September 20, 2022
The New Amendments encouraging Public-Private Partnerships
Following amendments that were introduced to the Public-Private Partnerships Law (the “PPP Law”) in December 2021, the Prime Minister issued Decree No. 3217 on 13 September 2022 (the “Amendment”) amending the Executive Regulations of the PPP Law issued by virtue of the Prime Minister Decree No. 238 of 2011 (the “ER”). The Amendment provides more details to the aforementioned amendments to the PPP Law.
We highlight below the key points of the Amendment.
Announcement of PPP Projects
The Amendment has expanded the means available for the PPP Unit and other authorities to announce/publish the lists of PPP projects. Apart from the websites of the PPP Unit and the relevant authorities (in respect of their specific projects), the authorities are allowed to publish their list of projects at the General Authority for Investment and Free Zones, as well as the Sovereign Fund of Egypt for Investment and Development. The PPP Unit is also allowed to publish the list at Egyptian consulates and commercial representation offices abroad.
Prequalification
The Amendment allows authorities to maintain a register of prequalified investors for any potential infrastructure, service and utility projects relevant to their mandate, provided that the prequalification is undertaken pursuant to the procedures outlined in the ER. The authorities are allowed to solicit prequalified investors to contract through limited tenders and bids, or direct agreement. The term of validity of the prequalification cannot exceed two years from the date a prequalified investor is notified of its prequalification. In case the authorities decide to solicit prequalified investors in relation to any potential project, the interested investor(s) obtaining the terms and conditions of the project must sign an acknowledgment confirming that the conditions of their prequalification (either individually or through a consortium) are still valid.
Reduced Challenge Timeframe
Investors whose technical offers have been eliminated are entitled to challenge the elimination before the Appeal Committee created by the PPP Law. The challenge period has been reduced from thirty days to fifteen days from the date the investor receives the notice of elimination. The same reduced period also applies in case of challenges relating to any to pre-contracting procedures.
Acceptance of a Single Offer
The Amendment has amended the provisions relating to the acceptance of a single offer whereby it is allowed to accept such offer in case its value is within a 25% decrease or increase of the governmental comparative value, provided that (1) public interest requires not to restart the procurement process or there is no benefit from doing so, and (2) the single offer is acceptable from a technical perspective. There are no other exceptions allowing for accepting a single offer.
New Procurement methods for private sectors
Pursuant to the Amendment, conditions for procurement methods for PPPs through limited tenders and bids, as well as direct agreements have been provided in more details.
Additionally, the Amendment allows the private sector to propose PPP projects to authorities in specific cases where such projects are considered of an innovative nature. Innovation includes, inter alia, (1) the absence of a similar project in Egypt, (2) use of innovative methods that reduce carbon emissions, (3) obtaining unconventional financing for the project, or (4) the proposing investor owning the IP of the project.
Once the project is approved by the Supreme Committee for Partnership Affairs following the procedures required under the ER, the project can be entered into either through direct agreement with the proposing investor in case it is the exclusive owner of the technology on which the project is based, or through a general tender or bid.
We highlight below the key points of the Amendment.
Announcement of PPP Projects
The Amendment has expanded the means available for the PPP Unit and other authorities to announce/publish the lists of PPP projects. Apart from the websites of the PPP Unit and the relevant authorities (in respect of their specific projects), the authorities are allowed to publish their list of projects at the General Authority for Investment and Free Zones, as well as the Sovereign Fund of Egypt for Investment and Development. The PPP Unit is also allowed to publish the list at Egyptian consulates and commercial representation offices abroad.
Prequalification
The Amendment allows authorities to maintain a register of prequalified investors for any potential infrastructure, service and utility projects relevant to their mandate, provided that the prequalification is undertaken pursuant to the procedures outlined in the ER. The authorities are allowed to solicit prequalified investors to contract through limited tenders and bids, or direct agreement. The term of validity of the prequalification cannot exceed two years from the date a prequalified investor is notified of its prequalification. In case the authorities decide to solicit prequalified investors in relation to any potential project, the interested investor(s) obtaining the terms and conditions of the project must sign an acknowledgment confirming that the conditions of their prequalification (either individually or through a consortium) are still valid.
Reduced Challenge Timeframe
Investors whose technical offers have been eliminated are entitled to challenge the elimination before the Appeal Committee created by the PPP Law. The challenge period has been reduced from thirty days to fifteen days from the date the investor receives the notice of elimination. The same reduced period also applies in case of challenges relating to any to pre-contracting procedures.
Acceptance of a Single Offer
The Amendment has amended the provisions relating to the acceptance of a single offer whereby it is allowed to accept such offer in case its value is within a 25% decrease or increase of the governmental comparative value, provided that (1) public interest requires not to restart the procurement process or there is no benefit from doing so, and (2) the single offer is acceptable from a technical perspective. There are no other exceptions allowing for accepting a single offer.
New Procurement methods for private sectors
Pursuant to the Amendment, conditions for procurement methods for PPPs through limited tenders and bids, as well as direct agreements have been provided in more details.
Additionally, the Amendment allows the private sector to propose PPP projects to authorities in specific cases where such projects are considered of an innovative nature. Innovation includes, inter alia, (1) the absence of a similar project in Egypt, (2) use of innovative methods that reduce carbon emissions, (3) obtaining unconventional financing for the project, or (4) the proposing investor owning the IP of the project.
Once the project is approved by the Supreme Committee for Partnership Affairs following the procedures required under the ER, the project can be entered into either through direct agreement with the proposing investor in case it is the exclusive owner of the technology on which the project is based, or through a general tender or bid.
