1. What is a Partnership
The Decree No. 61.371/15 defines a wide concept of partnership which can refer to any long term interaction between the private sector and the State of São Paulo to develop projects. Those must include both the rendering of public services and delivering of infrastructure. The main contractual alternatives for "Partnerships" in Brazil are Concessions and Public-Private Partnerships (PPP).
2. What are the main differences between the Brazilian Concessions and the Brazilian Public-Private Partnerships (PPP)?
Both Concessions and Public-Private Partnerships are contractual arrangements executed between the State and a Private Concessionaire, for the delegation of the exploitation and rendering of public services and delivering of public infrastructure.
In a Concession the risks arising from the agreement are assumed by the Private Concessionaire within the period provided forth in the agreement and the revenues are generated mainly by tariffs paid by the end users.
In accordance with the PPP Legislation, this contractual arrangement can only apply: (i) for rendering services which are not merely outsourcing; (ii) for projects costing above R$ 20 million; (iii) for contractual terms over 5 years and under 35 years; and (iv) when the project involves the rendering of services (and not only the delivering of a public work or infrastructure).
There are two kind of PPP: (a) Administrative Concession, by means of which the State is the main or the end user of the services provided. In this contractual arrangement, the revenues are mainly represented by the payments made by the public contractor; and (b) Sponsored Concession, by means of which, the Concessionaire is remunerated both by tariffs paid by users and by a complementary payment made by the Public Partner.
3. Why are the Partnerships so important?
They are important mechanism that could be useful to implement better infrastructure and render public services in a more efficient way. It is important to point out that the current legislation establishes that the services provided by the private concessionaire must be adequate, efficient and technologically updated. In addition, partnership agreements can set forth performance indicators to assure high qualitative standards, which shall be achieved by the concessionaire during the whole period of the partnership.
4. Brazilian Concessions and Brazilian Public-Private Partnership are ruled by which legislation (what are the bills of laws I should refer to in order to understand both of this contractual models)?
The applicable Federal Laws, which regulate such Partnerships, are:
(i) Concessions: Federal Law No. 8.987/1995
(ii) Public-Private Partnerships: Federal Law No. 11.079/2004
In the State Federative Level, you can consult the legislation presented below:
(i) Concessions: São Paulo State Law No. 9.361/1996; São Paulo State Decree No. 40.000/1995, São Paulo State Decree No. 41.150/1996
(ii) Public-Private Partnerships: : São Paulo State Law No. 11.688/2004; São Paulo State Decree No. 48.867/2004
(iii) Partnerships: São Paulo State Decree No. 61.371/2015, which sets forth the procedure referring to presentation, analysis and reception of studies submitted by the private sector or by the departures of the State Public Administration
5. Who is able to submit a partnership proposal (present studies)?
In accordance with São Paulo State Decree No. 61.371/2015, anyone is able to submit preliminary partnership proposals, either from the public or private (natural person or corporate entity) sector. It is relevant to notice that in order to submit it is necessary to demonstrate preliminary studies of economic, technical and legal feasibility.
6. What procedure should I observe to submit my preliminary partnership proposal?
The procedure is triggered by the submission of a project proposal, which shall necessarily be done by the Digital Platform of Partnerships. There are minimum information which shall be provided during the submission stage, such as preliminary demand analysis, preliminary cost-benefit analysis, explanation of the social and economic benefits expected, financial and technical information, investment needed and legal elements to demonstrate adequacy with the applicable legislation. Once submitted, the proposal will be analyzed by the competent public authorities and if approved will follow all the subsequent stages (determined by State Decree No. 61.317/15).
7. Which are the main public players involved in all the steps to deepen the partnership proposals and to develop all the studies needed?
The submission and the studies to structure the proposed project shall follow the procedure determined, step-by-step, by the State Decree No. 61.317/15.
Each of the stages requires the participation of representatives from different public bodies. Such representatives shall engage to promote a quick, organized and efficient conduction of the studies.
The partnership proposal shall firstly be analyzed by the representatives of the PPP Unit, who will examine the conformity with all the requirements which shall necessarily be presented by the proponent (minimum information defined by State Decree No. 61.317/15 and required by de Digital Platform of Partnerships). After the UPPP analysis, a Preliminary Analysis Committee will present a report to the competent authority, Management Council of PPPs - "CGPPP" or Destatization Program Board - "CDPED" (whose definition shall depend on the contractual arrangement, if a Concession or a PPP). This Preliminary Analysis Committee is composed by representatives from PPP Unit, Sectorial Regulatory Agency, State General Attorney, São Paulo Partnership Company - "CPP", State Secretariat, Treasury Secretariat, Planning and Management Secretariat, and the Sectorial Secretariat.
Following the procedure defined by the current legislation, if the report submitted by the Preliminary Analysis Committee is approved by CDPED/CGPPP, a Working Group will be formed (preferably with the same members of the Preliminary Analysis Committee) to coordinate the studies and to structure the proposed project.
8. Is there any scope limitation for the projects to be proposed?
There is no specification regarding the activities or the sectors related to the proposals (it can be related to either transportation, education, health, defense, urban mobility, sanitation and water supply, energy, and any other kind of economic activities, provided that they are subject to the constitutional responsibilities of São Paulo State Government).
When submitting your proposal you shall only keep in mind that any kind of projects should consider the long-term engagement of the Public Sector with Private Concessionaire, and the commitment to provide better services for the final users and the improvement of public infrastructure conditions. In addition, in order to submit proposals one shall present the minimum information required in the Digital Platform of Partnerships.
9. What are the formal requirements I should attend to submit a Partnership Proposal?
The following requirements shall be attended and will be examined by the PPP Unit in the conformity analysis:
10. Can a Foreign Company or Person submit a Partnership Proposal?
As stated before, anyone can submit "Partnership Proposals", which means that a foreign company or a foreign natural person is able to submit. However, as per the current legislation, and in accordance with the "General Attorney"s understandings, the proposals shall be submited in portuguese.
The reasons why the website is available in the English langage is to promote the duly comprehension of the procedure and other general information regarding São Paulo Partnerships.
