July 13, 2012

New PPP Act adopted

The new PPP Act has been published in the Official Gazette No.78/2012 of 13th July and shall enter into force as of 21st July 2012.

Compared to the previous PPP Act as of October 2008, the new PPP Act reduces the administrative time for project approval at various stages of preparation of documentation from 120 to approximately 30 days simplifying the overall process of preparation, evaluation and implementation of the project, but also increasing its quality.

With this very important improvement of the Act as one of the most important prerequisites to accelerate investment in Croatia, the amendments relates to the following provisions:

–          The risks allocated to the private partner are more precisely defined and thus the unitary charge paid by public partner is recorded as rent;

–           Allow partial commercial use of public buildings to reduce the rent payable by the public partner to achieve greater savings in public expenditure;

–          More closely define the criteria on the basis of which the Finance Ministry and the Agency for Public Private Partnership grant proposal;

–          Introduces the obligation of intensive cooperation between PPP Agency and public bodies with aim to expedite the resolution of some uncertainties in the process of preparing and approving the project proposal creating a good practice, which results in reducing delays in the preparation process;

–          Imposes a duty of monitoring of the project implementation and approval of the amendments to the contract for projects that are already recorded in the Register. This improvement is very important and intends to protect public bodies from the adverse outcomes of possible amendments to the already signed contracts.

We are confident that this new act represents a good basis for effective development of public-private partnership market following transparent and comprehensive procedure.