Senegal, like many African countries1, recently adopted on February 22, 2021 a new Act on Public-Private Partnership contracts (the Act). This Act repeals Act No. 2014-09 of February 20, 2014 relating to Public-Private Partnership (PPP) contracts in Senegal. The PPP Act is part of a broader effort to modernize and rationalize the legal regime for public-private partnerships and to strengthen the interests of the state and local economic actors.
The analysis below focuses on the key provisions of the new Senegalese PPP Act. It relates to the scope of application of the new Act, procurement and execution of PPP as well as those relating to dispute resolution. It includes a comparison with the previous act and best practices of PPPs within the region.
Scope of application
The Act applies to PPP contracts in various economic sectors excluding contracts concluded between state contracting authorities, PPPs concluded in certain sectors (mining, energy and telecommunications), contracts involving the essential interests of the state (particularly in the areas of defense and security), those concluded under exclusive rights, contracts involving a quasi-regulatory situation and contracts involving the privatization or transfer of companies, property and infrastructure equipment of the state contracting authorities2.
The Act is also intended to apply to both PPP using public funds and user-pay PPP. It thus tends to harmonize the public procurement regime lato sensu, unlike the previous act which applied only to PPPs using public funds.
In addition, the Act is applicable to all transactions for which the notice of public call for tenders was published after its entry into force3. It is worth mentioning that such a provision does not seem to take into account the other ways in which PPPs are concluded and the stages of procurement that are specific to them, which do not necessarily include the stage of publication. This is the case, for example, for private initiative bidding procedures (a concept that replaces the notion of unsolicited bidding) and direct agreement procedure (entente directe).
The institutional framework is being overhauled with the establishment of new bodies such as the inter-ministerial council, which seems to replace the role played by the prime minister (an institution currently abolished in Senegal) in the previous act, and the newly established PPP support fund with a mission to support and finance the preparation, awarding, and execution of PPP contracts.
The Act creates an entity responsible for regulating public procurement as a PPP regulatory body. While such an innovation is part of an institutional rationalization, it is important to note that the entity is initially intended for public procurement that is relatively different from a PPP. Therefore, the law governing the public procurement regulatory entity should be adapted to take into account the specificities of the PPPs that it would henceforth regulate.
Procedures for the conclusion of PPP contracts
The conclusion of PPPs involves several phases strictly regulated by law.
Screening assessment phase
The main innovation in the 2021 Act relates to the establishment of the National PPP Support Unit, which provides an advisory opinion on whether or not to conclude PPP contracts. More generally, the role of this entity is to assist and advise contracting authorities at all stages of the PPP project life cycle.
Budgeting and accounting
This prerequisite is one of the main innovations of the Act, which is consistent with the challenge of fiscal sustainability in indebted African countries such as Senegal4. It is also in line with the organic law on finance, which allows the state to provide for authorizations covering the entire legal commitment from the year in which the PPP contracts are concluded5.
Choice of type of procurement procedure
To simplify, the Act reorganizes various types of procedures for awarding PPPs6:
- Open one-stage bidding with or without pre-qualification
- Open bidding in two stages preceded by pre-qualification
- Restricted tendering
- Call for tenders with competition
- Competitive dialogue procedure
- Direct agreement procedure
Dematerialization of procedures
The legal consecration of dematerialized procurement procedures is a major innovation7. The exchange of information and communication in the context of procurement can now be done electronically with reliable and generally used technical means and in accordance with the conditions to be set by PPP further regulation.
The Act specifies that contracting authorities may include local content requirements in tender documents depending on the purpose of the project and the socio-economic and environmental context8.
There is also a local content requirement regarding the establishment of the project company in charge of the execution of the PPP contract9. A part of the shareholding of this company should be reserved for national economic operators. The Act refers the determination of the local participation to its application texts, contrary to the previous act which provided for 20%10.
Specific procedures for the awarding of PPP contracts
This refers to offers of private initiative, program agreements and projects financed by an international organization. If the offer of private initiative and projects financed by an international organization is already included in the former law, the program agreement is a legal innovation whose implementation modalities will be set, according to the law, by regulation. The Act only specifies that the program agreement is an agreement that allows several economic operators to be pre-selected with a view to concluding an agreement establishing all or part of the rules relating to public-private partnership contracts for similar needs to be concluded during a given period11.
Assessment and audit of PPP contracts
The assessment and audit are carried out during the execution of partnership contracts by the National PPP Support Unit and the entity in charge of regulating PPPs respectively, and in accordance with further legal and regulatory procedures. This assessment is without prejudice to other audit or control procedures provided for in the texts in force in Senegal12.
The Act distinguishes between the different types of PPPs to determine the appropriate dispute resolution mechanism.
During the course of the partnership contract, disputes arising from the PPP procurement procedures are brought before the legal representative of the contracting authority for the procurement and execution of PPP contracts before any litigation proceedings. There has been a change in the addressee of the administrative appeal, which under the previous act was brought before the Infrastructure Board.
Disputes related to the execution or termination of PPP contracts are settled beforehand by the dispute resolution committee of the PPP regulatory body. If the amicable settlement fails, the dispute is referred to the Senegalese courts or to the arbitral tribunals if any. In any event, the settlement phase thus determined is no longer mandatory if the parties have agreed to appoint an independent expert for the amicable settlement of their dispute.
However, it is important to specify that since arbitration is the usual method of dispute settlement for PPP projects, it would be appropriate for the Senegalese State to refer to arbitration by the Common Court of Justice and Arbitration (CCJA) in view of the commitment made by OHADA member States to promote CCJA arbitration13.
Finally, the new Act brings major innovations, particularly in terms of legal certainty and modernization of the PPP regime. The further implementing regulations should be a key factor to ensure a full implementation of the new Act.
5Article 18 of the organic law n°2020-07 of February 26, 2020 relating to finance laws
10Article 23 of the Old PPP Act
12Articles 45 and 46
13See, for example, Togo's 2012 Investment Code (Article 8), Mali's 2012 Investment Code (Article 29), Guinea's 2015 Investment Code (Article 43).