Damian Gonzalez
On April 21st 2016, a decree was published in the Diario Oficial de la Federacion in which it was established to remove and reform several dispositions of the Public and Private Associations Law. (PPAL)
The projects of Public and Private associations regulated by this law are the ones celebrated in order to establish a long term contract, between both private and public sector, so they can trade services to the public sector, wholesalers, intermediaries or to any other user and other projects that utilize from the private sector either partially or a total part of an infrastructure to build objectives that increase social benefits and high levels of investment in the country.
The procedure to establish a contract in a project of public and private association can only be initiated in:
a) Projects of public and private association that involve resources of Expenditure Budget of the Federation, when:
- The decree refers to art. 14 of the PPAL
- The investment refers to art. 34 of Ley Federal de Presupuesto y Responsabilidad Hacendaria
- Authorized by Comisión Intersecretarial de Gasto Público, Financiamiento y Desincorporación
b) Projects that involve Federal Public Resources, and the amount was not contemplated in the Expenditure Budget of the Federation, needing previous part a) and b) requirements.
c) Projects that involve Federal Public Resources, and the amount was not contemplated in the Expenditure Budget of the Federation, need a ruling of viability, in terms of the PPAL.
Whenever they pretend to do new projects of public and private associations, and other modifications in the projects previously authorized, and those projects involve resources of the Expenditure Budget of the Federation, they will be analyzed and, if so, authorized during the fiscal year corresponding, by the Comisión Intersecretarial de Gasto Público, Financiamiento y Desincorporación, that should adjust to the limit amount previously approved by the Cámara de Diputados.
The Federal Executive, through the Secretaria de Hacieda y Crédito Público, will send the proyects to the Camara de Diputados so that they could be discussed and taken into consideration by the Comision de Presupuesto y Cuenta Pública, the Comisión should publish a resolution in no more than 30 working days, and in case the Comisión fails to do so, the projects will be considered as approved.
The project should consider the expenses to be made once the project of public and private association is approved in the fiscal year corresponding. The information should consider the details of the projects, amounts and estimations, development and execution of the project and annual payment compromised in case those projects where established to be done a long term contact.
On Project Proposals not contemplated, the department or federal entity could publish in the Diario Oficial de la Federacion or on their main web page, an agreement establishing the proposals of the projects they are willing to receive and specifying goals, dates, strategies, objectives and will only be receiving projects that contemplate those requierements.
In case there is a conflict in the adjudication of the project, the Ley Federal del Procedimiento Contecioso Administrativo foresees an appeal in trial.
Concerning the requirements in the contract, they should also include a resignation clause, including refund and contractual penalty.
The department or federal entity could participate also in the collaboration, preparation, execution, trade services and any other part concerning the development of the Project whenever they consider them to be affecting their interest or failing to accomplish their obligations causing risk in the attempt of development of the project.
The department or federal entity could also designate an interventor or interventors so that they can be involved in the development of the project.