Romania Amends Law On Public-Private Partnership - Sources

04.20.2011 By Ioana Tudor

The Romanian Government amended the law on public-private partnerships (PPP), after the European Commission warned Romanian authorities that the normative act breaches EU legislation, people close to the matter told MEDIAFAX Wednesday.

The Romanian Government amended the law on public-private partnerships (PPP), after the European Commission warned Romanian authorities that the normative act breaches EU legislation, people close to the matter told MEDIAFAX Wednesday.

The law on public-private partnership, which entered force in October 2010, has been amended through an emergency ordinance approved by the Government during a meeting Wednesday, said the sources.

The draft emergency decree presented by MEDIAFAX last week states the Government will have the right to bar companies with debts to the state budget from public-private partnership contract auctions and will evaluate the offers according to the share of the contract that the investor pledges to cede to SMEs.

Apart from companies which have not paid their taxes and social security contributions to the budget, the government may reject the offers made by firms that have been ruled bankrupt by an insolvency court, or have been subject to equivalent procedures according to the laws of other states, as well as legal entities sentenced in accordance with the Criminal Code in the last five years.

The Government may also reject bids submitted on auctions awarding public-private partnership contracts, if the respective offers are "unusually low" and if data show investors will not be able to meet requirements.

Companies will no longer have to provide a 2% guarantee in order to contest a Romanian auction for a public-private partnership contract, but a guarantee of 1% of the contract's estimated value will be a condition for participation, according to the decree.

Investors will be selected through open procedures or competitive dialog.

These changes are needed as the European Commission's Internal Market and Services Directorate General warned Romanian authorities that the current law on public-private partnership violates EU norms.

Romania had until April 15 to amend the law.