PUBLIC-PRIVATE PARTNERSHIP PROJECTS

A Public-Private Partnership (PPP) refers to collaboration between a public and a private partner to finance, construct, operate, or maintain infrastructure of public importance, or to deliver services of public interest. Under a PPP, the private partner assumes responsibility from the public partner for construction, reconstruction, maintenance of public infrastructure or facilities, or provision of public services within the public partner’s jurisdiction. The subject of a PPP cannot be exclusively commercial use of public goods or provision of goods alone. In return for assuming these obligations, the public partner grants the private partner certain property rights, a concession, monetary compensation, or the right to collect fees from end users. PPPs may be contractual or institutional, in accordance with the Law on Public-Private Partnerships and Concessions of the Republic of Serbia.

In a contractual PPP, with or without concession elements, mutual rights and obligations are regulated through a public contract. An institutional PPP, on the other hand, involves establishing a joint company by the public and private partners to implement the PPP project.

A concession is a contractual or institutional PPP in which commercial use of a public asset or activity of general interest is regulated by public contract. The public partner grants the private partner rights for a specified period under prescribed conditions, with payment of a concession fee, while the private partner assumes all risk related to commercial use of the concession. Special forms of concession include public works concessions and public service concessions.

Public entities (state bodies, public companies, or legal entities performing activities of general interest) have the right to independently initiate a PPP project or consider proposals from interested parties. The selection of a private partner is carried out either through a public procurement procedure (as defined by the Public Procurement Law) or through a concession award procedure (as defined by the Law on PPPs and Concessions).

A PPP project proposal must include a business plan, covering cost estimates and a value-for-money analysis, in line with the methodology prescribed by the PPP Commission. It should also include an economic efficiency analysis and the financial impact of the project on the budgets of the Republic of Serbia, autonomous provinces, or local self-governments.

The Public Sector Comparator (PSC) is a tool used to compare total lifecycle costs of a PPP project with traditional public sector delivery. Preparing a PSC involves:

• Projecting capital and operating costs for both alternatives (PPP vs. traditional public delivery)
• Projecting revenues (for both alternatives)
• Calculating Net Present Value (NPV) and Internal Rate of Return (IRR) as key profitability indicators (for both alternatives)
• Conducting sensitivity and risk analysis (for both alternatives)
• Comparing alternative options

For PPP projects with concession elements, the public entity appoints an expert team to prepare tender documentation, assess concession value, prepare a feasibility study, and perform all preparatory actions. Based on economic, financial, social, and environmental assessments, the public entity submits a concession proposal to the relevant authority (government, provincial administration, or local assembly). The feasibility study considers public interest, environmental impact, working conditions, protection of cultural heritage, and financial effects on relevant budgets.

Our team provides comprehensive support to public authorities and private investors, including PPP impact analysis, Public Sector Comparator preparation, and concession feasibility studies, ensuring successful project planning and implementation.

Contact Us:
plan@alderman.rs