The concession bill contains sets clear rules for co-operation between private companies and the public sector. It also anchors the procedure for the selection of the supplies. The bill, designed to improve the quality of services and cut costs, is subject to approval by the senate. After that, it must be signed into law by the president.
The Local Development Ministry has said that a clear set of rules will boost transparency in public orders, support foreign investment and save public resources.
Although the bill has been passed, the World Bank has warned the MPs that increased fiscal risk threatens towns, regions and even the central government if PPP is implemented without sufficient scepticism and preparation. It pointed out the risk of a “moral hazard” - a type of market failure in which cities or regions with backing from the central government take on greater risks than if they lacked that backing.
The bill received input from PPP Centrum, a finance ministry-sponsored agency who feel the risk of market failure is well addressed by the Czech government. PPP Centrum has been negotiating with the World Bank to create a long term model of the country’s “fiscal space”, evaluating how much room exists in the governments budget to provide resources without jeopardising economic stability.
Now that the bill has been passed, pilot projects that have previously been in the advisory stage are now able to move into procurement.