Promulgation in the Republic of Congo of a law on public-private partnership contracts
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On 12 January 2023, the President of the Republic of Congo promulgated Law No. 88‑2022 on public-private partnership contracts (the "Law No. 88‑2022").
By introducing a sui generis legal instrument distinct from public procurement contracts, Congo is implementing a policy of openness towards foreign private investors already initiated by the creation of the Ministry of International Cooperation and Promotion of the Public-Private Partnership, as well as the holding of an international forum on the same topic.
This law defines the rules for awarding public-private contracts, the criteria for awarding them, the clauses of these contracts, and, in the context of the execution of the contracts, the rights and obligations of the public entity, the rights and obligations of the private partner, and the terms and conditions for terminating the contract.
- Law No. 88‑2022 provides that the award of a public-private partnership ("PPP") contract is subject to the principles of 'freedom of access, equal treatment, objectivity, competition, transparency and respect of the rules of good governance'. This freedom of access is, however, conditional on the private partner being a legal person under Congolese law.
- PPP contracts are initiated by public entities, which must first justify the need for this type of contract and submit a pre-feasibility and feasibility study.
- The legislator retains four procedures for awarding a PPP contract, one under ordinary law: the call for tenders (appel d’offres); and three derogatory procedures: the competitive dialogue (dialogue compétitif), the direct agreement (entente directe) and the spontaneous bid (offre spontanée).
- Law no. 88-2022 specifies that in addition to the overall cost of the offer and the performance objectives of the contract, the contracting public entity will also evaluate the technical, aesthetic, functional, innovative and sustainable quality and the social impact of the project, particularly in terms of local employment.
- Once selected, the contract holder will have to set itself up in the form of a project company under Congolese law, the form of which is provided for under OHADA law. The company's corporate purpose will be limited to the execution of the PPP contract.
- Law No. 88‑2022 provides a common framework for PPP contracts by specifying the mandatory content of such a contract and the respective obligations of the contracting public entity and the private partner.
- Law No. 88‑2022 allows the private partner to subcontract part of the tasks assigned to it; the subcontracting must be notified to the contracting public entity. Also, subject to approval by the contracting public person, the private partner has the right to assign all or part of the contract.
- Law No. 88‑2022 grants the contracting public entity prerogatives of public power (prérogatives de puissance publique) that allow it to substitute the private partner. This prerogative can only be exercised in the event of "force majeure or circumstances of public order". These circumstances are assessed on a de facto basis. Consequently, the public authority must justify this decision in the light of the situation in question. In the event of improper exercise of this prerogative, the public authority is liable to pay damages.
- In terms of dispute settlement, Law No. 88‑2022 favours amicable settlement and allows recourse to international arbitration bodies. However, the dispute may also be brought before the State courts.
- Law No. 88‑2022 establishes an institutional framework for the planning, preparation, entry into and execution of these contracts. It is composed of five bodies: the national PPP committee, the technical committee, the permanent PPP secretariat, the PPP contracting commission, and the PPP control commission. Independently, PPP contracts can be audited by the Court of Auditors and Budgetary Discipline (Cour des comptes et de discipline budgétaire), the High Authority against Corruption (Haute autorité de lutte contre la corruption) or an independent auditor appointed by the parties to the contract.
- Law No. 88‑2022 introduces a specific regime in terms of property law which creates a distinction between "return" property (biens de retour), made available to the private partner by the public entity, and "takeover" property (biens de reprise), which the partner may transfer to the public entity for a consideration. The qualification is discretionary and is established according to the indispensability of the asset for the performance of the public service mission.
- Law No. 88‑2022 grants the private partner the right to grant security interests and guarantees on the constructed works and equipment.
- Law No. 88‑2022 allows the private partner to benefit from a financial, fiscal and customs regime that derogates from ordinary law standards. These regimes are essentially consensual and will be negotiated according to the specificities of each project. The law specifies that "additional fiscal and customs advantages may exceptionally be granted by the Minister of Finance".
While PPP contracts entered into before the entry into force of Law No. 88‑2022 are governed by the provisions in force at the time of their conclusion, PPP contracting procedures initiated before the entry into force of Law No. 88‑2022 will be submitted to the PPP Technical Committee for assessment and assent, and then to the PPP Contracting Commission for approval.
In addition, the government has yet to specify, by decree, how the procedures for awarding PPP contracts are to be implemented.
Another challenge will be the effective establishment of the institutional framework bodies to avoid delaying the application of this law.
Promulgation in the Republic of Congo of a law on public-private partnership contracts (French)
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