Public Private Partnership

The Czech Government has adopted Policy PPP introducing public private partnership ("PPP") in January 2004 as a standard tool serving the provision of public services and public infrastructure.   Two packages of pilot PPP projects were launched in 2005 - 2006, but all these projects were cancelled or frozen on different levels of preparation and for different reasons. One big transport infrastructure PPP project is being implemented now, it is the D4 motorway Homepage | D4 PPP (pppd4.cz).

Institutions

The Ministry of Finance - State Budget Department, Regional a Municipal Budgets Department and two “sectoral” departments oversee the fiscal and transparency issue related to PPPs. Moreover, “PPP Centrum of the Czech Republic” was established in 2004 to support the implementation of projects and to assist to contracting authorities from the public sector with the preparation and the realisation of projects. PPP Centrum together with the MoF and with relevant public sector institutions from Unite Kingdom, Netherlands and Portugal worked out and published a package of PPP guidelines and educated several hundreds of staff members of the state, regional and municipal administration in PPP issues.  Later the PPP Centrum changed its main activity and name and in December 2015, it was cancelled. 

The most important player in preparation and implementation of each PPP project in the Czech Republic is contracting authority, i.e. concrete public sector institution, responsible of provision of concrete public service.  

Legislation and monitoring

The successful implementation of PPP project depends on the effective tender procedure and on a comprehensive contractual framework of the project. Public Procurement Act No. 134/2016 Coll., as amended, together with related executing decrees specify all important aspects of the tender procedure and also the minimum terms of a partnership between the public sector and a private partner. All important aspects of PPP transactions are described in guidelines mentioned above, they were published by the Ministry of Finance on its website.

The Ministry of Finance is monitoring PPP projects in the division into two groups, according to the type of the Public Contracting Authority:

1. In the first group, there are projects where the Public Contracting Authority is the state (projects prepared at central government level). 
2. In the second group, there are projects prepared by regional and local authorities. According to Section 186 of the Public Procurement Act, a statement of the Ministry of Finance is required while entering into or revising Concession Contracts by these authorities. Information about PPP projects comes from the documents that regional and local authorities provide while asking for the opinion of the Ministry of Finance on the Concession Contract or its change (obligatory according to Section 186 of the Public Procurement Act). These contracts are then being voted by the competent authority. No further information about the final (non) realization of the project is provided. At the municipal level have been recorded mostly concession contracts in the water sector and social services concession contracts. During 2023 invalidation of these procedures is expected because the Public Procurement Act is to be amended. As a result Ministry of Finance would get no ex ante information about regional and municipal PPP projects. As for the budgetary implications of PPPs, ex post data are collected as mentioned below. 

In the process of the state budget preparation Central Government institutions are obliged to provide the Ministry of Finance with information about their long-term contracts (value 300 million CZK and more) and future state budget or state funds´ expenditures resulting from these contracts. This obligation is stipulated in the Budgetary Rules Act No. 218/2000 Coll. and its executing degree No. 133/2013 Coll. The Ministry of Finance in compliance with requirements linked with the Directive No. 2011/85/EU, elaborated a questionnaire on private public contracts, which came into force in 2014. 

An Act No. 25/2017 Coll., on Collection of Selected Data for Monitoring and Management of Public Finance was approved in January 2017. According to this Act public sector entities on the central, regional and municipal levels are obliged to provide data on their PPP transactions as part of their accounting statements. 

The biggest PPP project under implementation

The Czech government approved a proposal for the completion of the D4 motorway - 32 km between Příbram and Písek, in January 2016. In the second half of 2018, a procurement procedure took place and in February 2019, the Ministry of Transport invited four of the best tenderers to participate in the public procurement. In February 2021, the Czech Republic – Ministry of Transport signed a concession agreement with the DIVia, Ltd. The corporation is responsible for the completion of the project, construction, financing, operation and maintenance of the section (including the already built parts) for 25 years. State payments for the duration of the concession contract are expected to be approximately CZK 25 billion.  Construction began after the signing of the concession contract in 2021 and it goes on in  accordance with the timetable. First availability payments from the state are expected in the beginning of 2025.

Contact for further information: 
Ms. Katerina Helikarova
katerina.helikarova@mfcr.cz
Management of Budgetary System Unit
Ministry of Finance
Letenská 15, 118 10 | Prague – Czech Republic
+420 257 043 443