Hopes that after 20 years of democracy Bulgaria is finally ripe for profitable public-private partnership, was probably slightly premature. The reason is that in late summer the government approved a bill which had to settle the relations between government and business but it crashed fatally. Already in its first reading by the legal committee of the National Assembly last week it became clear that it was unsustainable and will need to be rewritten again. Terms to do so were not fixed and there will be no wonder is the document remains on the shelf at least until the next general elections. Politicians certainly will then again think about the benefits of cooperation with the private sector and will still promise the general public that this will be among their main priorities when they are elected to power.
Indeed, the reasons for the public-private partnership bill to fail were more than trivial. It turned out that there are texts
that are legally unacceptable,
allow for abuse and in practice would not work if passed in the form presented. It is interesting that so far nobody saw these problems. After all, all the ministers en masse were in favour of it? Moreover, FinMin Simeon Dyankov explained that in its preparing experts from all ministries were involved and the final version has been previously shown and debated in the European Commission. I hope that this will be one of the priority bills to be discussed in Parliament, because it really will unlock much greater investment opportunities in areas in which Bulgaria has never done well, said at its voting by the Council of Ministers Financier Number One.
It seems that this were only good intentions and just words. The proposed bill is of 19 pages and its transitional and final provisions are 20 pages that turn upside down the Concessions Act, said Luben Kornezov, MP of the socialist party at the discussion on the project at the Parliament’s legal committee. In practice, it thus could reintroduce the competitive procedures competitive dialogue and negotiations with announcement for concluding a concession. The current rules now only admit as a procedure open tenders. But due to lack of flexibility it prevents one from selecting a private partner in more complex cases from a legal or financial perspective, the motives of the draft bill read. However, the truth is that the proposed amendments may be one
very convenient loophole
for dancing with certain individuals or companies. Competitive dialogue is a combination of a restricted procedure and a negotiated procedure, the contracting authority having only a general idea of the nature of the order, but does not know how to accomplish it. So often this opens the possibility of favouring a candidate. Indeed, the commission and the authority which organizes the competition, ensure equal treatment for all participants, including not to provide information that may discriminate some against others. As a matter of fact all this has repeatedly proven to be only wishful thinking and there is no guarantee that in future things will change.
Indicative of the quality of the document is that Iskra Fidosova of the ruling GERB also expressed criticism of it. If adopted in its current form, the government draft bill will cause havoc in a number of laws. It repeals legal texts in state and municipal property acts without spelling out what happens on the place of the repealed regulations, said the chair of the legal committee. In her words, the objects and activities subject to public-private partnership completely overlap with those listed in the Public Procurement Act, which allows for abuse because it is unclear when one law will be applied and when the other regulations are to be followed.
According to the plans of the Cabinet
partnerships with business should be applicable to all objects of social infrastructure (hospitals, schools, kindergartens, prisons, sports facilities, social housing, etc.). That group includes also the free to users ongoing maintenance of roads in winter, railway stations, railway infrastructure sites, collection, disposal and recycling of household waste, etc., and all other contracts for services of public interest where due to the requirement for affordability of services the public sector need to bear some of the costs. Now those activities are conducted following auctions under the Public Procurement Act and it therefore creates confusion in the legislation.
Beyond doubt is that public-private partnership should be regulated by law. Firstly, combining the limited funds of the public sector with the financial capacity of private sector funds will help
increase investment
in technical and social infrastructure, services, and research and development… Through public-private partnership one ensures a better quality of service, because if a project is not implemented well, the investors will recover their investments. For comparison – in public procurement contractors have no interest whether they meet the quality standards, but rather – they are interested in getting their money paid. Unpleasant is that the above benefits of the public-private partnerships can be turned 180 degrees when it comes to Bulgarian reality. Therefore, the business relationship between the government and the private sector in this country has always been frowned at. On the one hand, behind such links usually may hide all sorts of corrupt schemes and creeping personal interests of the people in power, on the other – once feeling the burden of working with the government (that delays payments to corporations) businesses do not want to hear about cooperation with the state any more.
