Domestic legal framework for PPPS and implication of the EU rules

• Author: Mihaela Tofan
• Position: Faculty of Economics and Business Administration, 'Alexandru Ioan Cuza' University, Iasi, Romania
• Pages: 206-210

DOMESTIC LEGAL FRAMEWORK FOR PPPS AND IMPLICATION OF THE EU

RULES

Associate professor Mihaela TOFAN1, PhD.

Abstract

The pa perwork aims at analyzing the domestic legal frame work and the implication of the Public Private

Par tnerships EU r ules at na tional level, especialy the Romanian case. Among the multiple positive goa ls of the Public

Private Partnership s, the paper ta kes into considera tion the fact that the PPPs ar e one of the the solutions to overcome

the gener alized sub financing situation of the public spending a nd investments. To value this particula r quality of the

the PPPs, they should be ruled in a unique manner at European level, in order to insure the pr oper r esults for the

practice in the field. The influence of the legal frame work on the per formance of the P PPs is pointed out and some

legal improvements should be the main objectives of the research.

Keywords: public-private pa rtnership, public investment, the European Union, a dministra tive law

JEL Classification: K23

1. Introduction

Partnership is a form of that implies co-financing planning and building infrastructures,

operating and maintenance of public service in order to offer an efficient alternative to the

traditional framework. The relations of public-private partnership (PPP) are a legal understanding

between different subjects whereas the partners establish together the purpose of the partnership

with the impact on the community level2. Today, governments are keen to shift more welfare

provision into private hands to keep public spending under control and to avoid having to raise

taxes or cut benefits3.

This traditional view was recently abandoned in the favor of the complex cooperation

between public sector and private initiative. The public-private partnership is present today on local

level, as the cooperation between local authorities and private sector aimed to implement the project

to restructure the industrial areas in collapse4. This situation stimulated the privatization process.

The drive to privatization of public services has been apparent at every level of government. The

private sector is present in partnerships with public sector, bringing an important contribution in

resolving various problems. In order to choose a public-private partnership, the administration

should consider the following arguments5:

• the lower cost, considering the fact that the private partner is able to borrow money

easier and with a lowers interest level that public institutions;

• the lack of expertise for the technical personal in the administration;

• as the private companies are governed by others legal documents than public sector,

the private companies are more flexible in conceiving and managing a project;

• private companies usually take action faster.

The concept of public-private partnership expresses a way to cooperate for a public

authority and private sector, non-profit organization, businessmen associations or companies to

make a project with positive effects on the labor market and local development.

1 Mihaela Tofan - Faculty of Economics and Business Ad ministration, „Alexandru Ioan Cuza” University, Iasi, Romania,

mtofan@uaic.ro

2 Camera de Comer şi Industrie a României, Ghid pentru par teneriat public-privat, Bucureşti, 2005, www.ccir.ro.

3 Pauline Vaillancourt Rosenau, Public-Private Policy Partnerships, Massachusetts Institute of Technology, 2000, p. 2.

4 Local par tnership for better governance, OECD, P aris, 2001, page 15, and also Par tnerships, Par ticipation, Investment, Innovation

Meeting the Challenge of Distressed Urban Areas, Dublin.

5 Seader, David L., The United States Experience with Outsourcing, Privatization and P ublic Private Par tnership”, SUA, 2002.