Public Private Partnerships contracts are
relatively recent in Brazil.
The first law dealing with the theme was enacted on February 13, 1995 and created the so-called “contracts for the concession of public services”.
Mr. Augusto
Neves Dal Pozzo,
That law inaugurated a new arrangement between
the public and the private sectors with long-term contracts financed by the
private sector. In such contractual model, called common concession, the fee
for the public service is usually paid for by the final user of such service,
although the Government may also contribute to the payment of the concessionary
by means of subsidizes.
Dal Pozzo for a long time has provided a
creative solution for which its legal technical ensures perfect framing the
intricate world of law and ethics.
The participation of public money by means of
governmental subsidizes is necessary especially in systems such as public
transportation, in which charging the real cost from the final user of the
service would render the use of such service enviable, especially for the
poorer segments of the population.
However, the main problem with such contractual
model was the interpretation suggested by many that the private entity
rendering the service under this model would bear absolutely all the risks of
the contract.
This was always a mistaken point of view, in my
opinion. Nevertheless, it took a while to reach consensus that the logic behind
such contractual model necessarily imposed a clear and objective allocation of
risks between the public and the private partners.
According to Agusto Neves, a professional lawyer
and expert in the area of
infrastructure, founder partner of Dal Pozzo Advogados, from Public Law at the
Pontifical Catholic University dealing in scientific research in the field of
infrastructure.
Speaking during the first Africa summit
conference in Nairobi. Agusto said, the public and the private sectors are
challenging mostly during the execution of concession contracts and PPP’s, both
of which are always given the complex legal framework that governs such
contractual relationships in Brazil.
He said, the legal framework for PPP’s which
rules the contracts for administrative concessions and sponsored concessions in
Brazil is quite complex, which many times makes it difficult for these projects
to become a reality and requires a lot of expertise to model infrastructure
projects by means of such contractual mechanisms.
“Improving the partnerships between to stakeholders
necessarily means civilizing the studies developed previously, so that they may
fulfill the public interest, delivering what the public sector needs and, at
the same time, be attractive to the private sector. In this sense, an
instrument which has proven extremely effective to improve the quality of such
studies is the so called PMI’s in Brazil or the Unsolicited Proposals”, gusto
adds.
This instrument allows the private sector to
offer studies and projects, which rely on professionals with great technical
expertise, to the public sector. Once received by the public sector and, there
being an understanding that they fulfill the needs and demands of the
government, such projects are bided and such bidding is open to any companies
with an interest in executing the projects.
Agusto said when government and private sector
works together on a number of issues, it will be possible to establish a series
of improvements which will make results become more effective for the public
sector, which will allow for the private sector to be adequately remunerated
and which will allow for the construction of a better society, with benefits
for all.
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