The PPP Office in Spain, beyond words - MVA Asociados
- MVA Asociados
Last Thursday, October 10th, Gervasio Martínez-Villaseñor, Partner in the Public Law Area of MVA Asociados, a Spanish legal firm specialised in infrastructures and PPP, took part in the debate over the Public-Private Partnership Office (PPP Office) organized by the Club PPP of the Instituto de Empresa (iE), a leading Business School.
Along with Gervasio Martínez, other panellists participated, such as Juan Alfaro, President of the Spanish Company for Land Transportation Infrastructures (SEITT), a Government infrastructure company, Miguel de la Fuente, President of the Foro PPP, an infrastructures lobby, and Adolfo Menéndez, from Uría&Menéndez, a leading Spanish legal firm.
The panellists reviewed the present situation of infrastructures in Spain and the reality of public-private partnership, explained, sometimes starkly, the factors which have most contributed to it, and finally reached the conclusion (maybe paradoxical) that is now, in the economic crisis, when Government is thriving to reduce its size and therefore is expected not to expand nor create any new body or organization, when implementing the PPP Office is more necessary.
Thus the main aspects the PPP Office must meet were outlined during the interventions, and can be summarized as follows:
- The PPP Office must be hundred per cent public (panelists unanimously agreed in this point), and it is due to maintain an intense dialogue with private sector, either with construction or financial companies, not only about the problems the infrastructures sector confronts but also about the specific matters of every single project, struggling to align interests for the common aims of the sector (which involves public interest since Government is one of the main actors).
- The PPP Office must be a forum where players share their experience, and where successes and failures are studied, in order to extract the best practices, standardize processes and compile useful guides and specifications. All in all, it must provide stability and legal certainty to infrastructures projects.
- The PPP Office must also develop a role as an advisor, mainly to Government bodies, about the opportunity and necessity of the projects to bid, providing a global view and streamlining the number and kind of projects that are carried out in all Spanish territory, irrespective if it is the central Government or the regional or local Governments which promote (and possibly finance) it. In this regard, it would be positive if the PPP Office were entitled to be at least consulted before any public body tendered an infrastructures project.
- Finally, the PPP Office must be the vehicle which provides advice on the accurate share of risks between public and private partners, so that every part assumes only the risks it can efficiently manage. Therefore, opportunistic reasons for implementing a PPP such as minimizing the impact of the infrastructure in the public deficit or subsidizing the lack of public funding could be avoided.
Due to the particular complexity of the Spanish territorial organization, the panellists agreed during the debate the PPP Office ought to be created by central Government. In this way, even though it may gather the opinions of different Administrations and public bodies, which might be consulted by the PPP Office, it could guarantee a unique criterion for every project, so that the errors incurred in the past, when every contracting authority designed the infrastructures projects on their own, are minimized (or fully avoided). Thus the PPP Office shall also contribute to the effort of Spanish authorities of enhancing the image of Spain and the Spanish infrastructure sector as a whole all over the world.
The PPP Office may be soon implemented in Spain, and last Thursday's debate was another step forward.