Public Private Partnership
has finally become law
Sectors covered include electricity production,
public transport, and trash management
Parliament ratified the Public Private Partnership (PPP) law.
All partnership projects that would be prepared by the government, public administrations, and by municipalities and union of municipalities, are governed by this law.
Mohamed Choucair, Chairman of the Chamber of Commerce, Industry, and Agriculture in Beirut and Mount Lebanon, said: “This law will reactivate investments, and will create a good economic activity.”
Choucair said that there is liquidity in the banks, and a lot of investors who have the will to invest in the country’s infrastructure. “There are a lot of projects that can be implemented through PPP, such as train stations, dams, and roads.” He said that the tobacco state-monopolized Régie, and the telecom sector can be managed by the private sector.
The law will be applied to government and municipality projects, such as infrastructure. This includes electricity production and distribution, public transport, and trash management, as well as telecom and civil aviation.
The Higher Council for Privatization and Partnership will be the authorized party for approving, launching, and managing projects, and it will act as the liaison between the private sector and government bodies. A regulatory authority will be established for each concerned sector to issue, renew, and terminate licenses. The authority will also approve service charges and impose fines.
The projects will be proposed by the Higher Council for Privatization and Partnership, or the concerned ministry. The council should study the project and then submit a report explaining the feasibility of doing the project through PPP. Mutual projects are then referred to the Council of Ministers for approval. Projects related to municipalities should be referred by the mayor or the federation to the council.
For each project, the council invites interested companies to apply for a prequalification round. The number of final bidding participants should not be less than three.
The council is required to prepare terms of reference. It conducts consultations with the participants and funding parties to set the technical and financial requirements to implement the mutual project, and amend the terms of reference draft accordingly.
Private partners are not allowed to sell their company shares before starting the operational phase. The government can be a partner in the company established for a mutual project. One member from the government will be represented in the board of the company.
The contracts should be signed by the representative of the company and the concerned public authority. The partnership contract should include: funding process, the contract duration which should not exceed 35 years, and the revenues of the project. It should also include the fines, commissions, and fees related to the project, and the risks involved for both parties.
The government will be controlling the project implementation in the establishment and operational phases.
The government has the ability to provide the company with its owned lands.
The company established for a specific project can benefit from IDAL’s incentives.
The law specifics still require decrees from the Council of Ministers.
Date Posted: Aug 17, 2017