The European Union (EU) covers public works concessions - a form of public-private partnerships (PPPs) - under the revised WTO Government Procurement Agreement (GPA), as well as under bilateral agreements. Under the GPA, the EU limits its coverage of works concessions to a national treatment regime, but does not indicate the extent of obligations under such a regime. However, bilateral agreements with two GPA partners, the Republic of Korea and Canada, that cover works concessions elaborate on the obligations that apply to such projects. EU-Korea FTA: In the EU-South Korea Free Trade Agreement (FTA), which entered into force in 2011, the EU and Korea exchanged PPP coverage: public works concessions for the EU and build-operate-transfer (BOT) contracts for Korea. The FTA excludes the PPP projects from the obligations of its Government Procurement Chapter and instead sets out the requirements for the projects in a separate BOT Contracts and Public Works Concessions Annex, which applies to projects above a threshold of 15 million Special Drawing Rights (SDRs). Both parties bring their GPA coverage of central government and sub-central government entities under the Annex. Neither extends its coverage to the utilities nor other entities covered under the GPA. Key definitions in the FTA Annex explain the projects that are covered. Korea applies the same definition of a BOT contract that it uses under the GPA and its FTA with the United States. For the EU, three definitions clarify what is meant by public works concessions:
- A public works concession is “a contract of the same type as a public works contract except for the fact that the consideration for the works to be carried out consists either solely in the right to exploit the work or in this right together with payment”.
- Public works contracts are: “public contracts having as their object either the execution, or both the design and execution, of works related to one of the activities within the meaning of Division 51 of the CPC or a work, or the realisation, by whatever means, of a work corresponding to the requirements specified by the contracting authority”.
- A work is “the outcome of building or civil engineering works taken as a whole which is sufficient of itself to fulfil an economic or technical function”.
- “as complete or partial consideration, any grant to the supplier of the construction service, for a specified period of time, of temporary ownership or a right to control and operate the civil or building work resulting from such contract, and demand payment for the use of such work for the duration of the contract”.