On Public-Private Partnership


Published: 2009-11-11

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Consolidated version as of 28-11-2015
 
 
 
 
Government of the Republic of Lithuania
 
 
 
RESOLUTION No 1480
 
 
 
ON PUBLIC-PRIVATE PARTNERSHIP
 
 
 
11 November 2009
 
Vilnius
 
 
 
Pursuant to Article 13(1)(10) and Article 152(8) of the Law of the Republic of Lithuania on Investments, Article 281(1) of the Law of the Republic of Lithuania on Concessions and Articles 22(15) and 27 (1), (4) and (5) of the Law of the Republic of Lithuania on the Government, the Government of the Republic of Lithuania has resolved:
 
1. To approve the Rules for Drafting and Implementation of Public-Private Partnership Projects (as appended).
 
2. To form the Commission for Public-Private Partnership Projects (hereinafter referred to as “the Commission”):
 
Chancellor of the Government (Chairperson of the Commission);
 
Vice-Minister of Finance (Deputy Chairperson of the Commission);
 
Advisor to the Prime Minister;
 
representative of the Office of the Government of the Republic of Lithuania;
 
representative of the Ministry of Finance;
 
representative of the Ministry of Transport and Communications;
 
representative of the Ministry of Economy;
 
representative if the Ministry of Justice;
 
representative of the Lithuanian Department of Statistics;
 
representative of the public institution Central Project Management Agency;
 
representative of the public institution Invest Lithuania.
 
3. To establish that the Commission:
 
3.1. shall submit proposals to the Government of the Republic of Lithuania on the need for public-private partnership in implementing investment projects of the central government;
 
3.2. shall evaluate the Annual Report on Public-Private Partnership Agreements and Implementation Thereof, submitted to the Government of the Republic of Lithuania by the Ministry of Finance, and, where appropriate, submit proposals on the implementation of public-private partnership projects to the Government of the Republic of Lithuania;
 
3.3. where appropriate, shall submit proposals on the implementation of public-private partnership projects to the authorities implementing the public-private partnership projects of the central government.
 
4. To instruct the Commission to approve its Rules of Procedure;
 
5. To instruct the Prime Minister to approve the personal composition of the Commission.
 
6. To instruct the Ministry of Finance:
 
6.1. Expired as of 01-01-2015
 
6.2. to provide technical services to the Commission;
 
7. to instruct the Ministry of Finance, the Ministry of Transport and Communications, the Ministry of Economy, the Ministry of Justice, the Department of Statistics, the public institution Central Project Management Agency and the public institution Invest Lithuania to delegate representatives to the Commission and to inform the Office of the Government of the Republic of Lithuania accordingly.
 
8. to recommend that the authorities implementing public-private partnership projects apply to the public institution Central Project Management Agency for methodological assistance and consultations on the drafting and implementation of public-private partnership projects.
 
9. This Resolution and the Rules for Drafting and Implementation of Public-Private Partnership Projects shall not apply to the selection of the strategic investor envisaged by the Law of the Republic of Lithuania on the Nuclear Power Plant in accordance with the procedure prescribed in the Law of the Republic of Lithuania on Concessions or to the award of concession to the project implementing company specified by the Law of the Republic of Lithuania on the Nuclear Power Plant.
 
91. This Resolution and the Rules for Drafting and Implementation of Public-Private Partnership Projects shall not apply to projects implemented on the basis of the model of energy saving service provider, as defined in the programme for Increasing the Energy Efficiency of Buildings approved by Resolution No 1328 of the Government of the Republic of Lithuania of 26 November 2014 on ‘Approval of the Programme for Increasing the Energy Efficiency of Buildings’.
 
10. This Resolution shall come into force on 1 January 2010.
 
 
 
 
 
PRIME MINISTER                                                                                    ANDRIUS KUBILIUS
 
 
 
MINISTER OF FINANCE                                                                       INGRIDA ŠIMONYTĖ
 
 
APPROVED by:
Resolution No 1480 of the Government of the Republic of Lithuania of 11 November 2009 (as amended by Resolution No 1363 of the Government of the Republic of Lithuania of 3 December 2014)
 
 
RULES FOR DRAFTING AND IMPLEMENTATION OF PUBLIC-PRIVATE PARTNERSHIP PROJECTS
 
CHAPTER I
GENERAL PROVISIONS
 
1. The Rules for Drafting and Implementation of Public-Private Partnership Projects (hereinafter referred to as “the Rules”) govern the drafting, submission and evaluation of public-private partnership (hereinafter referred to as “partnership”) projects, i.e. projects for general government and private entities’ partnership as well as concession projects, and govern the decision-making on the implementation of such projects as well as the rights, obligations and responsibilities of the authorities engaged in the partnership process.
2. The Rules shall be observed by public entities entitled to enter into partnership agreements, namely agreements on general government and private entities’ partnership as well as concession contracts.
3. A partnership project that is being implemented as an information society development investment project must be coordinated with the Information Society Development Committee under the Ministry of Transport and Communications.
4. Implementation of a partnership project must be provided for in current strategic activity plans and/or interinstitutional action plans and/or in municipal medium- or short-term strategic planning documents.
41. Private entities have the right to initiate (to propose to implement) (hereinafter referred to as to initiate) new partnership projects or partnership projects without the investment project planned for implementation in accordance with the requirements set in paragraph 4 of the Rules by submitting a  partnership project  initiation proposal to a competent (carrying out the functions laid down in legislation) state or municipal authority.
5. For the purposes of project drafting and implementation, the project implementing authority must appoint or recruit, or select by way of a competitive procedure, a competent person (project manager) and, where necessary, a group of persons (project management group), accountable to the project manager, who, in addition to the assigned functions of drafting and implementing the partnership project, shall also participate in the activities of commissions and/or workgroups formed for the implementation of the partnership project (preparation of necessary documentation, organisation of public procurement etc).
6. Definitions for the purposes of the Rules:
6.1. Partnership project initiation proposal shall mean a document filled out by a private entity, the form of which is approved by the Public Institution Central Project Management Agency (hereinafter referred to as the CPMA) and which contains the information on the initiated partnership project.
6.2. Partnership questionnaire shall mean a document containing questions on the peculiarities of implementing partnership and related benefits, the form of which is approved by CPMA and which shall be filled out by the partnership project implementing authority.
6.3. Partnership project implementing authority shall mean a government entity where the conclusion of an agreement for general government and private entities’ partnership is intended or such an agreement has been concluded for the implementation of a partnership project, or an awarding authority where the conclusion of a concession contract is intended or such a contract has been concluded.
6.4. Methodological guidelines for the drafting and implementation of partnership projects (hereinafter referred to as “methodological guidelines”) shall mean recommendations on the drafting and implementation of partnership projects, approved by CPMA.
6.5. Other concepts used in the Rules shall be understood in accordance with their definitions in the Law of the Republic of Lithuania on Investments (hereinafter referred to as “the Law on Investments”), the Law of the Republic of Lithuania on Concessions (hereinafter referred to as “the Law on Concessions”), the Law of the Republic of Lithuania on Public Debt, the Law of the Republic of Lithuania on Public Procurement (hereinafter referred to as “the Law on Public Procurement”), and the Law of the Republic of Lithuania on Public Sector Accountability.
 
CHAPTER II
DRAFTING, SUBMISSION AND EVALUATION OF CENTRAL GOVERNMENT PARTNERSHIP PROJECTS AND DECISION-MAKING ON PROJECT IMPLEMENTATION
 
8. On the basis of the methodological guidelines, the authority implementing a central government partnership project shall draft an investment project and verify that it may be implemented under the partnership. Once it has been determined that the project may be implemented under the partnership, the authority implementing a central government partnership project shall fill out the partnership questionnaire in line with the methodological guidelines. Where investments are not envisaged, no investment project shall be drafted, and the authority implementing a central government partnership project shall fill out only the partnership questionnaire in line with the methodological guidelines.
9. Having prepared the documentation referred to in paragraph 8 of the Rules, the authority implementing a central government partnership project shall coordinate it with the founder, except where the founder of the authority implementing the central government partnership project is the Seimas of the Republic of Lithuania or the Government of the Republic of Lithuania.
10. The authority implementing a central government partnership project shall submit an investment project drafted under paragraph 8 of the Rules and a filled out partnership questionnaire or, where no investments are envisaged, only the partnership questionnaire to the CPMA for assessment.
11. The CPMA shall, within 30 days of the receipt of the documents referred to in paragraph 10 of the Rules, verify that they were prepared in line with the methodological guidelines and shall submit its opinion on compliance of the documents with the methodological guidelines (hereinafter referred to as “the CPMA opinion”) to the authority implementing the central government partnership project.
12. Where the CPMA opinion confirms compliance of the presented documents with the methodological guidelines, the authority implementing the central government partnership project shall, within 30 days of receipt of the CPMA opinion, submit the received opinion, the investment project and/or the partnership questionnaire to the Commission on public-private partnership projects (hereinafter referred to as “the Commission”) via the Ministry of Finance of the Republic of Lithuania (hereinafter referred to as “the Ministry of Finance”).
13. If the CPMA opinion states that the submitted documents fail to meet the requirements of the methodological guidelines, the authority implementing the central government partnership project, taking the recommendations set out in the opinion into consideration, shall update the documents and submit them to the CPMA for re-evaluation, while the CPMA shall present its opinion in accordance with the procedure prescribed in paragraph 11 of the Rules.
14. Upon receipt of the documents referred to in paragraph 12 of the Rules, the Ministry of Finance shall prepare the information on the financial capacity of the authority implementing the central government partnership project to assume obligations under the partnership agreement and, no later than five days before the meeting of the Commission, shall deliver this information, along with the received documents, to the Commission in accordance with the procedure prescribed in the Commission’s Rules of Procedure, and shall organise the meeting of the Commission.
15. The Commission shall examine the documents and information specified in paragraphs 12 and 14 of the Rules and, in accordance with the procedure laid down in its Rules of Procedure, shall submit a proposal to the Government of the Republic of Lithuania on the need for partnership in implementing the central government investment project. The Commission’s proposal shall be recorded in the minutes of the Commission’s meeting. Within five working days following the meeting of the Commission, the Ministry of Finance shall send an extract from the minutes to the authority implementing the central government partnership project.
16. Once the Commission submits a proposal in favour of the need for partnership in the implementation of a central government investment project, the authority implementing the central government partnership project, or the ministry of the respective area of administration if the authority implementing the central government partnership project is not entitled to propose draft resolutions of the Government of the Republic of Lithuania in accordance with the Law of the Republic of Lithuania on the Government, shall, within 30 days of the adoption of the Commission’s proposal, draft the decision on the implementation of the partnership project and, together with the partnership questionnaire and the Commission’s proposal, submit it to the Government of the Republic of Lithuania pursuant to the procedure laid down in the Rules of Procedure of the Government of the Republic of Lithuania, adopted by Resolution No 728 of the Government of the Republic of Lithuania of 11 August 1994 “On the approval of the Rules of Procedure of the Government of the Republic of Lithuania”.
17. If the Commission issues a proposal directed against the need for partnership in the implementation of a central government investment project, such a partnership project shall not be implemented.
18. A decision on the implementation of a partnership project shall be made by the Government of the Republic of Lithuania, except in the case specified in paragraph 17 of the Rules.
19. A decision on the implementation of a partnership project where the State’s liabilities exceed the amount specified in the Law on Investment or the Law on Concessions shall be adopted by the Seimas of the Republic of Lithuania acting on a proposal of the Government of the Republic of Lithuania. The proposal of the Government of the Republic of Lithuania shall contain the following data: the title and objective of the partnership project, the mode of partnership applicable to the partnership project, and the maximum possible liabilities of the State; other terms of the partnership project may be indicated additionally.
20. A decision by the Government of the Republic of Lithuania on the implementation of a partnership project shall specify the following:
20.1. the partnership project’s implementing authority, which is authorised to sign the partnership agreement;
20.2. the title and objective of the partnership project;
20.3. the form of partnership applied to the partnership project;
20.4. the maximum period of the partnership agreement;
20.5. the activities transferred to a private entity, where the partnership project is being implemented through a general government and private entities’ partnership, or the activities that will be entrusted to a concessionaire, where the partnership project is implemented by way of concession;
20.6. the intended maximum liabilities of the State, calculated at nominal value, considering the risk level of the investment project, and expressed at discounted value;
20.7. if necessary, data about the assets transferred to a private entity for management and use, as required for the implementation of the partnership project;
20.8. other significant terms of the partnership project.
21. Once the Government of the Republic of Lithuania or the Seimas of the Republic of Lithuania adopts a decision on the implementation of the partnership project, the authority implementing the central government partnership project shall, no later than within 120 days of the adoption of the said decision, launch public procurement procedures required for the implementation of the partnership project, namely the procurement of services and works under the Law on Public Procurement where the project is implemented under a general government and private entities’ partnership, or the award of concession in accordance with the Law on Concession where the project is implemented by way of award of concession (hereinafter referred to as “procurement procedures”). The time limit set in this paragraph of the Rules for the procurement procedures necessary for the implementation of a partnership project may be extended, for a maximum period of one year, by a reasoned decision of the head of the authority implementing the central government partnership project. If the authority implementing the central government partnership project fails to commence the procurement procedure within the time limit specified in this paragraph of the Rules, it shall contact the Commission, which shall offer its recommendations regarding the further implementation of such a partnership project in accordance with its Rules of Procedure. Commencement of the procurement procedures for the implementation of a partnership project under this paragraph does not prevent any procurement procedures, implemented in stages, for the implementation of partnership projects, where the initial stage is intended for the acquisition of the services of preparation of documents required for the adoption of decisions on partnership project implementation, while the remaining stages are carried out after the decisions on partnership project implementation have been adopted by the Government of the Republic of Lithuania or the Seimas of the Republic of Lithuania.
22. In the course of the procurement procedures, the authority implementing the central government partnership project shall prepare the procurement documents and submit them to the CPMA. After evaluating conformity of the procurement documents with the methodological guidelines, the CPMA shall, within 10 days of the receipt of the procurement documents, present its opinion on the documents’ conformity with the methodological guidelines to the authority implementing the central government partnership project.
23. In the course of the procurement procedures, the authority implementing the central government partnership project shall draft the partnership agreement and submit it to the Ministry of Finance:
23.1. where the procurement procedure is organised through an open procedure or a restricted procedure, the draft partnership agreement shall be submitted before publishing the tender notice;
23.2. where the procurement procedure is organised by way of a competitive dialogue, the draft partnership agreement shall be submitted before the end of the dialogue;
23.3. where the procurement procedure is organised by way of negotiations, the draft partnership agreement shall be submitted before the end of the negotiations;
23.4. in the case of a procurement procedure for the award of concession, also in the case of a non-competitive award of concession, the draft partnership agreement shall be submitted before the completion of the negotiations with the tenderer.
24. Within 30 days of receipt of the draft partnership agreement, the Ministry of Finance, guided by the decisions of the Statistical Office of the European Union (Eurostat) and the provisions of the Eurostat’s Manual on Government Deficit and Debt, published at http://epp.eurostat.ec.europa.eu, shall assess the financial terms in the draft partnership agreement from the standpoint of fiscal deficit and shall present the authority implementing the central government partnership project with its conclusion, either supporting or rejecting the financial terms (hereinafter referred to as “the conclusion of the Ministry of Finance”).
25. If the conclusion of the Ministry of Finance favours the financial terms in the draft partnership agreement, the authority implementing the central government partnership project shall proceed with the procurement procedures and, if the financial terms in the draft partnership agreement meet the conditions set out in the decision of the Government of the Republic of Lithuania or the Seimas of the Republic of Lithuania on the implementation of the partnership project, shall sign the partnership agreement and implement the partnership project. If the conclusion of the Ministry of Finance is unfavourable to the financial terms of the draft partnership agreement, the authority implementing the central government partnership project shall submit an amended draft partnership agreement to the Ministry of Finance for re-evaluation or shall terminate the procurement procedure. Where the financial terms of the draft partnership agreement are in conflict with the conditions laid down in the decision of the Government of the Republic of Lithuania or the Seimas of the Republic of Lithuania on the implementation of the partnership project, the authority implementing the central government partnership project shall terminate the procurement procedure. The procurement procedure shall be terminated in line with the Law on Public Procurement or the Law on Concessions.
26. When drafting a conclusion, the Ministry of Finance shall have the right to invite the Lithuanian Department of Statistics to participate in the evaluation of the draft partnership agreement. In that case, the time limit for drafting the conclusion under paragraph 24 of the Rules may be extended to 90 days or, at a reasoned request from the Lithuanian Department of Statistics, to a maximum period of 180 days.
 
Chapter III
DRAFTING, SUBMISSION AND EVALUATION OF LOCAL GOVERNMENT PARTNERSHIP PROJECTS AND MAKING DECISIONS ON PROJECT IMPLEMENTATION
 
27. The authority implementing the local government partnership project shall, pursuant to the methodological guidelines and paragraph 8 of the Rules, draft an investment project and fill out the partnership questionnaire or, in case no investments are envisaged, only fill out the partnership questionnaire, and shall submit the said documents to the CPMA, which shall carry out an evaluation and provide its opinion in line with paragraph 11 of the Rules.
28. Upon receipt of the CPMA opinion on document compliance with the methodological guidelines, the authority implementing the local government partnership project shall, within 30 days of receipt of the CPMA opinion, draft a decision on the need for the project and submit it to the municipal council. A draft decision on the need for the implementation of the partnership project shall contain the data specified in paragraphs 20.1-20.8 of the Rules.
29. Once the municipal council adopts a decision on the need for the partnership project, the authority implementing the local government partnership project shall, within 90 days of the adoption of this decision, prepare the procurement documents and submit them to the CPMA, which shall, pursuant to paragraph 22 of the Rules, issue an opinion on the documents’ compliance with the methodological guidelines and, upon receipt of the CPMA opinion, shall submit to the municipal council the partnership project’s procurement conditions, the main conditions of the partnership agreement and the method of procurement for approval, if the partnership project is being implemented through a general government and private entities’ partnership, or for the determination of stages in the tendering procedure, if the partnership project is being implemented by awarding concession. The data referred to in this paragraph may be approved together with the decision mentioned in paragraph 28 of the Rules.
30. After the municipal council has approved the data referred to in paragraph 29 of the Rules, the authority implementing the local government partnership project shall, no later than within 120 days of the adoption of such a decision, commence the public procurement procedure for the implementation of the partnership project in line with paragraph 23 of the Rules, shall draft the partnership agreement and shall submit it to the Ministry of Finance, which, pursuant to paragraphs 24 and 26 of the Rules, shall issue an opinion on the financial terms set out in the draft partnership agreement (hereinafter referred to as “opinion of the Ministry of Finance”). If the authority implementing the local government partnership project fails to commence a procurement procedure within 120 days of the adoption of the decision under paragraph 29 of the Rules, the municipal council shall extend this period or, in accordance with the procedure prescribed in paragraph 29 of the Rules, shall approve new partnership project procurement conditions, the main conditions of the partnership agreement and the method of procurement, where the partnership project is implemented through a general government and private entities’ partnership, or shall determine new stages of the procurement procedure, where the partnership project is implemented by awarding concession. Commencement of the procurement procedures under this paragraph does not prevent any procurement procedures, implemented in stages, for the implementation of partnership projects, where the initial stage is intended for the acquisition of the services of preparation of documents required for the adoption of decisions on partnership project implementation, while the remaining stages are carried out after the municipal council has adopted the decisions referred to in paragraphs 28 and 29 of the Rules.
31. Upon receipt of an opinion of the Ministry of Finance, the authority implementing the local government partnership project shall submit the draft partnership agreement, together with the opinion of the Ministry of Finance, to the municipal council.
32. If the municipal council approves the submitted draft partnership agreement, the authority implementing the local government partnership project shall sign the partnership agreement and shall implement the partnership project.
33. Should the municipal council reject the draft partnership agreement, the authority implementing the local government partnership project shall amend the draft partnership agreement and shall submit it to the Ministry of Finance for re-evaluation and, having received an opinion of the Ministry of Finance, shall submit the amended draft partnership agreement to the municipal council or terminate the procurement procedure. The procurement procedure shall be terminated in accordance with the procedure prescribed by the Law on Public Procurement or the Law on Concessions.
34. The municipal council shall adopt decisions under paragraphs 29, 32 and 33 of the Rules after it has received a conclusion from the Municipality Ombudsman, which must include, among other things, an assessment of the legality of partnership as well as its economic and social benefits.
 
Chapter IV
IMPLEMENTATION OF PARTNERSHIP PROJECTS
 
35. Implementation of a partnership project shall begin once the partnership agreement comes into effect.
36. Disputes regarding the implementation of a partnership agreement shall be settled in compliance with the procedure established by the partnership agreement.
37. If during the period of partnership project implementation there arises a need to amend or terminate the signed partnership agreement, the agreement shall be amended or terminated in compliance with the terms established by the partnership agreement. In the case of amendment of the clauses governing the financial conditions in the partnership agreement, such changes will require:
37.1. a conclusion of the Ministry of Finance provided in accordance with paragraphs 24–26 of the Rules, when the partnership project is being implemented by the authority implementing the central government partnership project;
37.2. a conclusion of the Ministry of Finance provided in accordance with paragraph 30 of the Rules, when the partnership project is being implemented by the authority implementing the local government partnership project.
 
 
CHAPTER V
RESPONSIBILITY AND INFORMATION PROVISION AND PUBLISHING
 
38. The authority implementing a partnership project shall be responsible for the following:
38.1. initiation of partnership projects;
38.2. drafting of the investment project, completion of the partnership questionnaire, drafting of the partnership agreement and correctness of the data contained in the said documents;
38.3. conducting procurement procedures required for the implementation of the partnership project;
38.4. conclusion of a partnership agreement and implementation of its terms and conditions;
38.5. submission of information on the progress of drafting and implementation of partnership projects.
39. The authority implementing a partnership project shall provide information on the progress of drafting and implementation of the partnership project in compliance with the Rules for the Provision of Information on the Progress of Drafting and Implementation of Public-private Partnership Projects, approved by an Order of the Ministry of Finance.
40. The Ministry of Finance shall:
40.1. be responsible for the evaluation of the financial terms of the draft partnership agreement and the proposed amendments to the partnership agreement;
40.2. collect, systematize, store, and process information on the progress of implementation of partnership projects;
40.3. submit to the Government of the Republic of Lithuania an Annual Report on Partnership Agreements and Implementation Thereof, the form of which shall be approved by the Minister of Finance.
41. CPMA shall be responsible for:
41.1. drafting of methodological guidelines in line with the legislation and the best practices in project drafting and implementation and publishing of these guidelines on the website www.ppplietuva.lt;
41.2. assessment of compliance of investment projects, partnership questionnaires and procurement documents with the methodological guidelines;
41.3. publishing of information on the progress of drafting and implementation of partnership projects on the website www.ppplietuva.lt
42. Funds required for the implementation of partnership projects shall be planned in compliance with the legal acts regulating the drafting, approval and implementation of the State and municipal budgets.
43. The Lithuanian Department of Statistics shall submit its conclusion regarding the influence of the distribution of risk, identified in the partnership agreement, on the government deficit and debt indicators to the Statistical Office of the European Union (Eurostat), in accordance with the procedure prescribed by the legislation.
 
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Annex to
the Rules for Drafting and Implementation
of Public-Private Partnership Projects
 
 
DESCRIPTION OF PROCEDURE FOR DISTRIBUTION OF RISK AMONG THE PARTIES OF THE PUBLIC-PRIVATE PARTNERSHIP PROJECT 
 
 
I . GENERAL PROVISIONS
 
1.  The Description of Procedure for Distribution of Risk among the Parties of the Public-Private Partnership Project (hereinafter referred to as the “Description of Procedure”) shall establish major types of project risk, principles for distribution of risk among the parties of the partnership project, and an impact of distribution of risk on the indicators of public sector deficit and public debt.   
2.  Public sector entities entitled to make partnership agreements shall follow the Description of Procedure while drafting partnership project feasibility studies, partnership projects and partnership agreements.
3.  Definitions used in the Description of Procedure:
Risk means a probability that a certain event might have a negative impact on the implementation of a partnership project.  
Risk distribution matrix means a table indicating an established risk of the partnership project, probability of risk, data about distribution of risk among the parties of the partnership project, and risk management.
Other definitions used in the Description of Procedure shall comply with the definitions used in the Rules for Drafting and Implementation of Public-Private Partnership Projects. 
 
 
II. PRINCIPLES OF DISTRIBUTION OF RISK AMONG THE PARTIES OF THE PARTNERSHIP PROJECT
 
4.  The central principle of distribution of risk is that risk shall be attributed to that party of the partnership project that is able to manage the risk best at the lowest costs.
5.  The risk that cannot be attributed to the single party of the partnership project shall be shared between both parties of the partnership project.
6.  Once the probable risk is established, it shall be distributed among the parties of the partnership project and the risk distribution matrix shall be drawn. Where the risk is attributed to both parties of the partnership project, the risk distribution matrix shall indicate the share each party of the partnership project has assumed.
7.  The risk distribution matrix shall be an integral part of the feasibility study of the investment project, the partnership project, and the partnership agreement.
 
III. MAJOR TYPES OF RISK
 
8.  Major types of risk shall be as follows:
8.1. construction risk means the risk related to events that have an impact on the modifications of value, costs and terms of planning, construction, reconstruction or repairs of the assets to be newly created or transferred in trust for management and use of a private entity, which arise due to the following:
8.1.1. planning errors;
8.1.2. construction delays;
8.1.3. nonconformity of the construction works with the normative requirements and standards;
8.1.4. rise in construction costs;
8.1.5. inaccuracies in technical specifications or nonconformity of the project documentation with the aims of the partnership project;
8.1.6. restrictions upon ownership rights to land or other types of property;
8.1.7. restrictions related with archaeological and cultural heritage;
8.1.8. special property requirements;
8.1.9. the rise of new technologies or application of new technologies for the implementation of the partnership project;
8.1.10.              negative physical and legal conditions having an impact on the decrease of the value or utility of property;
8.1.11. delay in the issue of summary conditions for the construction planning;
8.1.12. delay in the issue of construction permits;
8.2. availability risk means the risk related to events that have an impact on the provision of services and quality and quantity requirements for services, which arise due to the following:
8.2.1. inability to provide services within the scope established in the partnership project;
8.2.2. inability to provide services in accordance with the quality established in the partnership  project;
8.2.3. nonconformity of the services provided with the safety or other compulsory requirements (hygiene, sanitary, etc.);
8.2.4. the rise in service provision costs;
8.2.5. inadequate employee qualifications of the private service provider;
8.2.6. lack of assets or employees, or inadequacy thereof, required for the provision of services;
8.2.7. technological modifications and errors;
8.2.8. special requirements for the provision of services;
8.3. demand risk means the risk related to events that have an impact on demand for the provision of services, which arise due to the following:
8.3.1. competition;
8.3.2. business cycles;
8.3.3. changes in service price;
8.3.4. technical obsolescence;
8.3.5. new market changes having an impact on the number of service consumers and the price, quality and quantity of services; 
8.4. political risk means the risk related to events linked with changes in the political environment, which have an impact on the feasibility of the partnership project;
8.5. legal environment risk means the risk related to events linked with changes in legal acts, validity of permits and licences, noncompliance with agreements, and legal proceedings;
8.6. macroeconomic risk means the risk related to events linked with the economic situation of the state: inflation, changes in interest rates, currency exchange fluctuations, rate of economic growth, and demographic and taxing changes;
8.7. price regulation risk means the risk related to events that have an impact on the changes to the procedure for setting service rates, which lead to the changes in the partnership project implementation costs and rights and obligations of the contracting parties;
8.8. income risk means the risk related to events that have an impact on the amount of income received for the provision of services, which arise due to the following:
8.8.1. application of remuneration calculation principles;
8.8.2. setting or modification of charges;
8.8.3. modification of price setting principles;
8.9. force majeure risk means the risk related to events that rise due to circumstances that are impossible to control, reasonably predict, and to prevent the appearance or after-effects thereof;
8.10. dispute settlement risk means the risk related to events linked with conditions making an impact on efficient settlement of disputes;
8.11. environmental risk means the risk related to events that arise due to the following:
8.11.1. non-compliance with environmental requirements or requirements governing the use of natural resources;
8.11.2. environmental damage done while implementing the partnership project;
8.12. asset transfer risk means the risk related to events that arise due to the following:
8.12.1. appropriateness of information about the status of assets to be transferred before assets are transferred in trust for management and use and lack of accessibility to this information;
8.12.2. restriction of property rights while delivering services;
8.12.3. restriction of income from the use of assets;
8.12.4. requirements related to restitution of assets and valuation of assets to be restituted.
9.  The list of risk and events attributed thereto is not exhaustive; the risk distribution matrix shall indicate additional risks and circumstances having an impact on the viability of the partnership project.
 
 
 
IV. IMPACT OF DISTRIBUTION OF RISK AMONG THE PARTIES OF THE PARTNERSHIP PROJECT ON THE INDICATORS OF PULIC SECTOR DEFICT AND DEBT
 
10. The Eurostat (Statistical Office of the European Communities) Decision No 18/2004 of 11 February 2004 on Public and Private Partnerships shall be followed while establishing impact of distribution of risk among the parties of the partnership project, which is being implemented by application of a public-private partnership, on the indicators of public sector deficit and debt.
11. Provisions of Paragraph 13 of the Description of Procedure shall not be applied to the distribution of risk among the parties of a partnership project, when the partnership project is being implemented by granting concession. Risk distribution matrix of a partnership project of this type shall lay down, apart from the types of risk listed in Paragraph 8 of the Description of Procedure, all the other risks related with the concession activities and shall evaluate whether the risk distribution is in compliance with the definition of concession established by the Law of the Republic of Lithuania on Concessions, i. e., that the concessionaire shall assume the entire risk, or the greater share thereof, related with the activities pursued.
12. While establishing the impact of distribution of risk of a public-private partnership project between the parties of the public and private entities of the partnership project on the indicators of the public sector deficit and debt, three major types of risk, indicated in the Paragraphs 8.1–8.3 of the Description of Procedure shall be taken into account.
13. The party of a public and private partnership project shall assume the greater share of risk when the type of risk indicated in Paragraph 8.1 of the Description of Procedure (construction risk) and one of the types of risk indicated in Paragraphs 8.2 or 8.3 of the Description of Procedure (availability risk or demand risk) is attributed to this party.
14. When the greater share of risk is attributed to a private entity, the public-private partnership agreement shall be considered to be a performance lease agreement. Assets created or transferred for management or use in compliance with this agreement shall not be listed in the balance sheet of a public entity, and only the amounts payable during the current year shall have an impact on the indicators of the public sector deficit.
15. When the greater share of risk is attributed to a public entity, the public-private partnership agreement shall be considered to be a financial lease agreement. The value of assets created or the increase of the value of assets transferred for management or use in compliance with this agreement shall be listed in the balance sheet of a public entity, and financial obligations assumed by a public entity in compliance with this agreement shall increase the public sector deficit and debt.
16. The impact of distribution of risk on the indicators of the public sector deficit and debt shall be evaluated by the Ministry of Finance.
 
 
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