In a forthcoming book Partenariat public-privé : esprit de cooperation (Larcier, based on the PhD I defended at the University of Lausanne in 2025), I argue that public private partnerships (PPP) often produce negative results from a legal perspective.

As the PPP phenomenon was introduced in the Anglo-Saxon world in the late 1970s and early 1980s before spreading to the European continent, a comparative law approach seemed relevant to determine whether there are universal instruments that different legal systems can provide to improve the functioning of PPP projects. The choice of specific legal systems was determined by the countries where PPPs were/are widely used, knowledge of the legal systems and their diversity. The English, French, Australian, Canadian, Belgian and Dutch legal systems were therefore analysed.

Definition of PPPs

The starting point is to define the term ‘public-private partnership’ based on economic theories, underlying the use of PPPs. The economic assumption is that a private partner is more efficient, has adequate financial resources and the necessary know-how and experience to DO WHAT?. Public authorities call on the private partner to leverage these resources to their own benefit. This is done through a contract, as this legal instrument guarantees a certain degree of stability and flexibility. Public authorities require the private partner to provide a package of services, with the short-term risk of the project falling on the private partners. This results in a transfer of risk, or at least a sharing of risk between the public and private partners. The transfer of risks is one of the characteristic features of a PPP. Risk can be defined as any factor, event or influence that threatens the successful completion of a project in terms of time, cost or quality. In the context of PPPs, it must be assumed that not all risks can be borne by either the public or private partner alone. Risks and related rights must be allocated in such a way as to maximise the total value of the project, taking into account each party’s ability to influence, anticipate and absorb risks and transaction costs. In order to give the private partners the opportunity to recoup their investment, the agreement must be concluded for a long period.

The book proposes the following working legal definition: A public-private partnership is a long-term contract for valuable consideration concluded between a public authority/public partner and one or several economic operators/private partners, which establishes a cooperative relationship between the two, whereby the private partner carries out a project of general interest for the public partner, with a sharing of risks between the public and the private partners.

Success factors

Once a PPP is set up, the question arose as to which elements, if any, were important for such PPP projects to succeed. Administrative and public management sciences, especially New Public Management and New Public Governance, provide some answers to this question.  New Public Management emphasises strongly the implementation of economic principles and models in the management of the public interest. With regard to PPPs, this translates into  contractualising the economic principles on which PPPs were based. Public authorities seek to obtain efficiency gains from a private partner. To this end, contracts are as detailed as possible, with the rights and obligations of the contracting parties clearly identified and a comprehensive system of penalties to ensure that the parties fulfilled their obligations. These elements are necessary but not sufficient. New Public Governance highlights that PPPs are also a governance structure, where the relational aspects between the two partners also come into play. These relational aspects are crucial for the success of a PPP.

Evolution

The emergence and use of PPP in continental Europe and the Anglo-Saxon world is part of more general developments in our society. More specifically, PPPs are a phenomenon that demonstrates that the role of the state is evolving in our society, that the way in which the state intervenes in society is changing, and that the law that applies to this intervention, to the conclusion and execution of PPPs as government contracts or administrative contracts, should also adapt. Firstly, the State calls on the private sector to carry out complex projects and manage tasks in the public interest. The growing use of contracts is a consequence of this. Furthermore, PPPs are a prime example of economic influences on the actions of the State. As an economic model and financial instrument, they encourage the State to be more efficient and effective.

In the Anglo-Saxon world, at the level of contract performance, the idea of performance in good faith and the obligation of cooperation between contracting parties has emerged. In Canada, the Supreme Court accepts this idea as an organising principle applicable to all contracts. In England, it is an implied term applicable to relational contracts such as PPPs. In addition, the application of certain models such as NEC4 reveals relational aspects in the performance of PPP contracts. In a society where the State must increasingly consult with citizens, it would be strange if the concepts of loyalty and good faith were not also established in the context of the performance of an administrative contract. Belgian and Dutch law demonstrates that such an application to administrative contracts is not unrealistic.

Key principles – proposals

If PPPs are to be successful relational framework, the question arises if some legal principles may be relevant. Drawing on French and English law, the book analyses, in chronological order, the contractual formation and performance. The main argument here is that legal solutions to a real problem can often be based on general legal principles. Hyper-detailed legal rules only lead to greater complexity and not necessarily to greater legal certainty. What matters most is the willingness of the parties to cooperate, to resolve problems together, to serve the interests of the project above all else and not to put their own interests first. The book makes legal proposals in this regard.

With regard to the award or conclusion of PPPs, all the legal systems under examination agree that competition is needed to some degree. This is logical, given that international and European treaties consider free market access and free competition to be important objectives in the conclusion of public contracts and therefore also in the context of PPPs. Furthermore, free competition is an opportunity to create a certain level of trust, even if it ultimately leads to a certain choice. The need to make a choice could be an obstacle to finding a partner who cooperates or fits in with the objectives of general interest. Trust should mainly stem from the fact that free competition should ensure that no company is favoured and that every company has an equal chance to apply.

A selection phase is common to all the legal systems studied. However, even within this selection phase, the book proposes incorporating at least one criterion that can give the public partner insight into a private partner who is willing to build a relationship of trust and has already proven in the past that they are willing to engage in cooperation and perform the PPP contract in good faith. Such ethical criterion based on past performance, should be aligned with the main objectives of a PPP, namely cooperation between the public and private partners to achieve the common objective(s) in the best possible way. On the private side, this can be demonstrated by ISO standards, which show a company’s commitment to cooperation and its adherence to sustainability objectives, which also include cooperation and the promotion of the public interest.

In addition to allowing competition between companies during the procurement procedure, it is also important to have intensive contacts between the public partner and potential private partners during this procedure. For a PPP, it seems preferable that these intensive contacts take place as early as possible in the procurement process. In addition, these contacts should involve as many of the people responsible for the implementation of the PPP as possible. The designer, the ‘builder’, the financier and the legal expert should preferably be involved in he negotiations as early as possible so that the public partner, in collaboration with any private partners, can develop an ‘optimal’ solution as early as possible without having to discuss the contractual content in detail. The competitive dialogue as a procedure regulated by article 30 of Directive 2014/24/EU and article 48 of Directive 2014/25/EU, emphasises the search for a partner, who has the financial and technical capacities to execute the contract, in addition to the search for a qualitative solution. The dialogue then serves to build a relationship based on trust, with the partners seeking common goals in good faith and demonstrating a willingness to place the interests of the project at the heart of the implementation of the contract as far as possible. The dialogue is governed by two principles. On the one hand, the public partner must ensure equal treatment and transparency. On the other hand, a public authority cannot simply disclose information from one company to another. Trade secrets must be protected as much as possible, otherwise the private partner may become distrustful.

With regard to the performance of the contract, all legal systems under examination recognize some form of duty of cooperation between the parties. However, in some legal systems, this obligation is interpreted more strictly than in others. Ideally, such a duty should lead the parties to put the interests of the project first and, in the event of problems, unexpected circumstances or conflicts, these interests should form the basis for conflict resolution (focused on the project).

Two solutions have been proposed. First, the contracting parties need to include contractual terms encouraging the parties to cooperate loyally and in good faith and, second, they need to put the interests of the project first. Each of the legal systems allows this, and practice shows that such terms are also becoming increasingly common. This is the result, among other things, of the application of NEC4-type models in the Anglo-Saxon world for PPPs, but also gradually in Belgium and the Netherlands. In doing so, the parties may also possibly include broader terms with a broader interpretation of the concept of ‘unforeseen circumstances’. This supports also the argument that the European directives on procurement need to be reformed so that broader possibilities for imprevision should be available when a PPP project subscribes to climate objectives, the promotion of energy security, the integration of sustainability, or the protection of national security or health.

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Posted by Kris Wauters

Kris Wauters is a member of the Brussels Bar since 1993, specialising in constitutional and administrative law. Since 2012, he Is a member of the Janson law firm. Since 2010, he is a professor at the UC Louvain (BE), where he teaches government contract law, public economic law and energy law.