Infrastructure Projects Facility Technical Assistance Window (IPF TA ...

Infrastructure Projects Facility – Technical Assistance Window
Sub project: WB4-MNE-ENV-12B: Management Models and Options for Cost Recovery for the Future Construction and
Operation of Regional Landfills in Montenegro
31
ning and Construction of Objects. This law cancelled significant local government
revenue – fees for use of construction land – which has jeopardized the
implementation of another significant local revenue: fees for land development
(compensation for setting communal infrastructure on the land), which was established
in the Law on Financing Local Self-governments.
4.4.9 Law on Participation of Private Companies in Public
Services
The Law on Participation of Private Companies in Public Services 19 , which applies
to all public institutions, provides a framework for intensification of participation
of the private sector in the areas of general significance for the society,
and application of public services in relation to leasing and management
contracts, including build-operate-transfer (BOT) arrangements. This Law, together
with the Law on Concessions, provides general arrangements for several
instruments that could be used for planned action and private capital to revitalise
the infrastructure of the state/local governments despite the lack of funds
from the budget for participation of the private sector in public services, for the
betterment of government/local governments. These areas are:
Public-private-Partnership (PPP) 20 : a private investor can undertake construction
on a given site and use it for pre-defined number of years, but it needs to
transfer the ownership after the completion of the pre-defined timeframe by
which the public interest is protected. With such arrangements, private companies
bring profit to the local governments, which resource was previously exploited.
The Law envisioned that PPPs can be concluded only on the grounds of
a public call made by a public institution (Article 15 of the Law).
From 2002 to 2009, the Law on participation of the private sector in the procurement
of public services regulated the area of concessions. With the adoption
of the Law on Concessions in 2009, certain provisions of the Law on participation
of the private sector in the procurement of public services ceased to
be applicable (Provisions of chapters IV, VII, VIII, IX and articles 141, 142 and
143 Law on participation of private sector in the procurement of public services,
as well as the provisions of other chapters related to concessions and
BOT arrangements ceased to be applicable. Provisions of other laws regulating
the allocation of concessions will not be applied if contrary to this law).
Procurement of public services leasing (articles 55-63) can be used for: existing
public infrastructure that requires repair, existing public enterprises not requiring
repair, or for infrastructure that will be of public use. The private investor
bears the costs of insurance and maintenance, while the insurance agreement
is integrated in the lease agreement. The investor or the operator cannot benefit
from subsidies, or use the public funds for repair for personal gain. (“activities
19 Official Gazette GoM No. 30/02 from 26.06.2002 and No. 08/09 from 04.02.2009
20 Institut Alternativ, with support from Open Society Institute, Public-Private Partnerships in Montenegro:
Accountability, transparency and efficiency
.