On March 15, 2021, Law No. 2021-23 of March 2, 2021 on public-private partnership contracts (hereinafter the “New PPP Law”) was published in the Official Gazette of the Republic of Senegal No. 7407.
It is presented as a “vector of modernization and flexibility” of the former Law No. 2014-09 of February 20, 2014 on partnership contracts (hereinafter the “Former PPP Law”).
Application of the New PPP Law
The New PPP Law repeals the Former PPP Law and applies to all transactions in respect of which a public tender notice has been published after March 15, 2021.1
Notably, it does not apply to contracts relating to the energy, mining and telecommunications sectors.
In addition, public-private partnership contracts (hereinafter “PPP Contracts“) signed before March 15, 2021 will continue to have effect until the expiry of their term, but may only be extended or renewed under the conditions provided for in the New PPP Law, unless the conditions of such extension or renewal have been expressly provided for in the PPP Contract in question.
Evolution of the procedures for the award of PPP Contracts
- New fundamental principles: the New PPP Law enshrines the principle of equity in the treatment of candidates bidding for the project, which will need to be clarified by the implementing decree as such a principle is unusual in this area. It also institutes the principle of “responsibility of economic operators to respect human rights”3.
- Reduction of the number of conditions for the use of PPP Contracts: under the Former PPP Law, there were three conditions. Only two remain4:
- the complexity of the project, which would imply that the contracting authority is not able to carry out the project alone; and
- the characteristics of the project or the requirements of the public service to be provided, which would imply that the use of a PPP Contract is more favorable than the use of other public contracts.
- Duration of the PPP Contract: under the Former PPP Law, the duration of PPP Contracts depended on the amortization period of the financing or the chosen financing methods. The New PPP Law adds to these elements “the nature of the services requested, the time required to achieve the objectives and the performance commitments”.5
- Negotiation phase of the terms of the PPP Contract imposed by the New PPP Law: at the end of the selection process, “the contracting authority organizes the finalization of the terms of the contract with the successful candidate.”6 The implementing decree of the New PPP Law should provide further details on how this finalization will be carried out.
Creation of new bodies
The New PPP Law completely recasts the institutions created by the Former PPP Law.
- Creation of the Unité nationale d’Appui aux Partenariats public-privé (hereafter “UNAPPP”): a body responsible, among other things, for providing support to the contracting authorities in the award of PPP Contracts and for issuing an advisory opinion on the preliminary evaluations of partnership projects.7 Two ministries must give their assent to the UNAPP’s advisory opinion.8
- Creation of a body responsible for the a priori control of public procurement9: the implementing decree will specify the nature and scope of its prerogatives
- Creation of a regulatory body: a body responsible, among other things, for carrying out a periodic audit of PPP Contracts.10 The new body will include a dispute settlement committee to examine non-judicial appeals.11
- Creation of an inter-ministerial committee: a committee responsible for ruling on authorization requests to initiate a PPP Contracts award procedure. The rules relating to the composition, prerogatives and operation of the inter-ministerial committee will be set by decree.12
- Creation of a support fund: a support fund responsible for supporting and financing the preparation, awarding and execution of PPP Contract projects. A decree will set out the financing, organization and operation of the fund.13
Creation of new procedures
The New PPP Law adds new procedures for the award of PPP Contracts.
- Creation of two derogatory procedures for the award of PPP Contracts: the New PPP Law adopts the methods for awards provided for in the Former PPP Law,14 which it classifies into two categories, namely the procedures of ordinary law and the derogatory procedures. The New PPP Law adds two new derogatory procedures15:
- the competitive bidding procedure, the definition, conditions and implementation procedures of which will be set by decree;
- the competitive dialogue procedure, which allows the contracting authority, in the case of complex projects, to conduct a dialogue with candidates after an invitation to tender, in order to develop solutions that meet the needs of the contracting authority.16
- Creation of a private initiative offer: similar to the unsolicited offer under the Former PPP Law, the private initiative offer allows an economic operator to send a contracting authority a proposal for a PPP Contract project that is not in response to an invitation to tender. The admissibility criteria, conditions and modalities of implementation of the private initiative offer will be fixed by decree.17
- Replacement of the appeal to the Infrastructure Council by the administrative appeal: under the Former PPP Law, disputes arising from selection procedures were brought before the Infrastructure Council. The New PPP Law abolishes the Infrastructure Council.18 From now on, this type of dispute must be submitted in writing to the person responsible for the contract by way of an administrative appeal.19
- Clarification on disposal agreements: the Former PPP Law did not contain specific provisions on disposal agreements. Under the New PPP Law, the contract may be assigned if its terms provide and only with the prior agreement of the contracting authority.20 The assignee must present “sufficient financial, technical and legal guarantees”.21
- Clarification on securities: unlike the Former PPP Law, the New PPP Law specifies that the holder of a PPP Contract may grant securities to the funding agencies. However, the grant of such security is subject to the prior authorization of the contracting authority.22
Promotion of the involvement of the national sector
The New PPP Law promotes the involvement of Senegalese participants and businesses.
Notably, PPP projects whose estimated overall value before tax is below a threshold set by decree, may be reserved for national and Community companies.23
In addition, contracting authorities may include requirements in the award criteria set out in the bidding documents relating to the local content of the proposed public-private partnership project. These requirements may include, for example, the integration of local artisans and small and medium-sized enterprises.24
Under the Former PPP Law, the successful candidate for a PPP Contract had to commit to reserve a significant proportion of subcontracting for national operators.25 The condition is now stronger insofar as “subcontracting operations are reserved in priority for national or Community companies”.
The implementing decree which has not been published yet is expected to provide relevant clarifications to the new legislative provisions.26
1 Article 55 of the New PPP Law.
2 Article 2 of the New PPP Law.
3 Free translation of article 4 of the New PPP Law.
4 Article 23 of the New PPP Law.
5 Free translation of article 17 of the New PPP Law
6 Free translation of article 33 of the New PPP Law.
7 Article 7 of the New PPP Law.
8 Article 21 of the New PPP Law.
9 Article 9 of the New PPP Law.
10 Article 46 of the New PPP Law.
11 Article 3 of the New PPP Law.
12 Article 8 of the New PPP Law.
13 Article 11 of the New PPP Law.
14 Articles 13 and 29 of the Former PPP Law.
15 Article 28 of the New PPP Law.
16 Article 3 of the New PPP Law.
17 Articles 3 and 35 of the New PPP Law.
18 Article 36 of the Former PPP Law.
19 Article 50 of the New PPP Law.
20 Article 42 of the New PPP Law.
21 Free translation of article 42 of the New PPP Law.
22 Article 16 of the New PPP Law.
23 Article 26 of the New PPP Law.
24 Article 32 of the New PPP Law.
25 Article 25 of the Former PPP Law.
26 Free translation of article 40 of the New PPP Law.