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Public-private partnership

About #PPP

Public-private partnership is a mechanism by which the public sector acquires and implements public infrastructure and/or services, using the resources and expertise of the private sector. In situations where governments are faced with outdated or insufficient infrastructure and the need for more efficient services, partnerships with the private sector can contribute to the development of new solutions and enable funding.

A public-private partnership combines the skills and resources of the public and private sectors through the sharing of risks and responsibilities. In this way, governments can tap into the expertise of the private sector while focusing on policymaking, planning and regulation, delegating day-to-day operations.

A careful analysis of long-term development goals and risk distribution is necessary for the success of a public-private partnership. Also, the country’s legal and institutional framework must support this service delivery model and provide effective mechanisms for managing and supervising PPP projects.

Until the adoption of the Law on Public-Private Partnership and Concessions, the concession model of public-private partnership governed by the Law on Concessions from 2003 was dominant in Serbia.

With the adoption of the Law on Public-Private Partnership and Concessions in 2011, the concept of public-private partnership was introduced into the legal system of the Republic of Serbia. The adoption of this legal framework and the improvement of procedures contributed to the creation of a better environment for the implementation of public-private partnership projects.

There are two forms of cooperation between the Public and Private partners:

  • A contractual public-private partnership is a public-private partnership in which the mutual relationship between the Public and Private Partners is governed by a public-private partnership agreement
  • Institutional public-private partnership is a public-private partnership based on the relationship between the Public and Private partners as founders, that is, members of the joint business company, which is the bearer of the implementation of the public-private partnership project.

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The Law on Public Procurement is crucial for public-private partnerships, as it ensures compliance with the principle of competition, thus ensuring equal conditions for all participants. This achieves greater transparency and efficiency in PPP.

The law promotes economical and efficient management of public resources, guaranteeing the selection of the most favorable conditions and optimal use of funds. Its application brings legal certainty, setting clear rules and procedures for the selection of partners, thus avoiding disputes. Open competition encourages quality and innovation, and transparency reduces the risk of corruption, protecting public resources.

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The law on communal activities defines that the local self-government is obliged to provide high-quality and continuous services of general importance, and the supervision of this remains within its jurisdiction.

The provisions of the Law on Public-Private Partnerships and Concessions are applied to the procedure of entrusting the performance of utility activities, the financing of which is provided from the budget of the local self-government unit, that is, the financing of which is provided in whole or in part by the collection of fees from users of communal services. This is important because it allows the private sector to be involved in the provision of utility services, while respecting laws and standards.

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