result from the fact that recent amendments to the PPP Act 178/2010 have included within its scope of application relevant activities

that also benefit from sector-specific regulations, among which gas, energy, water, post. The Law is not very clear as to when the general regulation on PPPs

and when the sector-specific regulations are applicable.

In any case, the current legal framework on PPPs is broad enough to allow the implementation of different types of Public-Private Partnerships,

such as Concessions, PFIs, BOTs and its respective forms, in both merchant sectors of the economy and in sectors related to the provision of

Government service.

The PPP Law provides criteria for identifying the entities having the capacity to act as Contracting Authorities, while both Romanian and foreign

investors may have the capacity to act as Private Parties under the PPP legal framework, without discrimination.

Selection procedures, governed by basic principles among which transparency, non-discrimination, equal treatment, proportionality are detailed

by the relevant regulations, providing for obligations of Contracting Authorities among which: publishing notices in respect of the award

procedure, applying the same criteria made public through the contract notice and the relevant documents to all the candidates/bidders, keeping a

record of the key stages and information regarding the award procedure.

PPP agreements may be awarded without a competitive procedure only in limited circumstances.

There is no standard Project Agreement to be complied with; the Law sets forth lists of clauses to be included in the Project Agreement but the

content thereof is to be determined in each case based on the requirements of the Contracting Authority and the offer submitted by the Private

Party.

The Law also provides for the right of the Private Party or the IPPP to collect tariffs or fees for the use of facilities or provision of services. Availability

payments are also allowed under the Romanian legislation.

Review procedures are provided by the Law granting private investors the possibility to challenge a decision or a failure to act by a Contracting Authority, as

well as to obtain appropriate compensation for the damages incurred. The Norms on Concessions expressly refer to the possibility of resorting to arbitration

for settling a dispute related to a Concession Agreement.

The Law includes very few indications as far as financial and security issues are concerned, it does not provide for step-in rights in favour of lenders or for

Government financial support or guarantee for PPP projects.

As regards the implementation of the legal framework, official statements of members of the Romanian Government have repeatedly emphasised the

importance of PPPs.

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Strategies involving the partnership between the public sector and the private sector have been enacted in several sectors among which energy, infrastructure

and municipal services. Furthermore, in April 2011, the Romanian Government has announced a list of 17 projects to be carried out on a PPP basis under the

PPP Act 178/2010 in sectors among which: infrastructure, energy, health, housing, prisons.

Entities acting as Central PPP Units have been set up with key functions of promoting PPPs and providing counsel and guidance to both Contracting

Authorities and private investors, especially the newly reorganized Central Unit for Coordinating Public Private Partnership.

However, as a general remark, the Romanian experience in implementing successful PPPs is very limited.

Thus, to this day, the Electronic Public Procurement System (SEAP) has published a number of 194 notices for the award of Concessions of

works and services, the vast majority thereof being awarded by local and county authorities in the field of municipal services. Nevertheless, in

absence of official statistics, it is difficult to assess how many of them have been implemented successfully.

No award procedure has been started yet under the PPP Act 178/2010.

Among possible obstacles, we could note: insufficient training of civil servants, insufficient awareness as regards the PPPs, lack of clarity of the legal

framework, no clear lenders' rights.

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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?

Romanian legal framework includes several pieces of

legislation regulating different types of long-term

arrangements between public authorities and private

entities.

Thus, Public-Private Partnerships established as IPPPs are

regulated by recently enacted pieces of legislation: the PPP

Act No. 178/2010 (the "PPP Act 178/2010") and the Norms

for the implementation thereof approved by Government

Decision No. 1239/2010 (the "PPP Norms").

The concept of Concessions under Romanian law is

regulated under two Government Emergency Ordinances

enacted in 2006 with the purpose of implementing the

relevant EU regulations, as follows:

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- concessions of works and services are governed by

Chapter VII of Government Emergency Ordinance No. 34/2006 on the

award of public procurement contracts, of public works concession

contracts and services concession contracts (the "GEO 34/2006") and the

Norms for the implementation thereof approved by Government Decision

no. 71/2007 (the "Concession Norms");

- concessions of assets that are public property are

governed by Government Emergency Ordinance No. 54/2006 on the legal

regime of concession contracts for assets that are public property (the

"GEO 54/2006") and the Norms for the implementation thereof approved

by Government Decision No. 168/2007.

Furthermore, the Local Public Administration Act No.

215/2001 provides for the possibility for county/local

public authorities to associate with private partners, under

the terms and conditions provided by the law, for the

purposes of financing and carrying out activities, works,

services and projects of county/local interest. No further

details are provided regarding the procedure to be complied

with for selecting the Private Party.

As a general remark on the Romanian legal framework,

although recent amendments to the PPP Act 178/2010 and

the PPP Norms have provided further details as regards the

scope of these regulations and have clarified to a certain

extent the procedures to be complied with for the award of

a PPP contract, the line between the scope of the different

regulations is not very clearly drawn in all cases. A specific

project may qualify either as a PPP or as a Concession and

there are no clear guidelines on the choice among the set of

rules that should be complied with.

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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?

Despite the absence of express references thereto in the

relevant pieces of legislation, BOTs and derived forms

thereof may be implemented within the framework of

Public-Private Partnerships.

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?

Despite the absence of express references thereto in the

relevant pieces of legislation, PFIs may be implemented

within the framework of Public-Private Partnerships.

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, sectoral 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?

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We are not aware of any amendment to existing regulations being prepared or of any new regulation being proposed as regards PPPs in

Romania. Please note that important amendments have been brought to the PPP Act 178/2010 as of 17 October 2011, further to the

enactment of Government Emergency Ordinance No. 86/2011, and to the PPP Norms as of 20 October 2011, further to the enactment of

Government Decision No. 1000/2011.

1.2 Specificity and integration of PPP the 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 Romanian Public Procurement Law is represented

by the chapters dedicated to the procurement of

goods/works/services included in GEO 34/2006

(implementing the European Directives 2004/17/EC

and 2004/18/EC) and the relevant norms for the

implementation thereof.

The Romanian Public Procurement Law includes

provisions indicating which texts of the Public

Procurement Law also apply to the granting of

Concessions.

6. If the country has sectoral laws regulating PPP

in specific sectors, is it clear which law is

applicable to the granting of PPP for each

particular sector?

In addition to the above-mentioned general texts, the

Romanian legal framework also includes numerous

sector-specific texts providing for the option of using

PPPs for carrying out a public service; some of these

regulations also provide for specific rules for the award

of the PPP.

Romanian law allows special norms derogating from

general norms. However, general principles should be

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complied with and both the general and the specific

regulation should be clear enough as regards their

respective scopes in order to avoid the risk of

overlapping and confusion.

Among the sectors where specific pieces of legislation

provide for PPPs, we note the following:

oil: Oil Act No. 238/2004 and the Norms on the

implementation thereof approved by Government

Decision No. 2075/2004;

mining: Mining Act No. 85/2003 and the Norms on

the implementation thereof approved by

Government Decision No. 1208/2003;

electricity: Electricity Act No. 13/2007;

natural gas: Gas Act No. 351/2004;

municipal services: a framework regulation: the

Municipal Services Act No. 51/2006 and relevant

regulations for each category of municipal services

governed thereby:

- Act No. 325/2006 on the organisation and

functioning of the public services of thermal energy

supply;

- Act No. 101/2006 on sanitation services;

- Act No. 241/2006 on the organisation and

functioning of the public services of water supply

and sewage;

- Act No. 230/2006 on public lighting services;

- Act No. 92/2007 on local public transportation

services;

- Government Ordinance No. 71/2002 regarding the

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organisation and operation of public services of

management of the local public and private domain.

The Law is not clear as to when the general regulation

and when the sector-specific regulations are applicable.

7. Does the country have a Law allowing the

Institutional form of PPP (IPPP) which

regulates IPPP participation to PPP?

PPP Norms

Art.1 (2)

Concession

Norms

Art 16

Under the PPP Act 178/2010 Public-Private

Partnerships may be implemented only by setting-up an

IPPP whose purpose is to carry out the Public-Private

Partnership Project.

The Contracting Authority and the Private Party may

set up an IPPP in view of carrying out a Concession.

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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.

PPP Act

178/2010

Art. 4, d),

g), t), ţ), u)

Various types of arrangements are defined by the Law.

However, the limits of application of the Law cannot be

clearly determined.

A. Public Private- Partnership

A public-private project is the project that is fully or

partially completed with the financial resources of an

investor or with financial resources obtained by the

investor (i.e. the Private Party), based on a public-

private partnership model, from which a public asset or

service results;

A Public-Private Partnership agreement or project

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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agreement is the legal document that stipulates the

rights and obligations of the public partner (i.e. the

Contracting Authority) and of the private partner (i.e.

the Private Party), throughout the entire duration of the

Public-Private Partnership, covering one or several

stages of the Public-Private Partnership project, for a

definite term;

PPP Act 178/2010 also defines each type of Public-

Private Partnership agreement, as follows:

- PPP works agreements are partnership agreements

concerning either: (i) only the performance or the design and the

performance of works related to one of the activities listed in

Appendix 1 of GEO 34/2006 or (ii) the carrying out, through any

means, of works meeting the requirements indicated by the

Contracting Authority in the contract notice or in the accompanying

document thereof. "Works" are defined as the result of construction

works or public works, meant to fulfil itself an economic or technical

function.

- PPP goods agreements are partnership agreements,

other than PPP works agreements (as defined above) concerning the

supply of goods corresponding to the necessities specified by the

Contracting Authority in the contract notice and in the accompanying

document thereof. A PPP agreement concerning the supply of goods

and that, in addition, covers the installation works, is considered to be

a PPP goods agreement.

- PPP services agreements are partnership

agreements, other than PPP works agreements and PPP goods

agreements (as defined above) concerning the provision of services

listed in Appendix 2 of GEO 34/2006. A PPP agreement concerning

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GEO

34/2006

Art. 3, g), h)

Concession

Norms

Art. 3

both goods and services listed in Appendix 2 of GEO 34/2006 will

qualify as a PPP services agreement inasmuch as the value of the

services concerned exceeds the value of the goods. A PPP agreement

concerning services listed in Appendix 2 of GEO 34/2006 and, only

incidentally, activities listed in Appendix 1 to GEO 34/2006 will be

qualified as a PPP services agreement depending of the main object

thereof.

B. Concessions

The Law does not include a definition of Concession, as

such, but it defines concession agreements.

Agreements for concession of public works and services

are defined by reference to public works or services

agreements. Thus, Concession agreements have the

same characteristics as the corresponding public

procurement agreements, the difference consisting in

the fact that, as regards concession agreements, the

consideration for works performed or services rendered

by the concessionaire consists either solely of the right

to operate the construction/services (thus the Private

Party undertaking the most important part of the risks

related to the performance and operation thereof), or in

that right together with payment of a predetermined

amount by the Contracting Authority.

Under GEO 54/2006, a Concession agreement is the

agreement concluded in written form whereby a

Contracting Authority, acting as conceding authority,

transfers, for a limited period of time, to a Private Party,

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GEO

54/2006

Art 1 (2)

acting as concessionaire, acting on its own risk and

responsibility, the right and obligation to operate a

public property asset in return for the payment of a

royalty.

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.)?

PPP Act

178/2010

Art. 10-12

GEO

34/2006

Art. 220

Yes, subject to the exceptions explicitly provided in the

relevant regulations, where they are not applicable.

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)?

The Law does not include express provisions in this

respect. Nevertheless, a distinction between the

authorisation to operate granted by a relevant regulatory

authority by issuing a licence and the authorisation to

perform a public service granted by a Contracting

Authority by entering into a PPP agreement can be

inferred further to the analysis of the legal provisions in

force. In any case, both are required for a Private Party

to duly perform a public service within the framework

of a PPP in a regulated sector.

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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 ?

PPP Act

178/2010

Art. 4, j),

Art. 7, Art.

8

GEO

34/2006

Art. 8

The following entities may act as Contracting

Authorities to implement Public- Private Partnerships,

either as PPPs under PPP Act 178/2010 or as

Concessions:

any State body, public authority or institution,

acting at a central, regional or local level;

any body, other than those indicated above,

having legal personality, which was set-up in

view of satisfying general interest needs without

a commercial or industrial nature and that is

financed mostly by a public entity (i.e.: a State

body, public authority or institution, acting at a

central, regional or local level) or by a body

governed by the public law;

any body, other than those indicated above,

having legal personality, which was set-up in

view of satisfying general interest needs without

a commercial or industrial nature and that is

either subordinated to or subject to the control

(for Concessions) or subject to supervision or

management (for PPPs) of a public entity (i.e.: a

State body, public authority or institution, acting

at a central, regional or local level) or another

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body governed by public law;

any body, other than those indicated above,

having legal personality, which was set-up in

view of satisfying general interest needs without

a commercial or industrial nature and whose

board of directors/management or supervisory

body comprises more than half of its members,

appointed by a public entity (i.e.: a State body,

public authority or institution, acting at a

central, regional or local level) or by another

body governed by public law;

any association formed of entities falling under

the scope of the above mentioned categories.

In addition to the above, the following entities may

equally act as Contracting Authorities under the PPP

Act 178/2010:

- any association formed of one or more entities

qualifying as Contracting Authorities as defined

above, on the one hand, and authorities, public

institutions and public companies of Member

States of the European Union, irrespective of

their activity, on the other hand;

- any public company operating one of the

activities mentioned under Art. 52-5

6 of PPP

Act 178/2010 (i.e.: relevant activities), on

which an entity qualifying as Contracting

Authority as defined above has, either directly

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or indirectly, a dominant influence, as a result

of a property right, a financial participation or

of norms governing it. The dominant influence

is presumed when the entity qualifying as a

Contracting Authority as defined above, either

directly or indirectly:

- owns the majority of the company's

subscribed share capital; or

- controls the majority of the votes

associated to shares issued by the

company; or

- can nominate more than half of the

members of the

administrative/management/supervisory

body.

- any legal entities that do not qualify as

Contracting Authorities as defined above, as

defined above, but carry out, as one of their

activities, one or several activity(s) defined under

Art. 52-5

6 of PPP Act 178/2010 (i.e.: relevant

activities) or any combination thereof and benefit

from special or exclusive rights granted by a

relevant authority; special or exclusive rights are

defined as rights granted by a relevant authority

of a Member State by means of a

legal/regulatory/administrative provision having

as effect the limitation of the carrying out of

activities defined under Art. 52-5

6 of PPP Act

178/2010 (i.e.: relevant activities) to one or

several entities and which affect in a substantial

manner the capacity of other entities to perform

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GEO

54/2006

Art. 5

such activity.

Under GEO 54/2006, the following entities may act as

Contracting Authority, on behalf of the State, the

county or the municipality: (i) Ministries or other

specialised bodies of the central public administration

for assets that are public property of the State; and (ii)

county councils, local councils, public institutions of

local interest for assets that are public property of the

county or the municipality.

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?

Public authorities at all levels (State level, county level, municipality level) may act as Contracting Authorities under Romanian law. Further,

State owned companies may equally qualify as Contracting Authorities, inasmuch as they fall under one of the categories indicated above.

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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)?

PPP Law

178/2011

Art. 31, 3² 4,

e)

Concession

Norms

Art. 6(2)

GEO

54/2006

Art. 6

PPPs may be awarded to foreign companies, or to

domestic companies with foreign participation in the

share capital and/or management thereof.

The Law does not include restrictions in this respect.

On the contrary, non-discrimination of private

investors, regardless of their nationality or citizenship,

is one of the basic principles of the award of PPPs and

the Law expressly provides that both Romanian and

foreign legal persons or associations may act as a

Private Party.

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?

According to the Law, in principle, PPPs may be awarded to both public entities and IPPPs formed of a private partner and a public partner.

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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?

PPP Act

178/2010

Art. 2, 41

5²

-56

GEO

34/2006

Appendix 1,

2A and 2B

Under Romanian law PPPs may be granted in a large

number of sectors.

The sectors where PPPs may be granted are defined by

reference to the lists of works and services included in

Appendix 1, 2A and 2B to GEO 34/2006 implementing

the EU Directives on public procurement.

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”?

It can be argued that a wide variety of sectors may be

eligible for PPPs.

4 For further information on the concerned sectors please refer to:PFI Guide, Consolidated Legislative Recommendations, Recommendation 3 and 4.

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8. Do the sectors eligible for PPP includes non

commercial activities such as the provision of

government services (such as schools, hospitals,

prisons, defence and housing) in addition to the

merchant sectors of the economy (energy,

transport, water, oil and gas).

The sectors where PPPs may be carried out includes

both non commercial sectors and merchant sectors of

the economy.

Moreover, education, health and social services are

expressly listed in Appendix 2B of GEO 34/2006.

For our general information: Please indicate the restrictions if any imposed by the Law on the sectors eligible for PPP:

The Law does not impose specific restrictions, but provides that it does not apply to the following:

- agreements concerning the acquisition or lease of land, buildings, other immovable assets or rights thereon;

- agreements concerning the acquisition, development, production or coproduction of programs to be broadcasted by

radio or television;

- agreements concerning arbitration and conciliation services;

- agreements concerning financial services related to the issuance, the acquisition, the selling, the transfer of securities

or other financial instruments or to the provision by the National Bank of Romania of services specific to a central

bank;

- employment agreements;

- agreements concerning the provision of research-development services, other than those exclusively for the benefit of

a Contracting Authority, provided that the service rendered is fully paid by the Contracting Authority;

- agreements in the fields of defence and security governed by Directive 2009/81/EC;

- agreements further to the execution of which the Contracting Authority may make available or operate public

telecommunication networks or may provide the public with one or several telecommunication services;

- agreements that have been declared secret by the relevant authorities;

- where the protection of essential State interests requires it;

- where the performance of the agreement requires imposing special safety and national security measures;

- agreements executed further to an international convention concerning the stationing of troops and only if a specific

procedure was mentioned in such international convention;

- agreements executed further to an international convention entered into according to the provisions of the EU Treaty

with one or several States that are not members of the EU concerning the provision of goods or performance of works

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in view of implementing or operating a joint project and only if a specific procedure was mentioned in such

international convention;

- agreements awarded further to a specific procedure of an international organisation.

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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?

PPP Act

178/2010

Art. 4

letters r)

and s)

Art. 14 (1)

letter b)

Art. 18(1)

GEO

34/2006

Art. 2181

Concession

Norms

Art.26

The Law provides for competitive tender procedures for

the award of PPPs.

Under the PPP Act 178/2010, in principle, a

Contracting Authority is entitled to use either an open

procedure or a competitive dialogue procedure for the

purposes of selecting the Private Party.

Concessions of public works and services may be

awarded by a Contracting Authority by using one of the

following award procedures: open tender, restricted

tender or competitive dialogue.

As a general rule, Concession over an asset that is

public property is to be granted further to a tender

procedure.

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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GEO

54/2006

Art. 14

2. Is there reference in the Law to the principles of

transparency, equal treatment and

proportionality?

PPP Act

178/2010

Art. 3

GEO

34/2006

Art. 217,

Art. 2 (2)

GEO

54/2006

Art. 13

Yes, non-discrimination, equal treatment, transparency

and proportionality are expressly indicated in the Law

as the basic principles that must be complied with for

the award of PPPs.

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)?

In view of ensuring the transparency of the award

procedures, the Law provides for the obligation of

Contracting Authorities to publish notices regarding the

competitive procedures for the award of PPP, and

indicates the information to be included in such notices.

Such notices must be published in the Electronic

System of Public Procurement (SEAP), which is a

public utility electronic system available online and,

where certain thresholds are met, in the Official Journal

of the European Union, as well.

For PPPs governed by the PPP Act 178/2010, SEAP

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GEO

34/2006

Art. 21, Art.

222, 223

Concession

Norms Art.

19-25

PPP Act

178/2010

Art. 24

PPP Norms

Art. 40, 41

should provide Contracting Authorities with a new

specialized information flow. Such new specialized

information flow has not yet been implemented and we

are not aware of the progress of such implementation.

If the value of the PPP project exceeds the thresholds

below, the contract notice should be published in the

Official Journal of the European Union, as well.

Contract notices regarding Concessions of works of a

Type of

contract

Thresholds6

(VAT excluded)

Publication

Goods

and

services

≤ 125.000 Euro SEAP

> 125.000 Euro SEAP and

OJEU

Works ≤ 4.845.000 Euro SEAP

> 4.845.000 Euro SEAP and

OJEU

6 Equivalent in RON;

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GEO

54/2006

Art. 21

value exceeding the equivalent in RON of EUR

4,845,000 must also be published in the Official Journal

of the European Union.

Finally, GEO 54/2006 provides that contract notices

must be published in the Official Gazette, in a national

newspaper and in a local newspaper.

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)?

The Law regulates in detail the selection of the Private

Party.

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)?

PPP Act

178/2010

Art. 18 (2)

letter k), (7)

letter r)

GEO

34/2006

Art. 207 (2),

(a), (b)

Concession

Norms

Art. 46

GEO

54/2006

Art. 41

The Contracting Authority is under a legal obligation to

send a letter indicating the reasons of its decision to

disqualified bidders / rejected applicants.

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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?

PPP Act

178/2010

Art. 3 letter

(b), 4 letter

(m)

GD

71/2007,

Art. 17, 18

GEO

54/2006

Art. 37

Proposals submitted by all the candidates/bidders must

be assessed by using the same criteria set out in the pre-

selection documents/request for proposals.

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?

PPP Act

178/2010

Art. 18(2)

(k1), 18(7)

(r1), 24(2),

(3)

PPP Norms

Art. 54 28

(8)

The Law provides for the obligation of Contracting

Authorities to publish notices of award of a PPP project

and indicates the information to be included in such

notices.

Such notices must include information on the selected

Private Party and basic information on the PPP

agreement, including the value thereof and a brief

description of the works/services/products subject of

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Concession

Norms

Art. 56

the agreement, and where applicable, the royalty to be

received by the Contracting Authority or the financial

contribution to be paid by the Contracting Authority.

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?

PPP Act

178/2010

Art. 204

GEO

34/2006

Art. 213,

214

GEO

54/2006

Art. 60

The PPP Act 178/2010 provides for the obligation of

Contracting Authorities to prepare, for each PPP

agreement awarded, a Minutes including the following

information: name and address of the Contracting

Authority, object and value of the PPP contract; names

of the private investors selected and the reasons for the

decision; names of the private investors rejected and

reasons for the decision, reasons for the rejection of

offers considered abnormally low; name of the winning

party and reasons for the selection of its offer, as well

as (if applicable) the part of the contract to be

subcontracted to third parties; for competitive dialogue

procedures, circumstances justifying the choice of the

procedure in question; and, if applicable, the reasons

for which the Contracting Authority has decided not to

award the PPP.

As regards the award of Concessions, Contracting

Authorities are under an obligation to prepare, for each

award procedure, the file of the award procedure

including information and documents among which: the

contract notice, the request for proposals, the requests

for clarifications and clarifications issued by the

Contracting Authority, the report of the award

procedure (including essential terms such as: name and

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address of the Contracting Authority, object of the

Project Agreement, name of the candidate(s)/bidder(s)-

selected and rejected, as well as reasons for the

decision, name(s) of the winning bidders, the part of the

contract to be subcontracted, as well as the name(s) of

the subcontractor(s)), the signed version of the Project

Agreement etc.

GEO 54/2006 also provides for the obligation of a

Contracting Authority to set up a file of the award

procedure including: the notices published, the

decisions approving the concession, the request for

proposals, information on the concessionaire, the

signed version of the Project Agreement.

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?

GEO

34/2006

Art.215

GEO

54/2006

Art. 63

The Public Procurement Law and GEO 54/2006

expressly provide that the procurement file is a public

document and it should be accessible to the public

under the conditions provided for under the specific

regulations on the free access to public interest

information.

GEO 34/2006 does not include express provisions as

regards Concessions.

The PPP Act 178/2010 does not include provisions on

public access to the Minutes to be prepared by the

Contracting Authority.

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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?

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?

PPP Act

178/2010

Art. 18 (17)

Such authority of the Contracting Authority is provided

by the PPP Act 178/2010 only for the cases where the

Private Party is selected through a competitive dialogue

procedure.

In such cases, if negotiations with the bidder who

ranked first cannot lead to the execution of the Project

Agreement, the Contracting Authority will start

negotiating with the private investors ranked on the

following positions until a favourable result is obtained.

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3.4 PPP Award without competitive procedure

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?

PPP Act

178/2010

Art. 18 (24)

GEO 34/2006

Art. 2181

Concession

Norms

Art. 27

GEO 54/2006

Art. 26-31, 59

The Law provides for limited circumstances where a

Contracting Authority is entitled to award a PPP

without a competitive process.

Under the PPP Act 178/2010, a Contracting Authority

is entitled to resort to a negotiation procedure without

prior publication of a notice in exceptional

circumstances where the conditions below are met:

- additional works or services not indicated in

the initially estimated project or in the initial

PPP agreement have become necessary for the

carrying out of works or services further to

unforeseen circumstances;

- the agreement is awarded to the Private Party

that has been awarded the initial agreement;

- the additional works/services cannot be

separated from a technical or economic point

of view from the initial agreement without

causing a major inconvenient for the

Contracting Authority or, even if they could

be separated, the additional works/services are

strictly necessary for the completion of the

PPP project;

- the aggregate value of agreements awarded

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for additional works/services must not exceed

50% of the value of the initial agreement.

As regards Concessions, a Contracting Authority is

entitled to use the award procedure of negotiation

with prior publication of a notice in one of the

following circumstances:

- if, further to using either open or restricted

tender or competitive dialogue, no offers are

submitted or all the offers submitted are

noncompliant;

- in exceptional circumstances, well-grounded,

where the nature of the works or services or

the risks involved in the performance thereof

do not allow an initial estimation of the

aggregate price of the agreement to be entered

into;

- if the services (such as financial services or

design of works) are such as not to allow the

terms of reference to be drafted with the

accuracy required for the award of a contract

by tender;

- if the works to be carried out are necessary

exclusively for purposes of scientific research,

experiments or technological development

and only if they are not carried out in view of

obtaining a profit and do not purport to cover

related costs.

GEO 54/2006 provides that a Concession may be

awarded further to direct negotiations in the following

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circumstances: if three valid offers have not been

submitted, the Contracting Authority must launch a

new tender. If the minimum number of valid offers

has not been submitted at the second call for tender,

the Contracting Authority can proceed with direct

negotiations, which means that the Contracting

Authority negotiates the clauses of the agreement,

including the royalty payment, with one or more of

the participants in the procedure for the award of the

concession agreement.

Another specific exception is provided under GEO

54/2006: assets that are public property may be

granted in Concession directly, to national companies

or companies subordinated to, under the authority or

the coordination, of a Contracting Authority under

GEO 54/2006, that have been set-up further to

reorganisation of public companies (regii autonome)

having as main purpose of business the management,

maintenance, repair and development of such assets,

until the completion of privatisation of such

companies.

13. Does the Law provide for a procedure, set of

rules or principles to be respected when

awarding a PPP without a competitive process?

GEO 34/2006

Art. 111-121

PPP Act 178/2010 does not provide for any set of

rules or principles to be complied with by a

Contracting Authority, when resorting to negotiation

without prior publication of notice.

Regulations on Concessions provide for rules to be

complied with, among which: obligation to publish a

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For our general information, please specify the conditions which would allow such direct negotiations?

The circumstances allowing such direct negotiations are indicated in our answer to Question 12 above.

3.5 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?

GEO

54/2006

Art. 9

Certain rules are provided only in GEO 54/2006.

GEO 54/2006 provides that the award procedure in

view of granting a Concession may be started further to

the Contracting Authority accepting a proposal of an

interested party regarding the concession of an asset

that is public property. Such proposal must be well-

grounded from an economic, financial, social and

environmental standpoint must include the coordinates

of the interested investor, the firm and serious

indication of the intention of concession, the object of

concession, the business plan. GEO 54/2006 provides

that, within 30 days as of accepting an unsolicited

proposal, the Contracting Authority must prepare the

opportunity study in view of launching the award

procedure.

notice, obligation to assess offers based on the

evaluation criteria established by the Contracting

Authority.

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3.6 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?

PPP Act

178/2010

Art. 28(1)

GEO

34/2006

Art.255(1)

GEO

54/2006

Art. 66

The Law provides for review procedures in respect of the

Contracting Authority’s actions or failure to act.

4. PROJECT AGREEMENT7

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

Romanian Law on PPPs provides for lists of mandatory

material provisions which must be included in the PPP

7 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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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)?

agreement; the content of such provisions is left for

negotiation.

The implementation Norms of GEO 54/2006 include a

template agreement for Concession of assets that are

public property, which is a model agreement, for

guidance only.

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?

PPP Act

Art.4 letter

(q)

Concession

Norms

Art. 7

GEO

54/2006

Art. 7

The PPP Act defines the fixed term of a Public Private

Partnership agreement as a negotiated timeframe

ensuring the recovery of the financing by the Private

Party, without indicating the return on capital as a

criterion for determining such duration.

The Concession Norms provide detailed information

regarding the criteria to be used for determining the

duration of a Concession Agreement. Such duration

must be determined so as to: avoid the artificial

restriction of access to competition, ensure a minimum

profit further to operation within a given timeframe;

ensure a reasonable level of prices for the services to be

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provided throughout the duration of the agreement.

For concessions of assets that are public property, the

duration of the agreement is of maximum 49 years.

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)?

GEO

54/2006

Art. 7

Romanian Law does not include provisions regarding

the renewal or extension of the duration of the Project

Agreement, except for concessions of assets that are

public property. In such cases, the duration of the

concession agreement may be extended by agreement

of the parties for a duration that may not exceed half of

the initial term of the agreement.

For our general information, please provide the given minimum and maximum duration (if any)

Romanian Law provides for a maximum duration of 49 years in case of concessions of assets that are public property.

4.3 Termination of the Project Agreement

QUESTION

ANSWER

ARTICLE

COMMENTARY

4. Does the Law leave open to the Project

Agreement negotiations the list of possible

ground for termination and the content of the

termination provision?

PPP Act

178/2010

Art. 25

letter (c)

Concession

Norms

Art.54

GEO

54/2006

It results from the PPP Act 178/2010 that, for PPPs

governed by this legal text, the parties thereto are free

to negotiate the list of possible grounds for termination

and the content of the termination provisions. Thus, the

PPP Act 178/2010 provides that, besides the expiry of

its term, a PPP agreement may be terminated by mutual

agreement of the parties and in other cases provided by

law or the PPP agreement.

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Art. 57(1) Romanian Law on Concessions provides for restrictive

lists of termination grounds. Besides the expiry of the

term of the agreement, such grounds of termination

include:

- termination by the Contracting Authority in case

of serious failure of the concessionaire in

fulfilling its contractual obligations,

- termination by the concessionaire for serious

failure of the Contracting Authority in carrying

out its contractual obligations;

- termination by the Contracting Authority for

reasons of national or local interest;

- termination by either party for reasons of force

majeure or act of God.

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

Agreement (e.g.: too large or non exhaustive

list)?

As indicated above, the Law provides for exhaustive

lists of grounds of termination as regards Concessions;

the grounds of termination included in such lists are not

such as to lead to the conclusion that they would affect

the balance between the parties rights and obligations.

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?

Concession

Norms

Art. 54

GEO

54/2006

Romanian Law on Concessions expressly provides that

the Private Party is entitled to compensation for losses

incurred as a result of termination on the grounds of

public interest.

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Art. 57

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 provide for compensation of the

Private Party for fair value after depreciation of the

assets financed by the Private Party regardless of the

grounds for termination.

Furthermore, where the agreement is terminated for

failure by the Private Party, the Law prevents the

Private Party from recovering the value of assets

financed

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?

The Law does not provide clear guidance on the

interaction between the bodies awarding PPPs and the

bodies regulating tariffs and service standards

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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?

PPP Norms

Art.93(3)

Concession

Norms

Art. 48

The PPP Norms explicitly provide that the IPPP is

allowed, through the Project Agreement, to collect

tariffs for the use by third parties of the public asset for

a defined period of time, the Private Party being thus

able to recover the investment, to finance the

maintenance and obtain profit.

The Concession Norms also include express provisions

to the effect that a Private Party is entitled to use and to

collect the fruits of the asset subject to Concession

according to the nature of the asset and the purpose

indicated by the parties in the Concession agreement; a

concessionaire is thus entitled to collect tariffs or fees

for the use by third parties of the asset or services.

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) ?

Concession

Norms

Art. 49

As regards Concessions of public works and services,

such possibility results from the provisions of Article

49 of the Concession Norms.

Neither PPP Act 178/2010, nor the PPP Norms include

provisions in this respect.

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5. SECURITY AND SUPPORT ISSUES8

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?

PPP Act

178/2010

Art.30(2)

The PPP Act 178/2010 specifically provides that, with

the exception of assets and land used for the project that

are public property, the assets resulting from the

implementation of the PPP project and the land may be

subject to mortgage or pledge in favour of the parties

having provided financing for the project.

Romanian Laws on Concessions do not prevent the

concessionaire to create such security interests,

provided however that such security interests may not

be created on assets that are public property.

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)?

Please see above.

8 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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For our general information, please can you confirm whether a Private Party may pledge or assign by way of security:

the proceeds and receivables arising out of the PPP;

Yes.

the assets for which it has rights of use under a project agreement;

Yes, except for assets that are public property

its property;

Yes.

shares of the Project Company;

Yes.

the project agreement; or

No.

obtain other valuable guarantees (please specify)?

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

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of the PPP by the Contracting Authority?

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?

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)?

N/A

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)?

Romanian Law does not include specific provisions in

this respect.

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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?

6. SETTLEMENT OF DISPUTES AND APPLICABLE LAWS9

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?

Concession

Norms

Art. 55

2. Has the government of the country ratified the

Washington Convention on the Settlement of

Investment Disputes (ICSID) (1965)?

Yes, Romania has ratified the Washington Convention

on the Settlement of Investment Disputes through

Decree No. 62/1975.

9 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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3. Has the government of the country ratified the

New York Convention on recognition and

enforcement of foreign arbitral awards (1958)?

Yes, Romania has ratified the New York Convention on

recognition and enforcement of foreign arbitral awards

through Decree No. 186/1961.

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.

There is no provision under the Law expressly

preventing the Contracting Authority from entering into

side agreements to the Project Agreement governed by

foreign law.

5. Has the country ratified any international

convention for the protection of foreign

investments?

Yes, Romania has ratified numerous conventions for

the mutual development and protection of 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?

Romanian Constitution states that public assets may be

operated by the private sector under Concessions.

Although there is no official document setting forth a

national policy framework or strategy on PPPs in

general, we note the existence of such strategies for

several sectors, among which, infrastructure, municipal

services and energy.

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?

No such guidance or information has been yet

published as regards PPPs under the PPP Act 178/2010.

However, a Guide for the implementation of works and

services concessions in Romania, approved by Order of

the Ministry of Public Finance and the relevant

regulatory authority (ANRMAP) in 2009 provides

guidance on the award of Concessions.

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3. Is there a municipal/regional policy framework

(explicit or implicit) for PPPs in infrastructure

or public services?

There are various projects related to the development of

certain regions. We note the existence of infrastructure

development programs for small and medium size cities

in Romania, as well as road refurbishment and water

supply programs, integrated waste management at a

county level.

7.2 PPP Awareness and Sustainability

4. Is there a national and/or municipal /regional

long term programme for PPP promotion and

awareness?

No national/municipal/regional long term program to

promote or present PPPs has been developed so far.

Awareness/promotion of PPPs is limited, being carried

out only through the media informing the public of the

enactment or amendments of PPP laws and of PPP

projects or within the framework of debates organized

in specialized business environment.

5. Are there PPP training programmes on a

national and/or municipal/regional level for

public servants and other PPP concerned

people?

To our knowledge, no action has been taken so far in

organizing any special training programs on PPPs under

PPP Act 178/2010 and a limited number of training

courses and conferences have been organised on

Concessions.

6. Are there PPP courses as part of university

curriculum or specialist departments and

faculties in universities teaching PPP?

To our knowledge, PPPs are not the subject-matter of

specialized courses or specialist departments and

faculties in universities. Administrative law courses

taught at the Faculty of Law include very few

references to Concessions.

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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.)?

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.)?

For our general information, please describe the existing impediment and obstacles if any with respect to the two previous questions

Insufficient training of public servants in the relevant entities that might qualify as Contracting Authorities and insufficient awareness of the

public regarding the PPPs may be possible obstacles from a social and political standpoint.

In our opinion, despite recent amendments to the PPP Act 178/2010 and the PPP Norms, the implementation of PPPs may encounter obstacles

deriving from the fact that the current legal framework is not clear enough as regards the scope of application thereof and, in particular, the

delimitation between PPPs and Concessions.

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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?

The entities that may be considered as having the role

of Central PPP Units are as follows:

- for Public Private Partnerships: the Central Unit for

Coordinating Public-Private Partnership (UCCPPP);

and

- for Concessions: the National Authority for

Regulating and Monitoring Public Procurement

(ANRMAP).

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?

The above mentioned entities are composed mainly of

civil servants.

ANRMAP is entitled to employ personnel including

specialists from the business environment.

3. Is the role of such Central PPP Unit comparable

to a "task force" assisting in the development of

projects in general and not limited to promotion

of PPP?

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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)?

Both ANRMAP and UCCPPP verify before publication

the relevant notices and requests for proposals and must

give their consent as regards the content thereof.

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?

Both UCCPPP and ANRMAP have a role of providing

counsel and guidance to both Contracting Authorities

and Private Parties in respect of the implementation of

PPPs.

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).

Further to the enactment of the new legal framework on PPPs, the UCCPPP has been recently reorganised and has received more powers and

functions. Currently, UCCPPP is organised as a department subordinated to the General Secretary of the Government and has, among its key

functions, the following:

- verifying contract notices and accompanying documents thereof;

- preparing the national strategy for the promotion and the implementation of PPP projects;

- monitoring the implementation of such strategy, establishing and promoting procedures in view of identifying and carrying out PPP

projects and providing support to Contracting Authorities in the process of preparing and implementing PPP projects;

- ensuring the promotion of the PPP concept and projects;

- preparing documents on the implementation of PPP projects;

- taking part, further to the invitation of Contracting Authorities, at the evaluation and negotiation commissions set up in view of selecting

a Private Party for the execution of a PPP agreement;

- identifying and ensuring the national wide dissemination of the best practices in the field of PPPs;

- establishing contacts with and keeping informed both governmental and nongovernmental bodies and Romanian and foreign investors as

regards investments through PPP projects;

- ensuring the contact between Romanian and foreign investors and Contracting Authorities in view of carrying out PPP projects;

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- issuing recommendations on structuring PPP projects considering the impact of credit on the public sector as well as credit limitations at

a national and local level;

- monitoring the implementation of PPP projects and coordinating the actions required in view of the proper implementation thereof;

- providing specialised counsel to both Contracting Authorities and private investors on all stages of implementation of a PPP project;

- providing specialised assistance to Contracting Authorities on the setting-up the specialised department coordinating PPPs.

ANRMAP is a public institution under the subordination of the Romanian Government whose fundamental role consists in defining the concept,

promoting and implementing policies in the field of public procurement. The attributions of ANRMAP also refer to Concessions and, among the

key functions of this institution we note

- preparing action plans in view of implementing the strategy and development policy in the public procurement field;

- preparing and submitting for Government approval legal texts in the field, including amendments to existent texts;

- evaluating the requirements of improving the relevant legal framework and proposing measures in view of remedying the deficiencies

noted;

- approving draft pieces of legislation in other fields with an impact on the activities and public procurement;

- developing monitoring mechanisms and monitoring the award of agreements;

- setting-up a data base and preparing statistics and reports, analysis, studies and evaluations of the public procurement system;

- verifying and assessing the notices and requests for proposals before publication thereof;

- monitoring the functioning of the public procurement system;

- providing counsel and guidance to Contracting Authorities and bidders;

- organising training programs and public debates.

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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

regional level?

7. Is there any specific PPP unit department in any

ministry (other than the central PPP unit) or at

sectoral level?

Such entities should have specialised departments on

public procurement and concessions, furthermore,

entities having the capacity of Contracting Authorities

carrying out more than 2 Public-Private Partnerships

are entitled to set up a department dedicated to PPP.

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?

9. Is the division of power between different public

authorities involved in the PPP granting process

simple and coordinated?

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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

discussed above? (with or without specific

reference to the Law)

No PPP project has been awarded so far under PPP Act

178/2010.

A limited number of Concessions have been awarded

under GEO 34/2006. Thus, to this day, SEAP has

published a number of 194 notices for the award of

Concessions of works and services, the vast majority

thereof being awarded by local and county authorities in

the field of municipal services.

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)?

To our knowledge, the Concessions awarded under

GEO 34/2006 have generally been awarded according

to competitive selection procedures.

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.

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To our knowledge, county and local authorities set-up associations with Private Parties in view of carrying out projects of county/local

interest by resorting to the provisions of the Local Public Administration Act No. 215/2001, without organising competitive tender

procedures.

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?

There are no official statistics on PPPs implemented and

put into operation allowing us to give an assessment in

this respect. In absence of publicly available

information to the contrary, it can be argued that most

of them have been 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?

Yes. We are aware of such PPP carried out by

Bucharest Municipality in the water sector.

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,

transport)?

To our knowledge, there has been a very limited

application of PPPs in the medical sector regarding

dialysis centres.

For our general information:

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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)?

There is no updated official statistics of PPP projects implemented and presently in operation. In any case, as a general remark, Romanian

experience in implementing successful PPPs is very limited. Thus, the absence of an important number of successful Concessions

implemented under GEO 34/2006 has been indicated by the Romanian authorities as one of the reasons for the enactment of the PPP Act

178/2010.

As indicated above, no PPP has been awarded so far under the PPP Act 178/2010. As regards Concessions, in absence of statistics on the

actual implementation thereof, we cannot assess how many Concessions out of the194 agreements awarded under GEO 34/2006 (according

to the award notices published by SEAP) have actually been implemented.

Furthermore, it should also be noted that PPP projects have also been implemented and put into operation before the entry into force of GEO

34/2006.

As regards sectors, most of such PPPs appear to have been awarded in municipal services sectors: water and waste.

Please give some examples of the most significant project awarded:

under which legal form have such PPP projects been awarded (Concession, BOT, PFI, other):

In terms of legal form, PPPs awarded under Romanian Law have been mostly in the form of Concessions in the municipal services sectors.

have such PPP project been granted by (i) central, (ii) sub-sovereign/regional (if applicable) or (iii) municipal government as Contracting

Authority;

PPPs have been granted mostly by local/county authorities acting as Contracting Authority.

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

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(i) PPPs began to be awarded in Romania in the last 10 years. Before the enactment of GEO 34/2006, PPPs have been awarded

based on the previous legal framework regarding Concessions of works and services and Public-Private Partnership.

please give examples of any PPP projects awarded but not implemented (or not implemented under a PPP form)

We note an example of a PPP project awarded but not implemented in the infrastructure sector: the Concession agreement for the design,

financing, construction, operation and maintenance of the Comarnic-Brasov Sector of the Bucharest-Brasov Motorway.

.are there any PPP/Project Agreements in discussion?

Yes, in April 2011, the Romanian Government has announced a list of 17 projects to be carried out on a PPP basis under the PPP Act 178/2010

in sectors among which: infrastructure, energy, health, housing, prisons.

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?

Yes, the Law provides for relevant mechanisms in this

respect.

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?

Yes, the Law provides for relevant mechanisms in this

respect.

9. Have PPP project been implemented by the

parties most generally without serious

Yes, according to publicly available information we are

aware of.

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claims/arbitration by either Party concerning the

performance of the Project Agreements under

the Law?

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

with the Law?

N/A

We are not aware of any such cases.

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.

We are not aware of any such challenges.