"Possibilities and challenges of financing public private partnership by EU Structural Funds"

The kick-off conference in Ostrava (17.-19.03.2009) was divided into two parts – a public forum with about 80 participants, gathering key stakeholders for PPP and internal work sessions – where the ACT4PPP partners came together to jointly discuss main themes on PPP development.

Public forum

Against the huge challenges of the worldwide financial and economic crisis an active and intelligent teamplay of public and private partners becomes more and more crucial for ensuring further prosperity, attractiveness and competitiveness of our cities and regions. This was one of the main messages of the European forum „Possibilities and Challenges of Financing Public Private Partnership by EU Structural Funds” at 18 of March 2009 in Ostrava, Czech Republic. The forum was part of the kick-off event of the project “ACT4PPP – Transnational Action for Public Private Partnership” co-funded by the European Territorial Cooperation Program CENTRAL Europe.

This forum was the first of a number of forums which will contribute to a main focus of the ACT4PPP project – which is promoting the targeted application of public private partnerships (PPP) as a modern tool for delivering public infrastructures and services as well as urban and regional development measures more efficiently. With these forums, the ACT4PPP project will widen their discussions to the outside of the project boundaries – to all actors interested in PPP development. At the occasion of the PPP forum a broad range of PPP experts from the European Commission, national and regional authorities, development agencies, finance institutions as well as universities and consultancies discussed together basic PPP principles and models, legal and organisational challenges and solutions as well as focussed on the aspect of using European Structural Funds for fostering Public Private Partnerships.

The forum therefore had three dimensions: In the morning session the speakers highlighted general structures of PPP and the ACT4PPP project in more detail and first practical insights in possible PPP projects. Based on this, the afternoon session first laid focus on legal and financial frames set by the European Union for using Structural Funds for Public Private Partnership. Within a third part, the forum held a penal discussion with important key stakeholders – public bodies from regional, national and European level and private actors involved in PPP processes – to reflect opportunities and challenges of using EU Structural Funds for PPP implementation in more detail.

The Mayor of the host city, Petr Kajnar, explained in his opening speech that for a City like Ostrava ACT4PPP provides the opportunity to prepare a pilot PPP project for the first time and to benefit from experiences and know-how of other cities and regions and dedicated experts forming the transnational network. For Ostrava PPP also means to break existing barriers in terms of legal and organisational difficulties – but also between the public and private sector in general – as well as to find new and effective development instrument which were not yet explored.

Roman Petrusek, director of the Federal Association of State Development Companies, in his function as Lead Partner of the partnership stressed in his introductory statement, that ACT4PPP will illustrate how PPP can contribute to cope with the economic, structural, demographic or social development pressure and difficult financial situations of cities and regions. Trough intensive and targeted exchange, learning and capitalisation the partnership will explore which might be the right PPP-model for different development issues – ranging from culture, economic infrastructure, housing to brownfield redevelopment – within specific and diverse national contexts. Being a transnational network, ACT4PPP will in particular showcase and promote the given opportunities of public private cooperation towards the national and international level and thus also plead for improving the existing framework conditions in order to ease the realisation of PPPs.

Michael Frank from Alfen Consult was presenting main characteristics of PPP. It became obvious, that defining PPP is by far not an easy topic, rather as complicated as “nailing jelly to the wall”. But nevertheless, PPP represents a promising instrument to implement objects and tasks in various fields of public services, might that be transportation, supply or public real estate. Frank highlighted crucial elements for PPP success like share of risks and financial structures – and by this was able to give those participants of the PPP forum a good first insight in the topic and a necessary basic knowledge for the upcoming discussions. This approach was even underlined by the short introduction in the ACT4PPP project – which did not only show the special necessity and challenge of discussing PPP on a transnational level but gave also quite interesting insights how the topic of PPP could be handled in reality on local level. Complementing this, ACT4PPP project partners from the cities of Sopot, Ostrava and Venice presented their planned pilot activities in the field of PPP.

When discussing the legal framework condition, the European Union is an important actor who has elaborated several guidelines which influence the implementation of PPP. Therefore, the forum eagerly waited for Christos Gogos, Deputy Head of Unit for the Czech Republic of Directorate General Regio of the European Commission, who highlighted the importance PPP is playing for delivering effective European Regional and Structural Policy. Due to the importance of PPP, the Commission is actively promoting the use of these instruments. He moreover highlighted that European cooperation projects like ACT4PPP are very interesting and valuable sources of expertise and practice for the EU institutions. In his presentation Gogos especially pointed out the importance of developing a new culture of cooperation between public and private actors in which the balance of interests, benefits and risks is crucial. When it comes to constructing contractual and legal frameworks he considered to keep it simple and not making complicated arrangements or even specific PPP legislation.

The following discussion however clearly stated that using EU Structural Funds is not always as easy as the European Commission wants it to be. Especially the question of state aid and the limitations of this in the context of European Structural Funds and private actors involved in PPPs remains challenging – and will ask for further discussions and clarifications.

The first lively and concentrated discussion and exchange with partners, experts and professionals during the kick-off conference created a good starting point for gathering and capitalising the broad, dense and specific expertise and practice on PPP. Moreover, the diversity of the practical PPP approaches the ACT4PPP partners will test during the lifetime of the project illustrated the various challenges and difficulties of developing PPPs on the ground. But at the same time it exposed the opportunities and benefits of this development instrument and the already existing innovative ideas. One of the main detected issues ACT4PPP will help to overcome is the still existing contradiction between public and private based on their different planning culture.

Internal work sessions

The internal part of the kick-off conference (17.+19.03.2009) was as usual dedicated to organisational procedures and questions but also to thematic discussions. As the project is still in its beginnings, the ACT4PPP partners were focussing on necessary initial steps for preparing a PPP process. A first theoretic input was given by PPP experts on possible PPP models in general and first ideas on PPP models for the implementation of the pilot activities in the partner cities and regions. This was followed by lively discussion on what criteria are necessary and useful for starting a PPP development and what circumstances are influencing the development. The partners were able to give concrete input from their local pilot activities. Results of the discussion will be presented in first thematic reports of the working groups.