LEGAL REGULATIONS

Transcription

1 El Peruano / Friday September LEGAL REGULATIONS LEGISLATIVE DECREE 1224 THE PRESIDENT OF PERU WHEREAS: Pursuant to Law 30335, the Congress of the Republic has delegated powers in the Executive Branch to legislate on administrative, economic and financial issues for a ninety (90) calendar day term; In this regard, subsection a) under article 2 of said legal instrument establishes the power of legislating to promote, foster and advance public and private investment, as well as public private partnerships; It is indispensable to have a single regulatory framework to promote private investment through public private partnership and projects connected to assets to contribute to vitalize the domestic economy, generate productive employment and increase; Pursuant to subsection under a) article 2 of Law and article 104 of the Constitution of Peru; With the approving vote of the Council of Ministers; and the commitment to report to the Congress of Peru, the following Legislative Decree has been passed: LEGISLATIVE DECREE ON THE PRIVATE INVESTMENT PROMOTION FRAMEWORK THROUGH PUBLIC PRIVATE PARTNERSHIPS FOR PROJECTS ON ASSETS TITLE I PRELIMINARY TITLE Article 1. Objective The Framework Law to Promote Private Investment through Public Private Partnerships and Projects on Assets aims at establishing private investment promotion processes and modalities for developing public infrastructure, utilities, and related services, applied research and/or technological innovation projects and the implementation of projects on assets. Article 2. Scope This Legislative Decree applies to public entities in the Non-Financial Public Sector pursuant to Law 30099, Law on Strengthening Fiscal Responsibility and Transparency. Article 3. Private investment 3.1 Private investment promotion through Public Private Partnerships and Projects on Assets is declared of national interest to contribute to vitalize the domestic economy, generate productive employment and increase competitiveness in the country. 3.2 The State s role includes follow-up and actions to facilitate timely implementation of projects developed under the modalities regulated in the Legislative Decree herein. Article 4. Principles In all stages linked to development of projects regulated by the Legislative Decree herein, the following principles apply: a) Competition Private investment promotion processes promote competition, equal treatment among bidders and prevent anti-competitive or collusive conducts. b) Transparency All the quantitative and qualitative information used for decision making when evaluating, developing, implementing and accounting for a project undertaken within the framework of the Legislative Decree herein is public, under the publicity principle set forth in article 3 of the Single Conformed Text of Law 27806, Law on Transparency and Access to Public Information, passed by Supreme Decree PCM. c) Results driven approach When undertaking their activities, public entities carry out actions that lead to timely implementation of private investments. They also identify and report any existing hurdles that affect development of Projects regulated by the Legislative Decree herein. d) Planning The State, through its Ministries, Regional and Local Governments, prioritizes and guides the orderly development of Public Private Partnerships and Projects on Assets responding to national, sectorial, regional and local priorities, and considering the country s decentralization policy in doing so. e) Budgetary responsibility The State s purchasing power should be considered to assume financial, firm and contingent commitments, directly and indirectly derived from execution of contracts entered into within the framework of the Legislative Decree herein, not compromising the budgetary balance of public entities, public finance sustainability or regular supply of public services in the short, mid and long term. TITLE II INSTITUTIONAL FRAMEWORK Article 5. National Private Investment Promotion System 5.1 The National Private Investment Promotion System is a functional system for developing Public Private Partnerships and Projects on Assets made up by principles, regulations, procedures and regulatory technical guidelines, aiming at promoting, fostering and speeding up private investment to contribute to dynamize the domestic economy, generate productive employment and increase competitiveness in the country. 5.2 The Ministry of Economy and Finance is the ruling entity and maximum regulatory technical authority of the National Private Investment Promotion System. It ensures compliance with the promotion and development policy of Public Private Partnerships and Projects on Assets with the participation of all State entities at different government levels within their competences The National Private Investment Promotion System is made up by the Ministry of Economy and Finance, as the ruling entity, National Government Ministries and public agencies, the Private Investment Promotion Agency, Regional and Local Governments. Article 6. Agencies that Promote Private Investment 6.1 In the case of the National Government, Private Investment Promotion Agencies are Proinversión the Private Investment Promotion Agency for projects assigned to it according to their national relevance, and the Ministries through the Investments Committee. 6.2 In the case of Regional and Local Governments, the Private Investment Promotion Agency is the Investment Committee. The senior Organization at these levels is the Regional Council or the Municipal Council. 6.3 Ministries, Regional and Local Governments can commission the promotion process to Proinversión and request it to provide them technical aid at any process stage.

2 LEGAL REGULATIONS Friday, September 25, 2015 / El Peruano Article 7. Ministry, Regional and Local Governments 7.1 The Ministries, Regional and Local Governments in charge of the project to be developed through the modalities regulated in the Legislative Decree herein are charged with the following: a. Plan the investment project portfolio as regulated in the Legislative Decree herein. b. Identify, prioritize and formulate projects to be implemented under the modalities regulated in the Legislative Decree herein, charging Proinversión with the preparation of the respective studies. c. Prepare the Evaluation Report, which can be commissioned to Proinversión. d. Coordinate the development of Private Investment Promotion processes with the Private Investment Promotion Agency. e. Sign contracts derived from the modalities regulated in the Legislative Decree herein. f. Manage and administer contracts derived from modalities regulated in the Legislative Decree herein and comply with contractual obligations under their charge. g. Enforce sanctions due to breach of contract, except if said function has been assigned or delegated to the respective regulatory agency. h. Amend contracts according to conditions set forth in the Legislative Decree herein and its Regulation. i. Follow-up physical and financial implementation of projects regulated in the Legislative Decree herein under its mandate. j. Justify budgetary capacity to assume commitments in Public Private Partnership contracts and their amendments. k. Declare suspension or termination of contract when the causes foreseen to do so occur under the contract. l. Other functions pursuant to the current legal framework. 7.2 The Ministry, Regional Government and Local Government shall assign a department inside their organizational structure or assign the Investment Committee the tasks pertaining to contract execution. Article 8. Investment Committee 8.1 The Ministry, Regional Government and Local Government that has any projects or foresee developing private investment promotion processes under the modalities regulated in the law herein will create the Investment Committee to perform as: a. Private Investment Promotion Agency for promotion processes under its mandate pursuant to article 6. The Vice-Ministry, Regional Council and Municipal Council act as Proinversión s Steering Council; and b. Coordination department with Proinversión in promotion processes under Proinversión s competence or charged to it. 8.2 Investment Committee members are appointed by Ministry Resolution, Regional Governor Resolution or Mayor Resolution, which shall be published in El Peruano, the official gazette, and reported to the National Public Private Partnership Contracts Registry. 8.3 As coordination organization, the Investment Committee: a. Coordinates with each Ministry, Regional Government and Local Government agency to forward processes and procedures in each promotion case as public entity responsible before Proinversión. b. Look after implementation of decisions adopted by the Steering Council and Special Proinversión Committees in connection to promotion c. processes notwithstanding the functions assigned to different agencies inside each public entity. Also, timely information requested by involved entities. d. Other functions assigned by Regulation. 8.4 The Investment Committee is responsible for timely preparation of the Multi-annual Public Private Partnership Investment Report. Article 9. Specialized Investment Follow-up Team The Specialized Investment Follow-up Team aims at coaching investment projects to be developed under mechanisms regulated by the Legislative Decree herein at all their stages, pursuant to the Ninety First Final Complementary Provision in Law 30114, Public Sector Budget Law for Fiscal Year 2014 and Article 38 in Law 30327, Law on Promotion of Investments for Economic Growth and Sustainable Development. Article 10. Supervision of Public Private Partnership Contracts 10.1 In the case of projects in regulated industries, supervision is subjected to Law 27332, Framework Law on agencies that regulate Private Investments in Utilities and current legislation Public Private Partnership contracts contain necessary provisions to ensure timely and efficient supervision during contract implementation, mainly safeguarding service level fulfillment. TITLE III PUBLIC PRIVATE PARTNERSHIPS CHAPTER I General Provisions Article 11. Definition 11.1 Public Private Partnerships are private investment participation modalities that incorporate experience, knowledge, teams, technology and in which risks and resources -preferably private- are distributed to create, develop, improve, operate or maintain public infrastructure and/or supply public services under contractual mechanisms allowed by the current legal framework. Public Private Partnerships are generated by government or private initiatives Public Private Partnerships contracts are long term. They shall include appropriate risk distribution between the parties so that risks are assigned to the party that is best capable to manage them, considering the project risk profile. Likewise, at all phases in their development, Public Private Partnerships shall consider the principle of value for money, seeking the optimum combination between costs and public service quality offered to users along the project life A Public Private Partnership project can be developed regarding one or more public investment projects provided that they are declared viable within the framework of the National Public Investment System The Government, through any of its public entities, and one or more private investors participate in Public Private Partnerships. Article 12. Contracts 12.1 The Public Private Partnership contract is sufficient title for the investor to uphold the right granted by said contract vis-a-vis third parties, particularly collecting tariffs, prices, tolls or other investment recovery systems, as well as additional benefits expressly agreed in the contract, including complementary services. The investor can exploit the asset or assets pertaining to the Public Private Partnership on its own or through third parties, remaining the sole responsible vis-a-vis government. Notwithstanding the aforementioned, the modality of concession to the investor regarding public assets does not grant a real right on them The investor cannot unilaterally establish exemptions in favor of any user, except as established by express law.

3 El Peruano / Friday 25 September, 2015 LEGAL REGULATIONS Article 13. Classification The Evaluation Report in charge of the Ministry, Regional Government or Local Government classifies the Public Private project as: a. Co-financed: this is a Public Private Partnership project that requires co-financing or granting or contracting of financial guarantees or nonfinancial guarantees that have significant probability of requiring co-financing. b. Self-financed: this is a Public Private Partnership project with the capacity to generate its own revenues, which does not require co-financing and fulfills the following conditions: - Minimum or no financial guarantee requirement by Government, pursuant to the Regulation of the Legislative Decree herein. - Non-financial guarantees have no or minimum probability of requiring co-financing, pursuant to the Regulation of the Legislative Decree herein. Article 14. Stages 14.1 Notwithstanding their classification and origin, Public Private Partnerships are subjected to the following stages: a. Planning and programming: this comprises planning of projects and commitments and can include intervention needs through the Public Private Partnership modality, under the responsibility of the Ministry, Regional Government and Local Government, which are included in the multi-annul Public Private Partnership Investments Report, on February 16 every year at the latest. Submission of private initiatives is not limited to the contents in the referred report. b. Formulation: this comprises project design and/or evaluation by the Ministry, Regional Government or Local Government, or by Proinversión within their competences. In case of co-financed Public Private Partnerships that contain one or more Public Investment project, formulation is subjected to the National Public Investment System Regulations. Any study required for formulating projects can be prepared by a private entity according to current regulations or by any entity proposing a private initiative, if such is the case. c. Structuring: this comprises Public Private Partnership project design, including economic financial structuring, retribution mechanism if it so corresponds, risk assignment and contract design by the Private Investment Promotion Agency, which coordinates with the corresponding Ministry, regulatory agency and with the Ministry of Economy and Finance. d. Transaction: this comprises opening of the project to the market. The Private Investment Promotion Agency receives and evaluates bidder comments, determines the applicable mechanism, such as public tender, comprehensive project tender or other competitive mechanism. In the case of private initiatives, this stage starts with the Declaration of interest publication. c. Contractual execution: it comprises the Public Private Partnership contract effectiveness period, under responsibility of the Ministry, Regional Government or Local Government. Likewise, this comprises follow-up and supervision of contractual obligations The requirements and procedures of each stage are established in the Regulation as well as the terms, if it so corresponds. Article 15. Criteria for incorporating projects to the promotion process 15.1 The promotion process comprises the Structuring and Transaction stages. The Regulation establishes requirements, opportunity and eligibility criteria of projects to be incorporated to the promotion processes Projects incorporated by the National Government are ratified by Supreme Resolution endorsed by the respective Ministry and the Ministry of Economy and Finance, except for assumptions in article 30. In regional or local projects, incorporation is done through the Regional Council or Municipal Council Agreement. Article 16. Prior opinions 16.1 Before the Public Private Partnership project is awarded, the Private Investment Promotion Agency, with no exception and under responsibility, shall count on the following opinions: a) Prior favorable opinion by the Ministry, Regional Government and/or Local Government regarding the Public Private Partnership contract final version, according to their competences. b) Non-binding prior opinions by the regulatory organ regarding the Public Private Partnership contract final version, exclusively on issues referred to their legal competences. c) Prior favorable opinion by the Ministry of Economy and Finance regarding the Evaluation report and the Public Private Partnership contract final version. The contract and its award are null and void in full right, except as pointed out in subsection 16.4 of the article herein, if the Ministry of Economy and Finance does not have a favorable opinion on the Public Private Partnership contract final version Prior report by the General Comptroller s Office regarding the Public Private Partnership contract final version can only refer to aspects that compromise the government s credit or financial capacity pursuant to subsection l) article 22 Law 27785, Organic Law of the National Control System and the General Comptroller s Office. Said prior report is not binding, notwithstanding further control Reports and opinions are issued one single time per entity, except if the Private Investment Promotion Agency requests additional reports and opinions. The terms and procedures for issuing reports and opinions are established in the Regulation Once prior reports and opinions have been requested and if they are not issued within foreseen terms, they are not considered as favorable The Ministry of Economy and Finance publishes the reports it issues regarding the contract final version. Article 17. Grantee offer The regulatory agency and the Ministry, Regional Government or Local Government will look after compliance with the terms and conditions proposed in the grantee offer, which are included in the Public Private Partnership contract. Article 18. Impediments The persons referred to in article 1366 of the Civil Code, the persons with impediments set forth in Legislative Decree 1017 or any law that supersedes it, the persons with impediments stipulated by Laws, or those who have been investors in Public Private Partnership contracts and are no longer so because of breach of contract cannot participate as bidders or investors, either directly or indirectly. The latter impediment is extended to their strategic partners and/or to those who have exercised control of the investor when the contract was resolved and/or terminated.

4 LEGAL REGULATIONS Friday 25, September, 2015 / El Peruano CHAPTER II Public Private Partnership Development Article 19. Term Projects under the Public Private Partnership modality are granted for the term mentioned in the contract which, in no case, shall exceed sixty years, except for shorter terms established in a special regulation. The contract term starts on the date it is signed, Article 20. Asset regime 20.1 Assets which are integral or ancillary to the Public Private Partnership Project cannot be transferred separately from it, mortgaged, pledged or subjected to burdens of any kind during the contract term without approval by the Ministry, Regional Government or Local Government. At the end of the contract they revert to the State The investor can transfer its right pertaining to the Public Private Partnership contract to another corporation following its approval by the Ministry, Regional Government and Local Government and pursuant to limitations set forth in Public Private Partnership contracts. Article 21. Trust Fund 21.1 The Ministry, Regional Government and Local Government can set up a trust fund to manage payments and revenues derived from Public Private Partnership contracts Trust funds are previously approved by the corresponding Ministry Resolution. In the case of Public Private Partnerships pertaining to Regional Government and Local Governments, trust funds are previously approved by a Regional Council agreement or a Municipal Council agreement, as appropriate. In both cases the previous favorable opinion of the Ministry of Economy and Finance is required when they are cofinanced Public Private Partnerships. Article 22.- Contractual amendments 22.1 The Government, in agreement with the investor, can amend the Public Private Partnership contract, keeping its economic-financial balance and competition conditions in the promotion process pursuant to conditions and requirements set forth in the Regulation In a maximum term of 10 working days following addenda request reception, the Ministry, Regional Government or Local Government calls the public entities that have to issue an opinion to the proposed addenda. These entities attend the joint evaluation process, in which the investor can also be called. As this stage, information on project design and contract can be requested from the Private Investment Promotion Agency in charge of the promotion process that originated the contract, or the organ in charge Once the joint evaluation process ends, the Ministry, Regional Government and Local Government evaluates and substantiates contractual amendments, and request the non-binding opinion of the respective regulatory agency on projects under their competence. Previous favorable opinion of the Ministry of Economy and Finance is required in case of issues under its charge. The agreements that contain amendments to the Public Private Partnership contract which do not have a prior favorable opinion of the Ministry of Economy and Finance are null and void in full right The terms and procedures provided in the article herein are established in the Regulation. If no opinion is issued within foreseen terms, they are considered as favorable. 26 Article 23. Dispute settlement 23.1 Public Private Partnership contracts shall include arbitration as dispute settlement mechanism. Likewise, they can include the intervention of a neutral third party at the direct settlement stage. This third party is called Amiable Compositeur, and proposes a dispute settlement formula, which is partially or totally accepted by the parties and has the legal effect of a transaction. The public entity will guarantee timely participation of regulatory agencies in arbitration processes so that they assist with due Government sponsorship. The corresponding arbitrator or Arbitration Tribunal is obliged to let regulatory entities participate Besides, the parties can submit their disputes to a Dispute Settlement Board pursuant to provisions in the contracts. The decision of such board is binding for the parties, which does not limit their right to having recourse to arbitration Procedures, eligible institutions, terms and conditions to elect, appoint and/or make up the Amiable Compositeur and the Dispute Settlement Boards are established in the Regulation The aforementioned is not applicable in the case of international investment disputes pursuant to Law 28933, in which the dispute is submitted to an International Dispute Settlement Mechanism referred to in said law The services to be provided by the Amiable Compositeur, Dispute Settlement Board members, centers or institutions that manage the aforementioned alternative Dispute Settlement Mechanisms are not included within the application of Legislative Decree 017, which approves the Law of Contracts with Government or any instrument that supersedes it, provided that said services are requested within execution of Public Private Partnership contracts. CHAPTER III Guarantees Article 24. Securities and guarantees 24.1 Public Private Partnership contracts can have clauses that stipulate indemnities to which the investor will be entitled in case Government unilaterally suspends or nullifies the contract or due to breach of contract. Said indemnity clauses are guaranteed through a contract entered into between Governments and the investor by request of the latter party According to article 1357 in the Civil Code, Government is authorized to grant any securities and guarantees deemed necessary to protect their investments pursuant to current legislation through Supreme Decree to individuals and corporations, both domestic and foreign, which make investments under the protection of this legal instrument. In the case of Public Private Partnership contracts, article 19 in the Single Conformed Text of Regulations with a Rank of Law that rule concessions to the private sector of public infrastructure and utilities works approved by Supreme Decree PCM is applicable. Article 25. Authorization for granting guarantees 25.1 In the case of concessions of public infrastructure and utilities works, the Ministry, Regional Government or Local Government can authorize the investor to contract a mortgage on the concession right. Said mortgage enters into effect as from its registration in the National Public Registry Superintendence. The mortgage can be executed out of courts as agreed by the parties when the obligation was generated with the participation of Government and creditors The favorable opinion by the corresponding Ministry, Regional Government or Local Government is required to executing the mortgage, so that the concession right can only be transferred on behalf of anyone who fulfills at least the requirements set forth in the promotion process document.

5 25.3 Guarantee on revenues vis-a-vis obligations derived from Public Private Partnership contracts and their exploitation, as well as movable collateral on the investor s stocks or shares can be stipulated, among others. Article 26.- Government Guarantees 26.1 Guarantees in the Public Private Partnership modality are classified as: a. Financial Guarantees: these are unconditional securities of immediate execution, which granting and contracting by Government aims at backing up the obligations of the Ministry s Regional Government s or Local Government s counterpart, derived from loans or bonds issued to finance Public Private Partnership projects or to back up Government payment obligations. b. Non-financial Guarantees: these are securities stipulated in the Public Private Partnership contract that can generate payment obligations by Government due to the occurrence of one or more risk events pertaining to the Public Private Partnership project Following agreement of its Steering Council, Proinversión has the power to request the Ministry of Economy and Finance, commissioned by the Ministry, Regional Government or Local Government, the granting or contracting of financial guarantees by the National Government on behalf of the Ministry s Regional Government s or Local Government s counterpart. Article 27.- Firm and contingent commitments Firm and contingent commitments assumed by public entities in Public Private Partnership projects are classified as follows: a. Firm commitments: These are specific amounts or quantifiable payment obligations on behalf of the counterpart, corresponding to a consideration for implementing actions stipulated in the Public Private Partnership contract. b. Contingent commitments: These are possible payment obligations on behalf of the counterpart stipulated in the Public Private Partnership contract derived from the occurrence of one or more events corresponding to risks in the Public Private Partnership project. Article 28. Commitment Registration 28.1 The Ministry of Economy and Finance is authorized to issue the corresponding provisions for appropriate registration of quantifiable firm and contingent commitments, guarantees, liabilities and other related and linked instruments, as well as of the revenues derived from projects executed under the Public Private Partnership modality. To this effect, any corresponding public entity that has information, supplies it, under responsibility, to the Ministry of Economy and Finance in the terms and conditions that said Ministry sets forth Article 29. Limit 29.1 The stock accumulated through quantifiable firm and contingent commitments net of revenues assumed by the non-financial Public Sector in Public Private Partnership contracts calculated at present value cannot exceed 12% of the Gross Domestic Product This limit can be revised every three years and amended by Supreme Decree endorsed by the Ministry of Economy and Finance, taking into account infrastructure and utilities requirements in the country and impact of commitments on public finance sustainability The indicators, parameters and calculation methodologies for quantifiable firm and contingent commitments, available expenditures and liabilities to be assumed by public entities in Public Private Partnership contracts are set forth by Ministry Resolution of the Ministry of Economy and Finance,. CHAPTER IV Simplified procedure Article 30. Simplified procedure 30.1 Projects aimed at developing services related to public infrastructure or utilities that Government needs to supply, applied research and/or technological innovation projects, and Public Private Partnerships that do not contain an investment component are processed thrrough a simplified procedure according to stages and terms established in the Regulation. In this simplified procedure, the Ministry, Regional Government, Local Government or Proinversión act as Private Investment Promotion Agencies according to relevance and magnitude criteria. However, the Ministry, Regional Government or Local Government can charge Proinversión with developing the procedure. TITLE IV PROJECTS ON ASSETS Article 31. Definition 31.1 Ministries, Regional Governments and Local Governments promote private investment on assets they hold through the respective Private Investment Promotion Agency, under the following schemes: a) Asset availability, including total or partial transfer, even through a real estate swap. b) Use transfer, leasing, usufruct, surface or other contract modalities permitted by law Contracts of Projects on Assets cannot commit public resources or transfer risks to the public entity except if there is an express legal provision Proinversión, Regional Governments and Local Governments, as Private Investment Promotion Agencies, determine the project s economic conditions, revenues on behalf of Government and, if such is the case investment commitments In case the project so requires, trust funds can be set up pursuant to article 21 in the regulation herein in whatever corresponds. Article 32. Award process In the case of Projects on Assets, the award process is managed through a simplified procedure according to stages and terms set forth in the Regulation. TITLE V PRIVATE INITIATIVES Article 33. Nature of Private Initiatives Private initiatives are mechanisms through which the private sector submits projects for developing Public Private Partnerships, Projects on Assets and projects regulated by Legislative Decree 674 related to Government companies. Private initiatives are submitted by domestic or foreign corporations, by corporation consortia, or by consortia made up by individuals and domestic or foreign corporations

6 LEGAL REGULATIONS Friday 25, September, 2015 / El Peruano 33.2 Nationwide private initiatives regarding selffinanced Public Private Partnerships, Projects on Assets and projects regulated by Legislative Decree 674, as well as co-financed private initiatives at every Government level are submitted to Proinversión, which assumes the competence of Private Investment Promotion Agency. Formulation of co-financed private initiatives is subjected to the ninety sixth final complementary provision in Law 29951, Law on Public Sector Budget for fiscal year Private initiatives for self-financed Public Private Partnerships and Projects on Assets at regional or local level are submitted to Private Investment Promotion Agencies in Regional Governments or Local Governments, as appropriate Private initiatives are not enforceable as mentioned in article 112 in Law Law on General Administrative Procedure, in whatever is relevant. Consequently, the proposing party s right is extinguished by submitting the private initiative to the private investment promotion agency with no possibility to question or challenge the pronouncement either administratively or judicially. Private initiatives are not enforceable until the corresponding tender is called, in which case provisions in the respective documents and/or the applicable legislation are applied in whatever pertinent, or until the corresponding contract is signed if directly awarded due to lack of interested third parties Private Investment Promotion Agencies will keep the confidential and reserved character of private initiatives submitted to them, under responsibility. This obligation extends to public entities, public officials, advisors, consultants or any other person who due to his/her position, function or service learns about submission and content of private initiatives. The confidential and reserved character of private initiatives is kept until the Declaration of Interest. Article 34.- Submission of co-financed private initiatives 34.1 The presentation of co-financed private initiatives for projects to be totally or partially financed by the National Government is done at the time and on the matters defined by Supreme Decree endorsed by the requesting ministries and the Ministry of Economy and Finance. The ministries included in the Supreme Decree must publish their needs of intervention in public infrastructure and utilities; services related to them, applied research and/or technological innovation, as well as the maximum budgetary capacity they have to assume said commitments, previously informed by the Ministry of Economy and Finance Submission of co-financed private initiatives for projects to be financed by Regional Governments or Local Governments is done annually at Proinversión during the term defined by Regulation. Before, the Regional Government and the Local Government publish their needs of intervention in public infrastructure and utilities; services related to them, applied research and/or technological innovation, as well as the maximum budgetary capacity they have to assume said commitments, previously informed by the Ministry of Economy and Finance. Article 35.- Procedure 35.1 Submission, prioritization, formulation and structuring of periods and procedures for private initiatives are set forth in the Regulation If 150 calendar days have elapsed following publication of the Declaration of Interest and if no third party has expressed an interest in implementing the project, direct award in favor of the private initiative proposal is granted Private initiatives for projects regulated by Legislative Decree 674 are processed according to the simplified procedure stipulated in the Regulation. Article 36.- Reimbursement of expenditures on behalf of the proponent In case the proponent participates in the promotion process that has been called and submits an economic proposal that is declared valid, any expenditures effectively incurred and directly related to the preparation of the private initiatives including expenditures corresponding to pre-investment studies, if such is the case, as well as the greater expenditures caused by the preparation of additional information requested by the Private Investment Promotion Agency are acknowledged in favor of the proponent, provided that the Private Investment Promotion Agency deems they are reasonable and have been duly substantiated. Provisions in this subsection are not applicable if the initiative proponent has been favored with the contract award. TITLE VI PROINVERSIÓN Article 37.- Proinversión 37.1 Proinversión is in charge of designing and concluding the Private Investment Promotion process through the Public Private Partnership and Projects on Assets modality under their competence, unifying decision making in the process pursuant to the Legislative Decree herein, as well as to the functions assigned in the ninety sixth final complementary provision of Law 29951, Law on Public Sector Budget for fiscal year Proinversión is in charge of supplying technical assistance to public entities on planning, programming and formulation of Public Private Partnerships and Projects on Assets Proinversión is governed by commands a Steering Council and includes several Committees. Proinversión is ruled by its organization and functions Regulation, as well as by any Agreements adopted by the Steering Council The Steering Council is the highest authority in Proinversión. It is made up by five State ministers. Its members are appointed by Supreme Resolution endorsed by the President of the Council of Ministers and the Minister of Economy and Finance The Steering Council assumes the corresponding competences referred to design and conduction of private investment promotion processes, under mechanisms and procedures set forth in the Legislative Decree herein, as follows: a. Approve incorporation of projects to the promotion process. b. Analyze, evaluate and approve proposals submitted to Special Committees, ensuring process consistency. c. Assume all the competences towards contract award to Public Private Partnerships and Projects on Assets under the mechanisms and procedures established in the legal instrument herein. d. Approve, following Special Committee proposal, the modality under which Public Private Partnership projects will be awarded contracts, e.g. Special Public Tender or Comprehensive Projects Tender or another competitive process. e. Approve the Private Investment Promotion Plan by proposal of the Special Committee, as well as the Documents and Contract Final Version before any competitive process regulated in the Law Decree herein. f. Approve its budget and manage any financial resources required for compliance with its functions. g. Approve guidelines that regulate Proinversión s internal processes. h. Other functions set forth in the Regulation.

7 El Peruano / Friday, 25 September, 2015 LEGAL REGULATIONS Article 38.- Special Committees 38.1 Special Committees are formed Agreement of the Steering Council ratified by Supreme Resolution aiming at conducting the corresponding promotion process. The Steering Council determines the number and makeup of Special Committees according to involved issues and existing procedural load. The provisions in this subsection do not apply to the Special Committees created by the ninety sixth final complementary provision in Law 29951, Law on Public Sector Budget for fiscal year The Committees act collectively according to the private investment promotion policy. Said Committees directly report to the Steering Council and their functions are stipulated in Proinversión s Organization and Functions Regulation. Article 39. Publication of agreements 39.1 In actions referred to approving the private investment promotion modality and its amendments, the Private Investment Promotion Plan and its amendments, and the Public Private Partnership projects under the charge of Proinversión only require approval of its Steering Council through agreement published in El Peruano, the official gazette Any actions referred to approving the private investment promotion modality and its amendments, the Private Investment Promotion Plan and its amendments, and the Projects on Assets in charge of Proinversión requires the approval of Steering Council through agreement ratified by Supreme Resolution, endorsed by the Minister of the corresponding sector The publications referred to in subsection 4 of article 4 in Legislative Decree 674 are made in El Peruano, the official gazette, and referred to as indicating the electronic address and linked to access the draft of the contract to be signed. The contract draft publication should be made no less than fifteen working days before it is signed. The definitive contract is published in the same way, within five working days following subscription date Any opinion issued by regulatory agencies regarding promotion processes regulated by the Law Decree herein and Legislative Decree 674, under their competence are published by Proinversión in no less than fifteen working days before the date the contract s final version is approved in its electronic portal. Likewise, within said term, an ad will be published in El Peruano, the official gazette, pointing out the electronic mail address and the link where said provisions and opinions can be found for public information. Article 40. Private Investment Promotion Fund 40.1 Proinversión is in charge of, manages and directs the Public Investment Promotion Fund FONCEPRI. Said fund s resources are aimed at financing activities connected to promotion processes of projects regulated in the Legislative Decree herein The following are FONCEPRI resources: a. An amount that is established in each case by agreement of Proinversión s Steering Council based on project type, except for the case mentioned in subsection b). The General mechanism for calculating said amount is determined by Supreme Decree endorsed by the Ministry of Economy and Finance. b. An amount of 2% of the proceedings from the sale of public entity assets for Projects on Assets under its mandate. c. Internal and external loans or donations obtained for complying with the Legislative Decree herein. d. Any financial income generated by managing its own resources. e. Others allocated to it. TITLE VII NATIONAL PUBLIC PRIVATE PARTNERSHIP CONTRACT REGISTRY Article 41. Registration 41.1 The Ministry of Economy and Finance manages the National Public Private Partnership Contract Registry which includes Supreme Resolution, Regional Council Agreement or Municipal Council Agreement that provide for incorporating the project to the promotion process, as well as for signing Public Private Partnership contracts and their addenda, among others. Public entities comprised in article 2 and the Investment Committee are obliged to issue the information pointed out in the preceding paragraph. The registration application is automatically approved and subjected to further control Private Investment Promotion Agencies in Ministries, Regional Governments and Local Governments have to request their registration in the Registry within ten working days after the Regulation has been published, under responsibility of the Entity s Head. FINAL COMPLEMENTARY PROVISIONS FIRST. Regarding application of the National Public Investment System, companies in the non-financial public sector under the scope of the National Fund for Financing the State s Corporate Activity FONAFE are under the charge of FONAFE, which is the institutional and functional entity responsible for investment projects in said corporations, within the framework of current legislation. Evaluation, approval and prioritization of public investment projects of corporations referred to in the preceding paragraph are ruled by economy, efficiency and effectiveness principles within the framework of the National Public Investment System and applicable provisions. In the case of projects regulated in the Legislative Decree herein, the respective Ministry will exercise the functions set forth in article 7 notwithstanding the competences stipulated in Legislative Decree 674. SECOND: Information related to economic financial assessments that lead to determine competition variables used in designing and structuring private investment promotion processes which is part of the National Public Private Partnership Contract Registry is subjected to exception vis-a-vis the right to access information, because it qualifies as confidential information, according to stipulations in subsection 1 article 17 of the Single Conformed Text of Law 27806, Law of Transparency and Access to Public Information, approved by Supreme Decree PCM. THIRD: Commitments net of revenues and expenditures directly and indirectly derived from Public Private Partnership contracts are financed by the involved entities institutional budget, as appropriate, without requesting additional resources from the Public Treasury. Public entities subjected to total budgetary allocation limits and in agreement with expenditure limits set forth in the multi-annual macro-economic framework, shall include any necessary budgetary credits in their institutional budget to finance commitments derived from contracts either signed or to be awarded under the Public Private Partnership modality, under responsibility of the Entity s Head, as provided in the Single Ordered Text of Law 28411, General Law on the National Budget System, approved by Supreme Decree EF. FOURTH: The public entities pointed out in article 2 prioritize projects to be developed through Public Private Partnerships in any valuations and procedures regarding compliance with requirements towards obtaining licenses, permits and authorizations required for starting and continuing works. The applicant of each authorization, license and permit shall expressly point out that the project refers to a Public Private Partnership.

8 LEGAL REGULATIONS Friday 25 September, 2015 / El Peruano FIFTH: ESSALUD the Health Social Security can promote, process and sign Public Private Partnership contracts within the economy framework conferred to it by law, aiming at incorporating private investment and management in the services it supplies to insured parties, which are subjected to requirements and procedures established in the Legislative Decree herein. SIXTH: Public entities in charge of approving, conducting, executing, supervising and controlling private investment promotion processes have legally established powers to act discretionally. Said power is exercised to make any duly substantiated administrative decisions they deem most convenient according to law and taking into account the criteria included in the fourth final complementary provision of Law 29622, Law amending Law 27785, Organic Law of the National Control System and the General Comptroller s Office and expanding powers to sanction on issues of functional administrative responsibility. SEVENTH: All the State s public administration entities, in all its government levels, under responsibility, are obliged to not undertake actions or issue provisions which are bureaucratic barriers to obtain permits, licenses, or authorizations necessary for executing projects, in order to ensure compliance with Peruvian State obligations contained in Public Private Partnership contracts. Pursuant to Law 28996, Law on Elimination of Overcharges, Obstacles and Restrictions to Private Investment, and applying article 26 BIS in Law Decree 25868, Law on Organization and Functions of the National Institute for Defense of Competition and Protection of Intellectual Property INDECOPI, in agreement with Legislative Decree 1033, which approves the law on organization and functions of the National Institute for Defense of Competition and Protection of Intellectual Property INDECOPI, INDECOPI s Commission for Elimination of Bureaucratic Barriers is competent to guarantee compliance with the provision herein. EIGHTH: Proinversión is the entity in charge of the debt balance accounting records, as well as of accounts receivable and debt management generated within the framework of private investment promotion processes under the charge of the National Government referred to in the Legislative Decree herein and Legislative Decree 674. This accounting record is kept by Proinversión separately and independently from its own accounting. In connection to the preceding subsection, public and private entities officials are obliged to issue, under responsibility, any information required by Proinversión within the terms stipulated in the Regulation. Accounting records that correspond to private investment promotion processes for developing Public Private Partnerships under the charge of the Ministry, Regional Government and Local Government are in charge of said entities, except if they have been charged to Proinversión, in which case the accounting record is under the charge of this entity. Notwithstanding the aforementioned, the Ministry, Regional Government and Local Government will inform Proinversión about the accounting records of Private Investment Promotion processes for developing Public Private Partnerships in the terms set forth in the second paragraph of the provision herein. In any of the mentioned cases, involved entities will apply accounting procedure standards issued by the National Public Accounting Directorate of the Ministry of Economy and Finance, the agency that rules the National Accounting System. NINETH: Unjustified non-compliance with issuance of information to the Registries as established in the Legislative Decree herein gives way to a sanctioning procedure against the official responsible for said fault, notwithstanding the labor regime to which the official may belong. TENTH: The application of the value for money principle stipulated in article 11 of the Legislative Decree herein is assessed according to eligibility criteria defined in the regulation. This provision is applicable even to processes underway. ELEVENTH: The legal provision herein comes into effect on the following day the Regulation is published. TWELFTH: The Regulation of the Legislative Decree herein is approved by Supreme Decree endorsed by the Ministry of Economy and Finance within a term of no more than 60 calendar days following publication of the legal instrument herein. THIRTEENTH: As from the date the Legislative Decree herein comes into effect any regulatory reference concerning the laws and regulations pointed out in the Single Repealing Complementary Provision is understood as referred to the Legislative Decree herein and its Regulation, as appropriate. FOURTEENTH: The Ministry of Economy and Finance formulates the national private investment promotion policy on Public Private Partnerships and Projects on Assets, which will be approved by Supreme Decree in a term no longer than 90 calendar days following publication of the Regulation herein. FIFTEENTH: The Ministry of Economy and Finance, within the framework of the National Public Investment System, will evaluate and issue, as appropriate, the methodological tools to optimize public investment projects contained in co-financed Public Private Partnerships. TEMPORARY COMPLEMENTARY PROVISIONS FIRST: Private initiatives which -on the date the Legislative Decree herein comes into effect- have been admitted to processing and until the contract is signed, will be subjected to the procedure in effect before the Legislative Decree herein comes into effect. SECOND: Government initiatives which -on the date the Legislative Decree herein comes into effect- have been incorporated to the promotion process and until their award, will continue subjected to the procedure in effect until the Legislative Decree herein comes into effect. THIRD: The Supervision Agency of Investment in Public Transportation Infrastructure (OSITRAN) is authorized as from the date in which Law comes into effect and during Fiscal Year 2016 to enter into agreements that trust international organizations with the selection procedure for contracting supervision services and those services necessary to perform such supervision connected to public transportation infrastructure exploitation activities under the competence of OSITRAN within the framework or their supervisory function. International organizations with which agreements are signed will comply with the following conditions: (i) Having published manuals or other documents in their electronic portal on their selection procedures, which should agree with the principles that rule contracting, as well as with international treaties or commitments, including provisions on public contracting signed by Peru; (ii) Challenges should be resolved by impartial instances different from those that undertook the selection procedure; (iii) Having internal and external audits applied to the agency in charge of the selection procedure, and; (iv) Implementing capacity strengthening mechanisms as part of the objectives in their contracts for public officials of the Entity that signs the agreements. Likewise, agreements are exclusively aimed to contracting according to the objectives included in the founding agreements or decisions of international organizations. Agreements will be signed by the entity s Head, and the following reports are required before they are entered into: a legal report, a favorable report by the Budget Office demonstrating availability of resources for its financing, and a technical report that depicts the advantages and benefits in the agreement. The entities within the scope of the provision herein shall register the call for tenders, the selection result, and the contracts and the awarded amounts have to be registered in the State Contracting Electronic System (SEACE). Likewise, under responsibility of its Head, they shall provide information to the General Comptroller s Office, the Ministry of Economy and Finance and the State Contracting Supervision Agency (OSCE), if they so request.