Yesterday entered into force the Regulation of the Public-Private Partnerships Law (the ?Regulation) published on November 05, 2012, in the Official Gazette of the Federation (?DOF?). This Regulation contains certain provisions that had not been completely covered by the Public-Private Partnership Law (the ?PPPL?). The present Newsletter intends to give a general overview of the contents and implications this Regulation brings to this new method of contracting with public entities. � General Provisions The Regulation specifies that in order for a project to be considered as a ?long term contractual relationship? (in terms of article 2 of the PPPL) it shall be, at least, three years long. In relation to the investment required for the project, they might be considered in one of the following ways: - Pure: in cases where the resources provided for the rendering of services, investment costs, operation and preservation of infrastructure come from federal budgetary resources.
- Combined: in cases where the funds provided are federal budgetary resources, from the National Fund for Infrastructure or any other federal non-budgetary, as well as from a different source of payment
- Self-financing: When the resources provided for its development and execution are private resources or generated by the same project.
The acts and proceedings required in relation with the Public-Private Partnerships (PPPs) may be completed through electronic means if the state department or federal entity has regulated such possibility. The documents, communications and notifications containing an Advanced Electronic Signature (FIEL) shall have the same evidentiary value as those submitted with autograph signature. On the website CompraNet will be included, in addition to the information regarding existent PPPs projects, the unsolicited proposals made and a Developers? Registry. Such registry will be created for publicity and transparency purposes; therefore, being registered on it will not be an essential requirement to be able to participate in this kind of projects. In projects where the initial investment amount is greater than 400 million of investment unit1(UDIS), the participation of a ?social witness? will be a compulsory requirement. The social witness will be designated by the Public Function Ministry, and will observe the process and identify any irregularity. The social witness will elaborate a written report describing how the process was performed. In case of early termination of the Contract for reasons not attributable to the developer, the same will have the right to receive reimburse for all indispensable expenses and investment made. It must be proven that such expenses and investments were directly related to the project and that they are not recoverable by other means. The Regulation also provides some specifications additional to the ones provided by the PPPL in regard to the technical contents that shall be observed at the time of performing the feasibility studies, unsolicited proposals, the economic offer, calculation of penalties, guarantees, etc.2 � Dispute Resolution The Public-Private Partnerships Law has caught the public attention due to the alternative methods that it provides to solve disputes that may arise from PPPs. Established in its Twelfth Chapter; these are Expert Committees, Conciliation and Arbitration. These mechanisms of dispute resolution are implanted in the PPPL to give greater security to private entities, allowing them to solve their controversies without appearing before local tribunals, which might be influenced by the public entities involved in such disputes. Some details in the wording of the corresponding LAPP?s article have raised debate over some of its implications. The PPPL Regulation helps to clarify some of these concerns In this line of argument, the Regulation provides that the proceeding to solve controversies of a technical or economic nature before an Expert Committee is not a previous requirement for the commencement of other dispute resolution mechanisms provided by the contract. � The Regulation also recognizes that disputes related to the rescission of PPPs Contracts might be settled through Arbitration, however, it does not gives the possibility to submit to Arbitration the reversal of concessions or authorizations, neither the so called ?acts of authority?. Finally, it redounds in the fact that against the arbitral award shall be no appeal, with the exception, only in certain specific cases, of the ?Amparo?. � Conclusion The Regulation of the Public-Private Partnerships Law complements the framework over which the PPPs projects will be carried out in our country and reflects the Public Administration?s intention to attract foreign investment by granting greater security to investors. Likewise, it is an instrument that demonstrates Mexico?s incorporation to the growing global tendency to promote efficient collaboration between public and private entities to achieve common objectives. | 
