New Public-Private Partnership Regime

After long-lasting debates, continuous modifications, the National Executive's bill on new legal framework for Public-Private Partnership was finally approved by the National Congress on the 16th of November.

The proposed bill was already approved by the Senate on the 21st of September, however, the bill has received strong resistance in the Lower House (Cámara of Diputados). On November 30, 2016, the bill was published in the Official Gazette.

In Argentina, the need for infrastructure repair and improvement is quite acute. It lacks capital, technology, management, and other resources. Neither the public nor private sector alone is able to overcome the deficits. Thus, the new legal framework aims to attract the interests of either banks or financial corporations.

The main idea is to build such cooperation between the public and private sectors which will benefit both sides, as well as the economy of the country and the people. Thus, the bill aims not only to attract investments in infrastructure, but also to create new workplaces. It is something that the new administration has been promoting from the beginning of its operation. Another important purpose of the law is to convince the rest of the world to trust the country by restoring investor confidence.

The bill constitutes only an alternative way of cooperation, which means that the tradition model may still be applied. The bill is relatively short, it sets out key guiding principles and mandatory terms of the regime. It clarifies that more detailed regulations will have a place in subsequent legal acts, bidding terms and conditions of the contract. Thus, to the projects governed by the PPP regime, none of these acts will apply: Public Works Law N 13,064, Concession of Public Works Law N 17,520, and the Public Procurement Decree N 1023/01.

What are the main provisions and benefits of the PPP regime?

Transparent, flexible and competitive procurement process. The PPP bill requires a transparent, flexible and competitive procurement process and can be launched by means of a tender or private initiative. Moreover, the bill provides a new tool - Competitive Dialogue, which is widely used in the U.S. It applies when a government determines its final goal, but there are a variety of methods to reach that goal. So, the government may discuss all available methods with possible contractors and start a public bidding process with a formulated final request.

Flexibility in financing and guarantee...