Overview of the PPP legal framework in
Moldova
Tony Bonnici
Economic Affairs Officer, UNECE
Chisinau, Moldova
10 October 2012
Overview of the PPP legal
framework in Moldova
• enacted its first PPP Law in 2008;
• Provided a platform to depart from traditional
concessions and focus on the improvement of
various public projects or public services via
PPPs;
• framework law that gives full control to the
competent public entity in conducting the
tender process, negotiating the PPP contract
and monitoring its implementation, and…
Overview of the PPP legal
framework in Moldova
• …consents the public authorities to develop any
type of project, not necessarily in those forms
specified by the law, and...
• …some projects have not fully matched any
form of PPP described by the law;
• a framework law is essentially a statute which is
drafted in general terms and merely lays down
a framework, where…
Overview of the PPP legal
framework in Moldova
• …more detailed regulation is left to other,
usually public bodies, the courts, and
Parliament, to develop as ‘subsidiary legislation’
• situation in Moldova right now;
• one of the main challenges going forward in the
PPP development is the adoption and
implementation of subsidiary legislation and
administrative provisions;
Practical Challenges
A number of practical challenges, or potential
barriers, where identified during the RA process:
1. the short duration of the tender process: the law
allows for a fixed, 60 calendar days' period
between publication of the request for proposals
to the designation of the winning bidder. The law
also grants an additional 30 day' period for
contract negotiation with the winning bidder.
This limited span of time could provide a formidable
barrier to international bidders and possibly reduces
the number of bidders that might lead to less value
for money to the public authorities.
Practical Challenges
2. the amount of compensation which the public
authority would need to pay to the private partner
in case of early termination of the PPP contract.
The PPP law has no clear answer. This is a crucial issue
that would need to be addressed at some point in
secondary legislation.
Practical Challenges
3.arbitration clauses - allowed in the PPP contract but are
resisted by public authorities for two reasons:
(i) the high perceived cost of international
arbitration;
and
(ii) the fact that an arbitral procedure would not
give
immediate relief to public authorities
(eg no
access to interim
measures otherwise afforded by
domestic law.
Having said that, in June 2011, Moldova ratified the
Convention on the Settlement of Investment Disputes
between States and Nationals of Other States, and this in
itself should send a positive signal to international
investors.
Practical Challenges
4.
Step-in rights are not statutorily available for
lenders in Moldova, and in the case of default
by the project company, the contracting authority
is
entitled to terminate the PPP project
agreement and claim damages in court .
However, nothing in the law precludes the parties to
agree to the inclusion of step-in rights for lenders in
the project agreement.
Thank you for your attention!
Tony Bonnici
Economic Affairs Officer, UNECE
Tony.Bonnici@unece.org