PRESENTATION TO THE FOREIGN USER

Welcome to the Brazilian Public-Private Partnerships Federal Unit website. 

The public-private partnerships (PPP) are one of the possibilities available to Governments to offer economic and social infrastructure to the population. The international experience provides evidences that sense public-private partnerships projects are effective to achieve the best use of public resources, delivery infrastructure on time and on budget and provides higher levels of operational efficiency. One of the main characteristics of public-private partnerships that allows these results is the appropriate risk sharing between public and private sectors, which encourages innovation, efficiency, the use of public assets optimization. and consumer-satisfaction oriented management.

The Federal Act 11.079, 2004, regulates PPP in Brazil and sought to incorporate several concepts and international best practices as the variable payment to the private partner related to its performance, the objective risk sharing among the parties and the public guarantee fund.

According to Brazilian law the main characteristics of PPP are long term contracts (5 to 35 years), R$20.000.000,00 (twenty million reais) as a minimum value and typically consists of a civil works contract plus an operating contract.

As defined by Brazillian Federal Act no. 11.079, of 2004, PPP is a concession contract, in the sponsored or administrative forms. A sponsored concession is a concession of public services or public works as established in Act 8987, dated February 13th, 1995, when it involves, in addition to user charges, a direct payment from the public sector to the private partner. An administrative concession is a contract for the direct or  indirect provision of services to the Public Administration, even when it involves carrying out construction works or supplying and installing fixed assets. An ordinary concession, understood as the concession of  public services or public works set forth in Act 8987, dated February 13th 1995, shall not be considered a public-private partnership when no direct payment from the public sector to the private partner occurs.

PPP legislation has opened up more areas for private sector investment as a concession model, such as prisons, hospitals, sanitation, public transportation that do not allow charge users or, if it does, the user charges were not sufficient to attract private market

INTRODUCTION TO BRAZILIAN FEDERAL PUBLIC-PRIVATE PARTNERSHIPS NORMATIVE SYSTEM

The main Brazilian rule that regulates public-private partnerships is the Federal Act no. 11.079, of December 30th, 2004, (PPP Act) which sets general rules for PPP bidding and hiring in federal, state and municipal levels.

Administrative and sponsored concessions shall be regulated by PPP Act and additionally by Act 8987, dated February 13th, 1995, that deals with the granting and permission for public services economically self-sustaining. The Federal Act no. 8.666/1993 sets the general rules on public procurement and public contracts and may also apply to PPPs when neither the Federal PPP Act no. 11.079/2004 nor the Federal Concessions Act no. 8.987/1995 regulates the subject.

All these laws are subject to the Brazilian Federal 1988 Constitution, which establishes the performance limits, objectives and guidelines to be adopted in public procurement of public services, on State intervention in the economy, among others.

The following scheme presents a basic normative scheme to public-private partnerships (administrative and sponsored concessions:

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• Federal Act no. 11.079, of December 30th, 2004 (Public-Private Partnerships Act). Establishes general rules for bidding and contracting of public-private partnership in the context of public administration.
• Federal Act no. 8.987, of February 13th, 1995 (Public Services Concessions Act). Regulates the concessions of public services in line with article 175 of the Constitution.
• Federal Act no. 8.666, of June 21st, 1993 (Public procurement and administrative contract law). Regulates art. 37, line XXI, of the Federal Constitution, establishing standards for biddings and contracts to the public administration.
• Federal Act no. 9.074, of July 07th, 1995. Rules for granting and extending concessions of public services.

REFERENCE DOCUMENTS

Below you can find links and information related to public-private partnerships, some of that only available in Portuguese.

• Basic concepts. Introduction to public-private partnerships, sponsored and administrative concession forms, species of project modeling, among others.
• Frequently Asked Questions. Questions and answers about public-private partnerships. Your question may have already been answered.
• General information on PPP. Guides, manuals and specialized reference works about some topics, such as risk allocation, competition, hiring consultants and independent verifiers, drafting contracts, among others.
• Federal Projects. Information about federal PPP projects.