Egypt: Public Private Partnership -Questionnaire

user Youssry Saleh & Partners calender 30 Jul 2023 views 580 Views
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Does the country have a special act dealing with concessions or a broad statute including the legal framework for Public Private Partnership including concessions?

 In Egypt, there are laws governing the relationship between entities in the private sector and public sector “Public Private Partnership”; which are as follows:

  • Egypt Concession Law No. 67/2010 enacted the legislation governing public-private partnerships in infrastructure projects, services, and public utilities;
  • Law No. 61/1958 concerning granting concessions related to the investment of natural wealth resources and public utilities and amending concession conditions;
  • In addition to special decrees and legislations for the sectors.

Does any national legislation, either a special act or a generic Public Private Partnership Law, exist in Private Financing Initiative (PFI) permits?

According to the authority granted by the laws to the Administrative Authorities, the Administrative Authorities have the right to enter into “PPP” contracts with private sector companies under which a Project Company is tasked with financing, constructing, equipping, and operating infrastructure projects and public utilities, as well as making their services available, or financing, and rehabilitating such utilities with an obligation to maintain what has been constructed or rehabilitated, as well as providing services and facilities required for the project to be capable of production or service. The Project Company shall not start collecting payments in exchange for the sale of products or the availability of services in line with the performance levels specified in the PPP contract until the contractual Administrative Authority has approved the contract and the authority issues a certificate recognizing the degree of quality of works, products, or services, provided the PPP contract may permit the Project Company to manage the project and deliver the service or product to the Administrative Authority, which would then give the service or product to the end beneficiaries or consumers.

Does the country have a government contracting law; is it evident how much it contributes or does not contribute to the granting of a Public Private Partnership?

PPP contracts will not be subject to the provisions of Law No.129/1947 concerning Public Utility Concessions, Law No. 61/1958 concerning Concessions relating to the Investment of Natural Resources and Public Utilities, Public Tenders Law No. 89/1998 Regulating Tenders and Bids, and any specific laws on granting public utility concessions.

Does the Egyptian law state which law that has to be applied to grant the Public Private Partnership in each given Authority, does the country have certain law in accordance with the PPP?

Yes. If any of the PPP Law’s conditions are not satisfied, the Private-sector Laws shall apply. For instance, the electricity industry is run by State-owned private companies. According to the law, these private enterprises do not fit the definition of an administrative entity. As a result, companies are unable to provide a project under the PPP Law and must instead rely on Sector Specific Laws.

Has the nation legislated laws that would guarantee competition and equal treatment in the PPP?

Negotiations with a selected bidder may be held over various technical and financial conditions, clarifications, and specifications. Those talks shall have no bearing on any contractual requirements specified in the invitation to bid as non-negotiable or conditions for which the bidder made no reservations in its submitted proposal. There will be no changes to the technical and financial terms, which will result in a decrease in the terms included in the bid and on which the bid was assessed.

Is it possible that most project conditions may be negotiated under the law? If so, does the standard PPP agreement represent a list of obligatory material requirements that must be stipulated in the agreement, the details of which may be negotiated?

A list of substantive requirements to be discussed and incorporated is provided. Please, bear in mind that there is currently no model PPP contract. The Supreme Committee for PPP Affairs has jurisdiction over the following:  Issuing PPP guidelines and general criteria, as well as authorizing typical PPP contracts for usage in various industries. Please, bear in mind, however, that the governing legislation cannot be anything other than Egyptian law. There are also certain sections that may be discussed and others that cannot be changed as a consequence of the request for proposals. Negotiations with the selected bidder may be held over various technical and financial conditions, clarifications, and specifications. Those talks shall have no bearing on any contractual requirements specified in the invitation to bid as non-negotiable, or conditions for which the bidder made no reservations in its submitted proposal. No changes shall occur to the technical and financial terms, resulting in the decrease of terms contained in the proposal and on which the bid was assessed.

 Does the law mandate that only exceptional situations (such as the failure of the contracting organization or a force majeure occurrence) be allowed to renew or extend the scope of the Project Agreement?

Without prejudice to Article (2) of this legislation, the PPP contract may contain provisions for its renewal. However, if a PPP contract with a term of more than thirty years is essential owing to a major public interest, the Cabinet may consent to terminate it based on the advice of the Supreme Committee for Public Private Partnership Affairs.

Can the Private Party impose tolls or charges for utilizing the resource or its services under the law?

“Operation”: Administration of the project, subject of the PPP contract, by the Project Company in all financial, administrative, and technical aspects, as well as delivery of goods or provision of services to the Administrative Authority in connection to the project, in exchange for the payment agreed upon in the PPP contract, or in accordance with the criteria and rules established in the PPP contract.

“Utilization” means management of the project, subject of the PPP contract, by the Project Company in all financial, administrative, and technical aspects, as well as the sale of products or offering of services related to the project directly to whomever the Administrative Authority specifies, in accordance with the conditions and terms of the contract, provisions authorized by the Supreme Committee for Public-Private Partnership Affairs, and in line with the terms and norms agreed upon in the PPP contract. The tariff structure is therefore left to the PPP contract, but the Administrative Authority has the authority to change the construction, equipment, rehabilitation, and other work conditions, as well as the services availability, and payment agreed upon in the PPP contract. If the PPP contract includes the Project Company’s right to operate or utilize the project, and if it is necessary to the public interest, the Administrative Authority has the authority to alter the norms of operation or utilization. Product or service prices are included in usage. These modifications will take place only within the scope agreed upon in the PPP contract and under the approval of the Supreme Committee for Public Private Partnership Affairs, and without prejudice to the Project Company’s or Administrative Authority’s (as the case may be) right to compensation under the terms and conditions of the PPP contract. If the product’s selling price or the service provision payment is changed, the change will not be retroactive.