Legal forms of public private partnership in republic of lithuania

Public-private partnership has been widely used in many countries for many years already. Due to changes in politics and increasing demand from the side of society for qualified public services, this model of cooperation is becoming increasingly important in Lithuania. One of the main prerequisites for success of this type of projects is a legal certainty. Seeking to assure that, Lithuania has established a concept of “partnership”, a new legal form thereof and special rules for implementation of projects. The broad definition of the partnership, established in the Law on Investments, includes contracts of public procurement and privatization, however, the narrow definition is reflected by the special legal regulation, which provides that the rules for preparation and implementation of the partnership projects are applicable to concession and the general partnership between the government and private entities only. Apart from the concept of the “public-private partnership”, the Law on Investments also provides for a new legal form, i.e. general partnership between government and private entities, implementation of which is based on the Law on Public Procurement. A contract of general partnership between government and private entities meets the characteristics of the public procurement contracts which, in general, are wider. A contract of general partnership between government and private entities may be distinguished from a concession contract by two criteria, i.e. nature of remuneration and a part of an operating risk undertaken by a private subject. When evaluating the part of the operating risk, all relevant criteria should be taken into account, the amount of remuneration to the private subject being only one of them. The third form of public-private partnership specified by the European Commission – the institutionalised partnership – can be implemented on the basis of general provisions of the Law on Management, Use and Disposal of State and Municipal Property. Since a contract with mixed capital entity cannot be regarded as in-house relationship and the laws of the Republic of Lithuania do not regulate the procedure for selecting a member of a legal person, the institutionalized partnership can be set up by applying public procurement or concession awarding procedure. By way of summarizing it can be said that establishment of the new partnership form in Lithuania enables implementation of public-private partnership models, where remuneration to the private subject is paid by the public subject while the operating risk is not necessarily undertaken by the private subject. Models, where ownership of public property has to be transferred to the private subject, can be implemented as the institutionalized partnership