Draft law on PPPs ready this week

The draft law on public-private partnerships (PPPs) will likely be published by the end of the week, Giorgos Mergos, general secretary of the Ministry of Economy, told reporters and businesspeople yesterday. Mergos spoke at a presentation of the activities of the European Investment Bank (EIB), the European Union’s long-term credit institution, in public-private partnerships. EIB was represented by two high-ranking officers, Vice President Gerlando Genuardi and Terence Brown, director-general of the Directorate for Lending Operations – Europe. It was an indication of the EIB’s interest in helping finance more projects in Greece. So far, three major projects, all partly financed by the EIB, have been public-private partnerships: the new Athens International Airport, opened in March 2001; Attiki Odos, the highway skirting Athens and connecting the city to the airport, which opened in stages between 2001 and 2004; and the Rio-Antirio bridge, connecting the Peloponnese with western Greece, which opened last autumn. All three projects are now operated by the consortiums that built and partly financed them; after a period raging from 30 to 50 years, the projects will come under state ownership. Mergos explained that the forthcoming law only concerns investments worth up to 100 million euros. Bigger investments, which include seven highway segments on which the Ministry of Environment and Public Works wants to place a call for bids, will continue to be regulated, as in the past, through ad hoc legislation. Mergos said that the government had already consulted with banks on the PPP law and included several of their points. The consultation stage with other interested parties has nearly been concluded. He added that private sector participants will provide, besides much-needed capital, know-how and, hopefully, better management than state or local agencies. Despite these advantages, PPPs are not going to become the rule in public procurements, Mergos said; the government is going to use them when it sees a distinct advantage in PPPs over state financing. The new law will extend PPPs from transport infrastructure to all public utility projects, such as the construction of schools and hospitals, defense and cultural projects. In other European countries this happened several years ago, most importantly in the UK. Transport infrastructure remains the main sector in which PPPs are applied. The bill calls for the setup of a new state agency that will help standardize procedures and contracts and will act as a consultant to state and local agencies intending to enter into partnerships with the private sector.

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