PPP Contracts In Argentina: Modifications To The Traditional Public Procuring Regime. Protection And Other Dispositions Of Interest To The Private Partner

Author:Mr Mario Eduardo Castro Sammartino
Profession:Castro Sammartino & Pierini

Different laws govern the Federal Public Procuring Regime in Argentina.

On the one hand, the traditional public procuring methods are regulated by Law Number 13,064 (Public Works), Law Number 17,520 (Concession of Public Works), and Decree Number 1,023/2001 (Public Procurement of the National Administration), and its regulation by Decree Number 1,030/2016.

On the other hand, the new Public – Private Participation Contracts (the PPP Contracts) established by Law Number 27,328, and is regulatory Decree Number 118/2017 (both legal dispositions, the PPP Regime), as an alternative new tool to try to boost infrastructure development in the country1.

The traditional public procuring regimes are based on certain legal principles that entitle the Procuring Authority to unilaterally exercise powers far exceeding those powers parties to a contract have under private law, such as to interpret the contract´s provisions, to modify the terms and conditions of the agreement, to impose sanctions, and to early terminate the contract based upon grounds of public interest, all without any judicial intervention.

To protect the Private Partner´s rights and attract investments that otherwise might be discouraged, the regulations on PPP Contracts in Argentina have introduced significant modifications to the traditional public procuring regime, suppressing or limiting the powers of the Procuring Authority. The PPP Regime brings about such significant changes to the extent of creating a brand new paradigm for public procuring in Argentina, as it will be explained below.

a) General legal regime of PPP Contracts in Argentina

PPP Contracts in Argentina are and alternative to the traditional public procurement methods. Therefore, no provision contained in any of the laws regulating such traditional public procuring methods will apply to the PPP Contracts, neither directly, nor in a supplementary or analogical way (Law Number 27,328, Article Number 31).

Before choosing the PPP Contract as the public procuring method for a particular project a comparative assessment must be run by the Procuring Authority. PPP Contracts may be entered into when it is previously determined that this contracting method allows fulfilling the public interest goals to be satisfied (Law Number 27,328, Article Number 1, final paragraph, and Regulatory Decree Number 118/2017, Annex I, Chapter I, Article 1).

b) Interpretation of the PPP Contract

The PPP Contract shall provide for procedures and methods to solve disputes on interpretation of the contract, technical or patrimonial issues (Law Number 27,328, Article Number 9, Section w), thus excluding any power of the Procuring Authority to interpret the contract by itself.

c) Modification to the PPP Contract

The Procuring Authority´s power to introduce modifications to the PPP Contract is tempered. In this line, the PPP Contracts must set out...

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