Lithuania amends PPP rules

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Lithuania amends PPP rules

The Lithuanian Government has approved amendments to rules for the development and implementation of public private partnership projects (PPPs).

The amendments are aimed at improving the procedures for the implementation of PPPs and accelerating the whole process. The new rules will simplify the requirements when preparing a PPP project. New terms for drawing up and evaluating PPP documentation will be established and the whole decision-making process, including new deadlines for approval, will be fixed. For example, project owners will have to begin procurement procedures on a project within 120 days of governmental approval. Moreover, the period of time taken by the relevant authorities to assess and approve project documentation (such as questionnaires and tender documents) will be fixed, with the aim of improving the quality of the documents submitted.

The European Bank for Reconstruction and Development (EBRD) already recognises Lithuania's regulatory and institutional framework for PPPs as following best international practices. With approval procedures streamlined and implementation efficiency improved by the new amendments, the attractiveness of Lithuanian PPPs for both local and foreign investors should increase even further.

Another feature of the reforms is the expansion of the functions assigned to the PPP Commission. Until now, the PPP Commission's sole function was to decide whether to submit a project to the Government, having evaluated its potential expediency. From now on, the commission will scrutinise the annual reports of PPPs already contracted, submit proposals to the Government regarding public-private cooperation, and make appropriate offers to public authorities implementing PPPs. A representative of Invest Lithuania is also joining the Commission.

Jonas Kimontas, deputy director of the Project Management Department of Invest Lithuania, says the recent legislative amendments will bring a range of improvements. He stated:

"Entities implementing PPPs will benefit from these new rules as the Government will approve projects faster. Furthermore, the maximum value of PPP project will be approved as NPV of risk adjusted Public Sector Comparator which will allow better assessment of bids in terms of value for money."

Three PFI type PPP contracts have been signed in Lithuania in recent years, and four projects in the transport infrastructure and public order and security sectors are currently in the procurement stage. Jonas Kimontas notes that thanks to strong government support, up to 10 potential PPP projects for social infrastructure are in the pipeline. Data from Invest Lithuania shows that one in every two local and central public authorities in Lithuania intends to invest in infrastructure projects using PPP models in the future.

This year we have reported about several PPP projects in the country, most of them in Vilnius. They are, among others:

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