UNCITRAL Colloquium Possible future work on PPPs « Scope of any future legislative text »

Vienna, 3 –4 February2014 ***

Marc Frilet

ManagingPartner «Frilet –Société d’Avocats» Chair of the Management Committeeof GcilA Vice-Presidentof the French Institute of International LegalExperts (IFEJI) Head of the draftingcommitteeCICA PPP-WorkingGroup Co-promoterof UNECE PPP International Centre of Excellence 1

What PPP are not ?

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Not public private contracts for building or rehabilitating a public infrastructure paid upon completion

• • • Remeasurement contracts are not PPP Design and build contracts are not PPP EPCM contracts are not PPP 

Not public private contracts for operating a public infrastructure paid upon delivery of the service

• • Facility management Operation & maintenance 

Not privatization of public service



Not a contract for public infrastructure service without direct income flow

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Some discriminating factors deserving special regulations (1)

1. Project of general interest and participation to a public service

• • • Service always adapted to the needs and contributing capacity of the users Service cannot stop Service to be provided in a non discriminatory manner

2. Unconventional nature of investments

• • • Specialized infrastructure exclusively dedicated to the optimum delivery of the public service Long term recovery cycle Cannot be sold for other use

3. Unconventional financing

• • • Many risks unusual for the financial community: no familiar with concept of incomplete contract Long term financing (beyond 15 years often necessary) Project financing technique often useful 3

Some discriminating factors deserving special regulations (2)

4. General laws not well organized to:

• • Adapt contracts to changing external conditions (stability of regulatory and socio-economic landscape) Give priority to public interest obligations over contractual rights

5. Private sector not well organized for entering into global contracts including under one hat including

• • • • Financing Designing Building Operating a public service 4

Main scope for UNCITRAL Model law ?

Public Private Infrastructure Service (PPIS)

 A physical infrastructure which is the support of a public service is designed, financed, built or rehabilitated and operated by a commercial company selected by way of competitive bidding and operating the service in accordance with the provisions of a contract, entered into with the public authority in charge of delivering such a service.

 The contract, based on functional specifications and performance criteria provides for a compensation of the company by the public authority or by the end users (or a combination of both). The service is rendered for a time period calculated in such a way that the company may amortize all costs and make a

reasonable profit.

 At the expiry of the term, the infrastructure is transferred in good operating conditions to the public authority, generally without compensation unless, such a compensation is provided for the contract.

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Two main families within PPIS

1. PFI / PPP family 2. Concessions / PPP family

 Design (based on functional specifications)  Build and rehabilitate  Finance    Operate the infrastructure or utility without delivering the

public service to the end users

Compensated entirely by the public authority when service is rendered   Operate infrastructure of utility and in charge of delivering full

public service to the end users

Compensated entirely or mainly by the end users paying for the service Contract duration limited to the project cycle (amortization of assets, profit marging and financial recovery) 6

The debate is open !

Thank You !

Me Marc Frilet

Frilet – Law firm/ GcilA 91, rue du Faubourg Saint Honoré 75008 Paris – France Tel : + 33 1 56 26 00 40 e-mail : [email protected] www.gcila.org

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