EN Official Journal of the European Union C 15/23

Opinion of the Committee of the Regions on ‘Mobilising private and public investment for recovery and long-term structural change: developing public-private partnerships’

2011/C 15/05

THE COMMITTEE OF THE REGIONS ISSUES THE FOLLOWING RECOMMENDATIONS:

— The Committee notes in particular that PPP projects must not be seen as a short-term financing solution but must be evaluated from a lifecycle perspective, from planning, conception and funding right up to implementation and operation, by taking into account the fact that the total cost of a project depends on the project's total duration, which can sometimes be up to 30 years.

— The Committee does not believe that public-private partnerships are suitable in every context; an assessment should be made for each individual project, each public service and each innovation as to whether entering a partnership with the private sector will give added value.

— The Committee thinks that it is too soon for the Commission to regulate on service concessions. If the Commission decides nonetheless that service concessions are to be covered by the Community's procurement directives, it is extremely important that these rules be as simple and flexible as possible. In that case they should be guided by the provisions of the directives on public works concessions and on no account by the provisions governing procurement of services.

Rapporteur : Ms Catarina Segersten Larsson (SE/EPP), Member of the Assembly of Värmland County Council Reference document : Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on Mobilising private and public investment for recovery and long term structural change: developing Public Private Partnerships COM(2009) 615 final

I. POLICY RECOMMENDATIONS

THE COMMITTEE OF THE REGIONS

1. welcomes the intention of the EU and the Member States to implement ambitious recovery plans with the aim of stabilising the financial sector and containing the negative impact of the financial and economic crisis on ordinary citizens and the real economy. At the same time the Committee would emphasise the importance of regional and local authority involvement;

2. also believes that, in relation to these recovery plans, public-private partnerships (PPPs) can be an effective means of implementing infrastructure projects, providing public services and promoting innovation;

3. notes in particular that PPP projects must not be seen as a short-term financing solution but must be evaluated from a lifecycle perspective, from planning, conception and funding right up to implementation and operation, by taking into account the fact that the total cost of a project depends on the project's total duration, which can sometimes be up to 30 years;

4. does not believe that public-private partnerships are suitable in every context; an assessment should be made for each individual project, each public service and each innovation as to whether entering a partnership with the private sector will give added value;

5. calls on local and regional authorities to carefully examine any cross-border leasing schemes for financing public infrastructure or other PPP projects they may already have entered into or which they may be considering for the future, in order to avoid negative surprises and serious repercussions for their budgets;

6. notes that financing approaches vary between the different Member States. In some Member States, for example, it is possible for local authorities to borrow and finance major investment themselves. Since situations are so different, the Committee of the Regions considers that public-private partnerships can be used only in certain cases to manage public money more efficiently and implement large projects more effectively;

7. is of the view that public-private partnerships can provide an effective way of managing public investment, but it should be for local and regional authorities to judge which method is most appropriate for any given project, public service or innovation. An important prerequisite for public-private partnerships is to assess which body or bodies are best able to bear the various risks;

8. believes that the EU Structural Funds or the European Investment bank (EIB) can under certain conditions provide funds which may be used to support public-private partnership projects;

9. agrees that public-private partnerships can provide one means of overcoming problems caused by climate change. It also agrees that they can be a way of improving growth and employment in EU industry and the public sector;

10. emphasises how important it is to make it easier for small and medium-sized enterprises to be involved in public-private partnerships; SMEs are often an underutilised resource in promoting economic growth and creating long-term job opportunities;

11. it is often also local and regional authorities that are best placed to assess how public services should be funded. The Committee points to the various roles played by the municipalities and regions; as well as organising, managing and monitoring external operations, they run services in-house. Local and regional authorities should clearly define the objectives to be attained in terms of public interest, the quality of services provided and pricing policy, as well as monitoring compliance with these objectives;

12. has observed that the idea of partnership has come to be interpreted much more widely than was originally intended, and it therefore proposes that public-private partnerships in future be defined more narrowly, to mean long-term relationships, joint risk-taking and major financial commitment. The Committee therefore considers that it is extremely important to better define the concept of public-private partnership, in order to ensure an appropriate debate about any future Community initiatives;

Position of the Committee of the Regions on the Commission's proposals for five key actions in 2010

Setting up a working group

13. believes it is important to establish a system of international support and experience-sharing given that the number of public-private partnerships is increasing. However, the Committee stresses that circumstances vary widely in the Member States and that one prerequisite for successful public-private partnerships is that they should be developed in accordance with local and regional conditions. Support and know-how should therefore be provided for in the different Member States;

14. considers that if any relevant body or group is set up at EU level, it is extremely important for local and regional authorities to be represented in it and for the Committee to have the opportunity to designate the representatives concerned;

Proposal to work with the EIB to increase funding available for PPPs

15. believes that the utmost care must be exercised in any major investment project so that local and regional authorities and private businesses do not find themselves in an untenable position vis-à-vis repayment, given that partnerships involve very long-term financial commitments. The Committee regards the EU Structural Funds as an important asset for public-private partnerships. The Committee thinks that the EIB, should play an increasingly important role in helping to create the basis for effective and innovative PPPs;

Proposal to review the relevant rules and practices in order to ensure that there is no discrimination in the allocation of public funds, where Community funding is involved

16. values the efforts of the Commission to safeguard at EU level the fundamental principles of the Treaty establishing the European Community - such as transparency, equal opportunities, proportionality and mutual recognition - in the award of public contracts and concessions;

17. The Commission could do even more to create scope for PPPs in public procurement law.

Proposal for a more effective framework for innovation, including the possibility for the EU to participate in private law bodies and directly invest in specific projects

18. The question of EU involvement in bodies governed by private law or direct investment in specific projects must be discussed and clarified before the Committee can take a well-reasoned position, and an assessment must also be carried out to establish compliance with the subsidiarity principle.

Intention to draw up a proposal for a legislative instrument on concessions, based on the ongoing Impact Assessment

19. thinks that it is too soon for the Commission to regulate on service concessions. If the Commission decides nonetheless that service concessions are to be covered by the Community's procurement directives, it is extremely important that these rules be as simple and flexible as possible. In that case they should be guided by the provisions of the directives on public works concessions and on no account by the provisions governing procurement of services;

20. believes that future development of PPPs should not reduce opportunities for offering jobs to people with special needs, in accordance with rulings of the EU Court of Justice.