Karanovic & Partners held a webinar dedicated to the Implementation of the Law on Private-Public Partnerships in Montenegro (“PPP Law”). The webinar was produced in cooperation with the Montenegrin Foreign Investors Council.
Speakers – Senior Partner Darko Jovanović, Senior Associates* Milena Rončević Pejović and Mina Srećković and a representative of the Ministry of Finance of Montenegro Jelena Jovetić – presented their views on the novelties of the law.
The long-awaited law regulating public-private partnerships (“PPPs”) was adopted at the end of 2019 and will be applicable as of July 2020. This law will be the first to address PPPs in a wholesome manner, as until now the subject had been scattered across several pieces of legislation. Along with this new legislation, the amended and revamped Law on Concessions will also begin to apply mid-2020 with a large portion of its subject matter being transposed in the PPP Law.
The new PPP law regulates several key factors of major importance for PPP project development and implementation. For example, areas in which a PPP can be developed have been identified, as well as a framework essentially providing for the delivery of various models internationally recognized to fall under the known PPP structures – DBO, DBMO, DBMOT, BOT, etc. Key contractual terms such as those related to subcontracting, the liability of a private partner/SPV, financing, taking security, and termination have all found their place in the PPP Law.
“Having an effective legal framework is a precondition for creating an environment that supports private investment in infrastructure”, said Senior Partner Darko Jovanovic
From an international perspective, the things that determine the success rate of implementing PPPs are appropriate institutional capacities and support from the beginning stages throughout the implementation of a PPP project. To this end, the new PPP Law also introduces the Montenegrin Investment Agency, established with the goal of promoting and monitoring the realization of public-private partnership and investments.
“As the time frame within which the PPP Law will begin to apply approaches, it will be important to monitor the appetite of the business community for seeking alternative means of private sector involvement in public infrastructure/services projects, as well as the pace at which institutional capacity building will occur”, said Senior Associate Mina Sreckovic.
The ensuing months will also mark the adoption of a set of by-laws intended to set the PPP Law in motion. We will continue to keep a watchful eye on further developments in Montenegro as they come.