New Romanian PPP Draft Law Sent to Parliament

by Ligia Popescu and Fabiola Meister

High hopes are pinned on this law, which is introduced against a backdrop of failed prior efforts by Romania in the 1990s and early 2000s to construct significant infrastructure projects through concessions or PPP models.

The draft law largely follows the French model and was designed with assistance from international financial institutions such as the European Bank for Reconstruction and Development (EBRD) and the World Bank (WB). Business advocacy groups such as AmCham, the Foreign Investors Council (FIC) and the Romanian German Chamber of Commerce and Industry were also consulted in relation to the draft law.

The draft law aims to improve the current PPP Law, which has been widely criticized since its introduction in 2010 as essentially non-bankable, failing as it does to reflect proper European good practice guidelines such as those issued by the European Public Private Partnership Expertise Centre (EPEC).

Under the new PPP law, authorities will set up a special division within the Ministry of Finance to assess projects with assistance from the European Commission.

The new draft law includes provisions from the future EU directive on PPPs, something that had been requested by the EC and the Directorate General (DG) for Regional Policy.

Romania has recently tendered (under existing concession law Emergency Ordinance 34/2006 on Public Procurement, as amended) the Comarnic-Brasov and Craiova-Pitesti highway projects and the South Ring of the Bucharest bypass, and the winning bidders are set to be announced by October 25, as Dan Sova, Delegate-Minister for Infrastructure and Foreign Investments has informed the public.

Minister Dan Sova has high expectations for the draft law, which is set to be debated by Parliament in this session. He anticipates that the adoption of this new PPP law will allow Romania to launch successful international tenders for upcoming highway constructions.

The Government also has announced its intention to use a PPP regime to build large energy generators such as the two new nuclear reactors at Cernavoda, (approx. EUR 6 billion investment) and the Tarnita Lapustesti hydro pumping electricity power plant (approx. EUR 1.3 billion).