GERMANY – B. Müller

What is PPP?

Planning

+ Building

+ Financing

+ Operation

(+ Post-contract life)

= PPP

PPP-Sectors: PPP – construction, PPP – infrastructure

Movement of selected public sectors

towards private structuresPublic administration PPP Private sector

•Rail •Post

•Waterways •Telecommunications

•Road •Energy supply

•Defence

•Water supply •Water supply •Water supply

•Health care •Health care •Health care

•Social services •Social services •Social services

•Waste disposal •Waste disposal •Waste disposal

•Sewage disposal •Sewage disposal •Sewage disposal

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Types of PPP contracts- in German law -

Differences and core content

Acquisition model Hire-purchase of facility/asset

Owner model Planning, construction, financing, operation under ownership

of the principal

Leasing model Rent with option to buy

Rent model Contract for rent extending beyond 10 years

Contracting model Contract to operate the facility/asset

Licence model Operation of facility/asset with user fees collected privately

Company model Operation by way of project group

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PPP project structure- example -

Advisor AdvisorLicenser

Fed / Land / Municipality

Loan providerLicensee

Project company

General contractor

Construction planning

Banks/capital market

Shareholder

Investors

Maintenance

Maintenance

Public sector or private sector use

Operator

Operation

Ren

t or

fee

Pro

visi

on o

f se

rvic

e

Con

cess

ion

Gra

nt

Interest/re-payment

Maintenance

Return

Equity capital Loan

Remuneration Remuneration

Operation

Ser

vice

Con

stru

ctio

n

Con

stru

ctio

n at

agr

eed

pric

e an

d tim

efra

me

Rem

uner

atio

n

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History of PPP at EU level

07 May 2003 Commission publishes “Internal market strategy – priorities 2003 – 2006”, which highlights the need to clarify legal issues relating to PPP. The publication of a green paper on PPP is announced.

21 May 2003 Commission publishes Green Paper on services of general interest. This paper entails a substantial review of the Commission's service policy and asks whether a general legal framework should be created at Community level for services of general interest. The Commission plans top publish a green paper on public procurements and on PPP in the second half of the year.

30 Apr 2004 Commission adopts Green Paper

30 Apr 2004 Forwarded to the Council

30 Apr 2004 Forwarded to the European Parliament (EP)

27 Oct 2004 Opinion by the European Economic and Social Committee

17 Nov 2004 Opinion by the Committee of the Regions

End 2005 Commission announces resolution on further PPP legislation for the end of 2006

26 Oct 2006 Resolution by EP

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History of PPP at federal level in Germany

Apr 2001 Federal Chancellor sets up “Kanzler-AG”

Jun 2002 Federal Chancellor announces PPP competence centre

Jul 2002 Steering committee (SC): “PPP in public construction works”

Feb 2003 PPP federal study commissioned

Jul 2003 Bundestag adopts motion for PPP resolution

Dec 2003 Agreement by federal states ministers responsible for building

Dec 2003 SC: Recommendations for framework conditions

Nov 2004 Members’ initiative “PPPs Acceleration Act”

Dec 2004 Agreement by federal state ministers responsible for finance (FMK)

Jul 2004 PPP Task Force set up

May 2005 Creation of federal PPP competence network

Sep 2005 PPPs Acceleration Act comes into force

Sep 2006 FMK decision: Standard guidelines on examining profitability

Source: PPP Task Force, Federal Ministry for Transport, Building and Urban Affairs

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Market structure of PPP in Germany

More PPP

Framework More/bigger projects

Laws RegulationsAdmin. building

Defence

Education Research

TransportModels

Provision amendments:

Competition law

Tax law

Accounting law

Statistics law

Change in rules on awarding contracts

modify:

ContractsPC

PSCBudget issuesSystem of NADouble entry bookkeeping

More private capital for public tasks

More co.’s in the provision of public services

Health

PB = Profitability calculations

PSC = Public Sector Comparator

NA = National accounting

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PPP organisation of the govt in Germany

Ministry of Finance

Construction Transport Civil Defence

Project working

group PPP

Roads Rail,

Sea,

Air Federal states East West

Task Force

VIFGDeges

Ministry of DefenceMinistry of Transport Ministry of Economics

Project development co.

= Project management co.’s

Deutsche EinheitFernstraßenplanungs- und -bau GmbH

Verkehrsinfrastruktur-entwicklungsgesellschaft mbH

g.e.b.b., Dept. M / Group M I

Gesellschaft für Entwicklung, Beschaffung und Betrieb mbH

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The PPP procurement process in GermanyAgreed procedure between central and regional government

Phase I Determining needs, financeability and profitability of measures

Final profitability analysis

Provisional examination of profitability

Determining the maximum amount to be appropriated in the budget (budget readiness)

Drawing up conventional comparative values (Public Sector Comparator – PSC)

PPP test for suitability

Steps in examining PPP profitability

Phase II

Appropriation in budget and call for tender

Preliminary decision for or against continuing to pursue varies PPP options

Final decision on awarding and signing of contract

Project controlling

Phase III

Phase IV

The phases in the PPP procurement process

Preliminary decision for or against publishing call for tender

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An example for possible risk allocation – traditional procurement vs. PPP

Traditional procurement PPP

Publ

ic s

ecto

r

P

riva

te

part

ner

deficient constructionunavailabilitybad service

insufficient usageobsolescenceresidual value below forecast

deterioration of commercial basis (framework)

force majeurechanging legislation

deficient constructionunavailabilitybad service

insufficient usageobsolescenceresidual value below forecast

deterioration of commercial basis (framework)

force majeurechanging legislation

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ABC modules of tender I

Module A: Construction

Mostly invitation to tender as a general contractor subject to the provisionsof the guidelines on awarding contracts; to be built, for example, on a piece of land owned by the party issuing the invitation to tender

Module B: Financing part A

B1: conventional lease financing via the budget

B2: pure finance leasing (no equity capital of private investors, thus no tax effects), sometimes with forfeiting.

B3: tax-optimised fund leasing models with equity capital of private investors.

Module C: Investor model

Same-source construction and financing on the basis of the conditions of modules A and B with a fixed-price model without disclosing the details of

the calculation.

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ABC modules of tender II

In addition to parts A, B und C, additional tenders can be invited in suitable cases:

Module D: Similar to Module C, but using functional description of construction and with the bidder’s own planning, possibly also on a piece of land owned by the party inviting tender.

Module E: Offers to buy, hire-purchase of simply rent suitable objects which have already been built or which are in the process of being built.

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Overview of the current status of the PPP Simplification ActProject working group consisting of the majority parties in the German Bundestag and including representatives of German industry

As of May 2007

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X 4

1 X

Social infrastructureNo need

recognised

X

Awarding of contract 2

Transport X 3

DefenceNo need

recognised

Note: The original timeframe for the legislation, which provided for a first reading of the PPP Simplification Act in the Bundestag in May 2007, no longer applies. No new timeframe has yet been submitted

(1) The members of the CWGs consistently regarded the proposals by the advisors was not viable. Key issues where appropriate once proposals of the

"Hesse study" has been looked at by the Ministry of Health and the Länder working group "Hospital finances"

(2) Federal Ministry of Finance and Federal Ministry of Transport, Building and Urban Affairs are requested to submit proposals

(3) Advisor proposals concentrate on further development of the Transport Infrastructure Financine Company (VIFG) and on its becoming authorised to borrow

(4) Advisors see no specific need for action. Proposed amendments to the Federal Budget Ordinance were sent to the CWG "Law on government support"/"Budget"

Need for legislation is covered by the amendments to the Investment Act and the Law on Public Procurements

Budget

Health

Taxes

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Overview of standardisation work of central and regional governments in Germany

Field of competence Draft Agreement Publishing

1Guidelines on examining profitability of PPP projects O

2 Guidelines on awarding public contracts O

3 “PPP and government support legislation”

study

O

4PPP and budget appropriation

O

5 Guidelines on PPP and SME’s* O

6 PPP School study O

7 A-model awarding of contracts O

* SME = Small and Medium sized Enterprises

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Sektor Projekt / Ort Auftraggeber BundeslandVertrags-

modellZuschlag

erteilt

1 Sport/Kultur Thermalbad in Wiesbaden Landes - Hauptstadt Wiesbaden Hessen Bau- und Unterhaltungsvertrag Jan 02

2 Bildung Bildungszentrum Ostend in Frankfurt/Main Stadt Frankfurt am Main Hessen PPP-Mietmodell mit Erwerb nach 20 Jahren Jul 03

3 Bildung Schulen in Monheim Stadt Monheim Nordrhein-Westfalen PPP-Inhabermodell Jan 04

4 Bildung Sonderschule und Dreifachsporthalle in Frechen Rhein-Erft-Kreis Nordrhein-Westfalen PPP-Inhabermodell Feb 04

5 Bildung Schulen und Sporthallen im Kreis Offenbach (Los West) Kreis Offenbach Hessen Gesellschaftsmodell Mrz 04

6 Sonstige Parkhaus am Bundesverwaltungs-gericht in Leipzig Stadt Leipzig Sachsen Erbbaurechtsvertrag mit Bauverpflichtung (Konz.) Apr 04

7 Bildung Sonderschule, Gütersloh Kreis Gütersloh Nordrhein-Westfalen PPP-Inhabermodell Erbbaurecht Jun 04

8 Sport/Kultur Sporthallen in Münster Stadt Münster Nordrhein-Westfalen PPP-Inhabermodell Jun 04

9 Sport/Kultur Freizeitbad in Lüdinghausen Stadt Lüdinghausen Nordrhein-Westfalen Erbbaurechtsvertrag mit Bauverpflichtung Jun 04

10 Sport/Kultur Lipperlandhalle Kreis Lippe Nordrhein-Westfalen PPP-Inhabermodell Jun 04

11 Bildung Schulen in Witten Stadt Witten Nordrhein-Westfalen PPP-Inhabermodell Aug 04

12 Verwaltung Kreishaus in Unna Kreis Unna Nordrhein-Westfalen PPP-Inhabermodell Sep 04

13 Verwaltung Rathaus in Gladbeck Stadt Gladbeck Nordrhein-Westfalen Inhabermodell (Nutzungsüberlassungsvertrag) Sep 04

14 Bildung Schulen im Kreis Offenbach (Los Ost) Kreis Offenbach Hessen Gesellschaftsmodell Nov 04

15 Sonstige Parkhaus unter dem Bowling Green in Wiesbaden Stadt Wiesbaden Hessen Bau- und Betriebs-konzession Jan 05

16 Bildung Schulen in Bedburg Stadt Bedburg Nordrhein-Westfalen PPP-Inhabermodell Mrz 05

17 Bildung Schulen in Köln Stadt Köln Nordrhein-Westfalen PPP-Inhabermodell Apr 05

18 Sport/Kultur Freizeitbad in Leimen Stadt Leimen Baden-Württemberg Erbbaurechtsvertrag mit Bauverpflichtung Apr 05

19 Sonstige Logistikzentrum mit Parkhaus am Klinikum Dortmund Ernesto Grund-stücksverwal-tungsgesell-schaft mbH Nordrhein-Westfalen Inhabermodell Mai 05

20 Bildung Berufsschulzentrum in Leverkusen Stadt Leverkusen Nordrhein-Westfalen PPP-Inhabermodell Jun 05

21 Sport/Kultur Thermalbad in Fürth Stadt Fürth Bayern Betreibermodell Jun 05

22 Bildung Schulen in Achim Stadt Achim Niedersachsen PPP-Inhabermodell Aug 05

23 Verwaltung Landratsamt Bodenseekreis in Friedrichshafen Bodenseekreis Baden-Württemberg PPP-Inhabermodell Aug 05

24 Sport/Kultur Misburger Bad in Hannover Stadt Hannover Niedersachsen Erbbaurechtsvertrag mit Bauverpflichtung Sep 05

25 Sonstige Hubschraubertrainingssimulatoren, Bückeburg, Holzdorf u. Fassberg Bundesamt für Wehrtechnik und Beschaffung Niedersachsen Konzessionsmodell Nov 05

26 Sport/Kultur Hallen- und Freibad in Senden Gemeinde Senden Nordrhein-Westfalen Betreibermodell Nov 05

27 Bildung KITA, Münster-Roxel Stadt Münster Nordrhein-Westfalen PPP-Inhabermodell Dez 05

28 Sport/Kultur Bäderzentrum in Cottbus Stadt Cottbus Brandenburg Betreibermodell Dez 05

29 Bildung Sekundarschule in Barleben Gemeinde Barleben Sachsen-Anhalt PPP-Inhabermodell Feb 06

30 Sonstige Parkhaus an der Universitätsklinik Düsseldorf Uni-Klinik Düsseldorf, Bau- und Liegenschaftsbetrieb NRW Nordrhein-Westfalen PPP-Konzessionsmodell (Erwerbermodell) Apr 06

31 Bildung Gymnasium in Schwarzenbek Stadt Schwarzenbek Schleswig-Holstein PPP-Inhabermodell Mai 06

32 Bildung Kita und Familienzentrum, Langenhagen Stadt Langenhagen Niedersachsen PPP-Inhabermodell Mai 06

33 JVA JVA, Stadelheim Land Bayern Bayern Priv. Vorfinanzierung mit Energie-Contracting Mai 06

34 Gesundheit Westdeutsches Protonentherapiezentrum, Essen Uni-Klinik Essen, Westdeutsche Prot.therapiezentrum Essen gGmbH Nordrhein-Westfalen Mietmodell mit Erwerbsoption Jun 06

35 Verwaltung Ortsgericht, Pforzheim Stadt Pforzheim Baden-Württemberg PPP-Erwerbermodell Jun 06

Table of PPP Projects I

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Table of PPP Projects II

Sektor Projekt / Ort Auftraggeber BundeslandVertrags-

modellZuschlag

erteilt

36 Bildung Gymnasium in Twistringen Stadt Twistringen Niedersachsen PPP-Inhabermodell Jul 06

37 Bildung Schulen in Köln (Mittelstandspaket) Stadt Köln Nordrhein-Westfalen PPP-Inhabermodell Aug 06

38 Sport/Kultur Multifunktionssporthalle in Bestensee Gemeinde Bestensee Brandenburg PPP-Inhabermodell Aug 06

39 Verwaltung Altstädtisches Rathaus in Brandenburg a.d.Havel Stadt Brandenburg Brandenburg PPP-Inhabermodell Aug 06

40 Sport/Kultur Keitum-Therme, Sylt Ost Gemeinde Sylt-Ost Schleswig-Holstein Gesellschaftsmodell Sep 06

41 Verwaltung Justizzentrum, Chemnitz Freistaat Sachsen (SIB) Sachsen PPP-Inhabermodell Sep 06

42 Sport/Kultur Sportstätten, Bad Oldesloe Bad Oldesloe Schleswig-Holstein PPP-Inhabermodell Sep 06

43 JVA JVA, Offenburg Land Baden-Württemberg Baden-Württemberg PPP-Inhabermodell Okt 06

44 Bildung Schule, Neuss Schulgebäude am Stadtwald GmbH i.Gr., Stadt Neuss Gesellschafter Nordrhein-Westfalen PPP-Inhabermodell Nov 06

45 Bildung Berufsbildende Schulen, Buchholz i.d.N Landkreis Harburg Niedersachsen PPP-Inhabermodell mit Eigentumsübergang Nov 06

46 Verwaltung Finanzzentrum Altmarkt, Kassel Land Hessen Hessen PPP-Vermietungs-modell Nov 06

47 Bildung Schulen, Halle Stadt Halle Sachsen-Anhalt PPP-Inhabermodell Dez 06

48 Bildung Kitas, Halle Stadt Halle Sachsen-Anhalt PPP-Inhabermodell Dez 06

49 JVA JVA, Burg Land Sachsen-Anhalt Sachsen-Anhalt PPP-Inhabermodell Dez 06

50 Verwaltung Heinrich-Böll-Stiftung, Berlin (Investition aus Mitteln der BRD) Heinrich-Böll-Stiftung Berlin PPP-Inhabermodell Dez 06

51 Bildung Schulen, Lahn-Dill-Kreis / Wetzlar Kreis Lahn-Dill Hessen PPP-Inhabermodell Jan 07

52 Verwaltung Rathaus, Freudenberg Stadt Freudenberg Nordrhein-Westfalen PPP-Inhabermodell Feb 07

53 Bildung Schulen, Düren Stadt Düren Nordrhein-Westfalen PPP-Inhabermodell Mrz 07

54 Sport/Kultur Elbphilharmonie, Hafencity Hamburg Stadt Hamburg / ReGe Hamburg Projekt-Realisierungsges.schaft mbH Hamburg PPP-Inhabermodell Mrz 07

55 Sport/Kultur Sport- und Veranstaltungszentrum, Schwerin Stadt SchwerinMecklemburg-Vorpommern

Betreibermodell Mrz 07

56 Verwaltung Justiz- und Verwaltungszentrum, Wiesbaden Stadt Wiesbaden, Land Hessen Hessen PPP-Vermietungsmodell Mrz 07

57 Bildung Berufsbildende Schulen, Winsen Landkreis Harburg Niedersachsen PPP-Inhabermodell mit Eigentumsübergang Mrz 07

58 Bildung Gymnasium, Kirchseeon Landkreis Ebersberg Bayern PPP-Inhabermodell Mai 07

59 Bildung Grundschule und Kita, Hamburg Stadt Hamburg Hamburg PPP-Inhabermodell Mai 07

60 Sport/Kultur Rudolf-Harbig-Stadion, Dresden Stadt Dresden Sachsen Konzessionsmodell Jun 07

61 Sport/Kultur Sportpark, Niederkassel Stadt Niederkassel Nordrhein-Westfalen PPP-Inhabermodell Jun 07

62 Verwaltung Behördenzentrum , Heidelberg Land Baden-Württemberg Baden-Württemberg PPP-Vermietungs-modell Jun 07

63 Sport/Kultur Medienhaus, Mühlheim an der Ruhr Stadt Mühlheim an der Ruhr Nordrhein-Westfalen PPP-Inhabermodell Jul 07

64 Bildung Gymnasium, Lübz, Landkreis Parchim Landkreis ParchimMecklemburg-Vorpommern

PPP-Inhabermodell Jul 07

65 Sport/Kultur Multifunktionshalle und Sportinternat Ludwigsburg Stadt Ludwigsburg Baden-Württemberg Aug 07

66 Bildung Schulen, Frankfurt Stadt Frankfurt am Main Hessen PPP-Inhabermodell Aug 07

67 Sport/Kultur Thermalbad, Thale Stadt Thale Sachsen-Anhalt PPP-Konzessionsmodell Aug 07

68 Sport/Kultur Sporthalle, Halstenbek Gemeinde Halstenbek Schleswig-Holstein PPP-Inhabermodell Sep 07

69 Sport/Kultur Schwimmhalle Burgstädt Stadt Burgstädt Sachsen Sep 07

70 Bildung Gesamtschule Rodenkirchen, Köln Stadt Köln Nordrhein-Westfalen PPP-Inhabermodell Okt 07

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Table of PPP Projects III

Sektor Projekt / Ort Auftraggeber BundeslandVertrags-

modellZuschlag

erteilt

71 Sport/Kultur Sporthalle Ahrensburg Stadt Ahrensburg Schleswig-Holstein PPP-Inhabermodell Okt 07

72 Bildung Wald- und Hauptschule Lohmar Stadt Lohmar Nordrhein-Westfalen PPP-Inhabermodell Okt 07

73 Verwaltung Amt für Bodenmanagement Limburg Land Hessen Hessen PPP-Vermietungsmodell Okt 07

74 Verwaltung Amt für Bodenmanagement Korbach Land Hessen Hessen PPP-Vermietungsmodell Okt 07

75 Bildung Schulen, Stadt Cottbus Stadt Cottbus Brandenburg PPP-Inhabermodell Nov 07

76 Bildung Schulen, Magdeburg Stadt Magdeburg Sachsen-Anhalt PPP-Inhabermodell Nov 07

77 Sport/Kultur Sportanlagen, Bochum Stadt Bochum Nordrhein-Westfalen PPP-Inhabermodell Dez 07

78 Verwaltung Amt für Bodenmanagement Büdingen Land Hessen Hessen PPP-Vermietungsmodell Dez 07

79 Sport/Kultur Oktopus-Bad, Siegburg Stadt Siegburg Nordrhein-Westfalen Dez 07

80 Verwaltung Polizeigebäude in Buchen Land Baden-Württemberg Baden-Württemberg Dez 07

81 Bildung Schulen, Bergneustadt Stadt Bergenustadt Nordrhein-Westfalen PPP-Inhabermodell Jan 08

82 Sport/Kultur Sport- und Wellnessbad in Bedburg Stadt Bedburg Nordrhein-Westfalen Jan 08

Landesprojekte

Bundesprojekte

Focus of PPP investments in public construction works in

Germany  Projects

awarded Projects in the pipeline

Known Estimated

Amount amount amount for

in € million in € million projects

    in € million *

Schools / training centres 850 830 1.400

Administrative buildings 345 300 780

Prisons 200 50 200

Hospitals 135 170 1.030

Sports / cultural facilities 485 450 1.075

Car parks / logistics centres / miscellaneous 50 230 525

Federal buildings (barracks) 250 70 140

Total 2.315 2.100 5.150

Source: Die Deutsche Bauindustrie * projected

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Plans for the foundation of a company

called Partnerschaften Deutschland

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What Partnerschaften Deutschland represents

Partnerschaften Deutschland is conceived as a broadly positioned quality service provider offering comprehensive consulting services on PPP matters for the public sector – with a focus on the early stages.

What Partnerschaften Deutschland offers:

– Objectivity, independence and credibility

– Cost savings (optimisation of processes, standardisation, know-how)

– Speed (especially easy to engage its services)

But:

Public authorities can continue to procure consulting services on the open market

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Partnerschaften Deutschland’s areas of activity

Specific investment projectsProviding highly qualified, professional advice for the public sector when examining the use of PPP for investment projects as well as when scoping and implementing specific PPP projects

Framework conditionsAdvising the public sector in further developing standards and the institutional basis for PPP

Dual mission

Systematic knowledge transferPromoting knowledge transfer between all involved in PPPs, targeted build-up of PPP know-how within the public administration

Market development Highlighting areas of priority for PPP and supporting policymakers and the administration in creating a sustainable PPP pipeline

Projectadvisory service

Basic PPP advisory service on behalf of public sector

Areas of activity

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Shareholdings

Companies/executive bodies

Advisory bodies

50.1%

Private-sector shareholdersPublic-sector shareholders

49.9%

99%1%

Advisory board

Federation Länder Local authorities

General meeting

Supervisory Board

Management board

Partnerschaften Deutschland

Organisation and ownership structureof Partnerschaften Deutschland

Industry, banks, etc.

Holding company

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Avoiding the adviser/tenderer conflict and direct holdings through the interposition of the holding company and avoiding overlap between representatives of private shareholders and bodies or employees of Partnerschaften Deutschland

Delegation of staff from the private shareholders of the holding company are excluded from Partnerschaften Deutschland for project work

As the holding company is not dedicated to a specific purposes and is not dominated by one company (or industry) either, steps have been taken to ensure that the operative activities of Partnerschaften Deutschland cannot be influenced by the particular interests of its shareholders

Avoiding the adviser/tenderer problem and conflicts of interest

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AwardBidding competition

“Lots” to include different PPP industries

Selection ofapplicants qualified for PPP

Selection criteria PPP

experience / references

Ability

Procedure for selecting private shareholders

Acquisition of share inholding company /Partnerschaften Deutschland

Criteria for the award of holding Price for the

share Quality of the

concept for participation

Informal survey of market’sinterest

Examine markets‘ interest in participation

Formal award procedure

Assessment criteria Qualitative Financial

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