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New rules in Ireland support PPPs, says Office of Government Procurement

New guidance issued by the Office of Government Procurement (OGP) has opened the door to the establishment of new public-private partnerships (PPPs) in Ireland.08 Feb 2018

The OGP said that laws set out in the EU's Concessions Directive "will facilitate the conclusion of concessions and, therefore, of public-private partnerships (PPP), encouraging new investments, promoting a quicker return to sustainable economic growth and contributing to innovation and long-term structural development of infrastructures and services".

The OGP issued its information note on the Concessions Directive issued alongside an additional note on the application of concessions contracts in Ireland, and a new National Public Procurement Policy Framework. The NPPF sets out the entire procurement framework in Ireland, including the concessions regime.

A concession contract is a form of public sector contract under which the winning bidder for that contract is granted a right by the contracting authority to exploit the work/services to be carried out under the contract in order to make a return on the investment that supplier makes to carry out the contract. One example might be where a company is contracted by a government agency to build a new toll bridge.

The OGP said, however, that the rules stipulated in the Concessions Directive are likely to apply to a minority of procurements in Ireland, predominantly in the context of "large-scale complex contracts" in the infrastructure sector, and that most procurements for public contracts will continue to be subject to the standard rules on public procurement, which also stem from an EU directive.

"While the Concessions regime is designed to provide a flexible procurement model to match the dynamics of the concessive-type contract, it should be applied carefully and where it can be clearly demonstrated that the contract lies within the scope of concessive contracts and is distinct from the circumstances applying to standard public contracts," the OGP said in its note on the application of concession contracts.

Procurement law expert Caroline Ramsay of Pinsent Masons, the law firm behind Out-Law.com, said the guidance published by the Office of Government Procurement on the application of the Concessions Directive in Ireland was "useful" and provided clarity on the issue and that it "can only be welcomed by bidders for large scale infrastructure projects and their advisors".