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Tsvetomir Kalchev, Ministry of environment and water tsvkalchev@gmail

Public-private partnership in the sphere of household waste management. Tsvetomir Kalchev, Ministry of environment and water tsvkalchev@gmail.com. What is Public private partnership?.

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Tsvetomir Kalchev, Ministry of environment and water tsvkalchev@gmail

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  1. Public-private partnership in the sphere of household waste management Tsvetomir Kalchev, Ministry of environment and water tsvkalchev@gmail.com

  2. What is Public private partnership? The public private partnership is a main instrument for the realization of infrastructural projects all over the world. The need to develop public infrastructure as an engine of economic development and the limited budget for its construction and maintenance are the main prerequisites for the emergence and spread of this form of cooperation between public authorities and the private sector.

  3. The main delusions for PPP

  4. PPP Legislation EU Legislation BG Legislation 1. Green Paper on Public-Private Partnerships 2. Commission interpretative communication on the application of Community law on Public Procurement and Concessions to institutionalized PPP (IPPP) [2008/C 91/02 – Official Journal C 91 of 12.4.2008]. 3. Directive 2004/18/CE: on public works contracts, public supply contracts and public service contract. 4. Directive on “special sectors” 2004/17/CE on public procurement in the water, energy, transport and postal services sectors. 1. Public private partnership act. 2. Statute-book on public private partnership act. 3. Regulation on rules and requirements for planning and criteria for covering the private partnership projects in to the operational plan and in to the realization program of municipal development plan. 4. Guidelines for the public private partnership – first and second editions. 5. Preparation of financial models for PPP guidelines. 6. Guide to Cost Benefit Analysis on Investment Projects. 7. Concessions Act. 8. Regulations for Application of the Concession Act. 9. Public Procurement Act. 10. Regulations for Application of the Public Procurement Act

  5. Public-Private Partnership, Concessions and Shareholdings Division, Real Sector Finance Directorate, Ministry of Finance 1. Coordinates the elaboration of bills and drafts of secondary legislation, methodologies, guidelines, instructions, financial models, financial and economic analyses and model contracts in the area of public-private partnership (PPP) in accordance with the best European and world practices and with a view to the effective and efficient spending of public funds; 2. Provides methodical assistance to central and local authorities in the process of investment projects' development and structuring through PPP schemes; 3. Where necessary, participates in the preparation of the state budget for the relevant year as regards the planning of funds for compensatory payments under PPP projects; 4. Takes part in the project teams in regard to the development of PPP projects as well as in the processes of private partners' selection and implementation and control of PPP contracts in projects of national importance; 5. Coordinates the analyses as to the expedience of PPP schemes' use for the implementation of investment projects of national importance as well as the financial and economic analyses of the developed PPP projects of national importance; 6. Represents the Ministry of Finance in the European PPP Expertise Centre (ЕРЕС) and in the expert groups thereto, as well as in working groups on PPP at EU level, in the team of specialists on PPP to UNECE and in the expert groups thereto.

  6. The main objectives of PPP Act 1. To ensure the development of high-quality and accessible services of general interest by achieving better value for invested public funds. 2. To create prerequisites for encouragement of private investments in the construction, maintenance and management of facilities from the physical and social infrastructure and the carrying out of activities of general interest. 3. To set up guarantees for protection of public assets and for effective management of public funds in the process of PPP. 4. The principles of publicity, transparency, free and undistorted competition, non-discrimination, equality and proportionality shall be observed in PPP.

  7. PPP Act Public-private partnership shall mean long-term contractual cooperation between one or more public partners and one or more private partners, on the other hand, for carrying out an activity of general interest while achieving better value for invested public funds and distributing risks between the partners under the terms and according to the procedure of this Act. Public-private partnership within the meaning of PPP Act shall occur where the following conditions are met: 1. The activity of general interest may not be awarded pursuant to the Public Procurement Act, because: a) the public partner is unable to ensure financing for the activity of general interest and the private partner has to provide full or partial financing; and b) the distribution of risks between the public partner and the private partner shall lead to better value for invested public funds; and 2. the activity of general interest cannot be awarded as a concession because there is no revenue from the users of the service of general interest or from third parties with relation to the activity of general interest, or where such revenue exists - the private partner is not entitled to rights over such revenue.

  8. PPP Act The following shall not be considered PPP within the meaning of PPP Act: 1. Concessions awarded under the terms and according to the procedure of the Concessions Act and of the Subsurface Resources Act ; 2. Public procurement awarded under the terms and according to the procedure of The Public Procurement Act . Where the service of general interest generates revenue from users or third parties with relation to the activity of general interest, the private partner may be assigned to collect such revenue in favor of the public partner.

  9. Requirements of PPP Act 1. During the term of PPP none of the partners shall have the right to transfer to third parties the facility used to carry out the activity of general interest. 2. In a PPP risks shall be distributed between the public partner and the private partner. The distribution of risks shall be determined on a case-by-case basis for each PPP depending on the partners' potential to evaluate, control and manage risks. 3. The private partner shall always take on the works risk and at least one of the following two: availability risk or demand risk for the service of general interest. 4. The taking of risks shall not guarantee reimbursement of the funding invested in the implementation of the PPP contract. 5. In PPP economic balance shall be maintained, i.e. balance between the benefits for the public partner and the private partner and the distribution of risks between them. 6. The private partner shall perform the activity of general interest and shall ensure financing for it. 7. The public partner shall participate in PPP by providing financial support to the private partner.

  10. Requirements of PPP Act Public-private partnership shall be effected with a PPP contract vary between 5 and 35 years. I. Public partners 1. Government ministers and heads of institutions. 2. Municipal mayors - for municipal PPP's. 3. State and municipal public-private entities II. The private partner The private partner which is party to a PPP contract may be an equity company existing or newly established, in compliance with the requirements referred to in PPP Act.

  11. PPP PROCEDURE 1. Each interested party may propose to a competent public partner to initiate PPP. 2. The proposal of the interested party shall be accompanies by a justification and a financial and economic analysis, and where works are involved - also by a pre-investment study or an investment project. 3. When the public partner has used the pre-investment study or the investment project, the interested party shall have the right, if not selected to be the private partner, to remuneration for the data from the pre-investment study or from the investment project used in the technical specifications. The amount of such remuneration shall be determined by the public partner on the basis of a methodology stated in the rules for implementation of the Act and shall be paid out no later than one year after the notice is published. 4. The proposal from the interested party does not ensue any other rights or privileges.

  12. PPP Contract 4. The PPP contract shall contain at least the following 4.1. Parties to the contract 4.2. Subject of the contract, including description of the facility and of the activity of general interest, as well as of the service of general interest - where applicable. 4.3. Entry into force of the contract, preliminary conditions, if any, and duration of the contract;   4.4. Amount and sources of funding from the private partner;   4.5. Exact amount of the financial support;  4.6. The distribution of risks between the parties;   4.7. The rate of return;   4.8. The terms and procedure under which the public partner shall receive the excess of the profit generated by the private partner from the awarded rights;   4.9. The conditions determining economic balance and any factual or legal circumstances relating to the facility, the activity or the service of general interest, whose occurrence might lead to disturbing the balance;  4.10. The rights and obligations of the parties, terms and deadlines for their performance;   4.11. The terms and procedure making an insurance on the facility;   4.12. The technical specifications; 4.13. The terms and procedure for involvement of subcontractors; 4.14. The terms and procedure for reporting and monitoring on the performance of obligations on the part of the private partner; 4.15. The guarantees for contract completion and liability in case of non-performance, including forfeits;   4.16. The terms and procedure for amending the contract in accordance with section IV;   4.17. The procedure for early termination of contract on the grounds referred to in section V;   4.18. The consequences of contract termination.

  13. Primary Project Evaluation System

  14. SWOT Analysis of PPP

  15. Procedure comparison Preparation of the tendering docs Open tender Public acces Preparartion of the ofers Contracting Evaluation commission Anounsing the tend docs Complain The average contracting time is 6 months if there is no complaining NEGOTIATED PROCEDURES Preparation of the tendering docs Commission for examination of the detailed applications Commission for examination of the applications Complain Contracting Invitation for detailed proposals Ivitation for negotiation

  16. Different ways for the project agitation Open tender Concession PPP Project aspects Goal Specific output parameters Specific input parameters Specific output parameters Financing Private/combined Public Usually private Financing and exploitation or financing and construction Project phases All the phases Usually one of the phases Project risks Public body in most of the cases Private body in most of the cases Effective risk distribution Time schedule Short to midterm Long-term Long-term Efforts and expert efforts Great Small to medium Medium to great Public finance After the job is done Significant payments at the start Limited possibilities Standard Usually lack of standards Always included Always included

  17. Project realization Different ways for the realization of infrastructure project Private investment PPP Public Investment Project aspects Public aspect Full control of the contracting authority No public aspect High public aspect Realization period Defined by the contracting authority No public aspect High public aspect Realization guarantee From contracting authority to the Contractor Market orientated Provided from public partner to private partner Financing Private investment Private partner and/or combined Contracting authority (public body) Market risks The private investors handle all the risks Equal risk distribution Contracting authority (public body) Economic benefits Expectation for sustainable benefits Market orientated Sustainable benefits

  18. BG PPP Examples Title of the project:MBT Plovdiv and 1st landfill cell State partner: Municipality of Plovdiv Population maintained:338 153 inhabitance Municipality maintained: 1 number Year of realization: 2009 Facility type:MBT Plovdiv Capacity: 125 000 tone per year Amount of the investment:37 107 354 lv.

  19. BG PPP Examples Title of the project:Regional Landfill State partner: Municipalities of Kostinbrod, Svoge, Bojurishte, Godech, Dragoman, Slivnica Population maintained:70 000 inhabitance Municipality maintained: 6 number Year of realization: 2011 Facility type:Landfill for municipal waste (6 cells for municipal waste and 2 for CDW) Capacity: 839 600 m3 waste (phase 1) Amount of the investment:5 000 000 lv.

  20. BG PPP Examples Title of the project:MBT Beloslav State partner: Municipality of Beloslav and Varna Population maintained:358 324 inhabitance Municipality maintained: 2 number Year of realization: 2012 Facility type:MBT Capacity: 140 000 tone per year (50 t. per hour mixed MW) Amount of the investment:50 000 000 lv.

  21. THANK YOU FOR YOUR ATTENTION!!!

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