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Public-private partnerships

The procedure and conditions of granting the right to use state-owned goods in the public interest was regulated by the Law on Concession adopted in April 2002. Implementation of this law has shown several weaknesses from the perspective of adequacy, as well as a lack of harmonisation with the EU directives on this matter. To overcome these issues, a new Law on Concessions and other Public-Private Partnerships was adopted by the Assembly of Republic of Macedonia in January 2008.

The need to pass the law came with the need for the area to be harmonised, and the principles of the EU Directive 2004/18/EC dated March 31 2004, which had to be adequately implemented. Furthermore, it was necessary to introduce public-private partnerships as a form that allows private initiative in financing activities in the public interest. The main novelty in this law is defining concession as a granted right to use goods in the public interest, undertake construction in the public interest or performance of public services, by obliging the concessionaire to build and/or to manage, to use and to maintain the object of concession, with or without compensation made by the granting party. The concession could be granted for a maximum term of 35 years, without possibility of extension unless specific conditions stipulated in this law are met. Procedures for granting concessions are stipulated in the law as public tender or a limited bidding procedure. This law also introduces procedures for granting a concession through negotiations. Concessions and public-private partnerships may be granted in the form of contractual partnerships and institutional partnerships.

Further, the Law on Concessions and other Public-Private Partnerships specifies the compensation payable by the concessionaire or public-private partner, and imposes criteria for determining the concession fee where payment of a fee is stipulated in the decision to start the procedure of granting concession.

The effects of this law are still unknown, because it has only been two months since its implementation. However, the possibility to create public private contracts is a positive regulatory reform.

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