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Necessity

The modern and qualitative infrastructure and the state of the services is a major stimulus for an economic growth and hence to increase the standard of living. The Government of Bulgaria and the local administrations are responsible for providing public services and facilities. In the process of its economic development our country needs modern and alternative solutions in the field of public services, upgrading of infrastructure, facilities, and utilities. International practice shows that the public-private partnership (PPP) is a successful financial instrument to ensure investments in public infrastructure where state and municipal budgets do not have the resources and want to provide better value for public money invested. The need of investment to build the basic infrastructure to provide quality public services in the country requires the application of innovative methods for structuring and financing of investment projects.

Development of PPP in Europe over the past two decades based on the following economic logic:

 

• The accelerated regional development in Europe combined with the common European market in recent years led to the need to develop transport, environmental and social infrastructure to meet growing needs;

• The combination of these needs to adopt European directives in the field of environment and transport lead to the need for greater investment in basic infrastructure;

• Awareness of the ability to achieve better value for public money invested through the use of effectiveness and efficiency of private sector in providing public services;

• Existing restrictions on government budget imposed by tight monetary and fiscal policy in Europe;

• Reorient the public sector to obtain a final result - a service and not the acquisition of assets;

• Ability to make payments from the public sector after receiving the desired service thereof;

• Implementation of a comprehensive approach to the design, financing, construction and operation as the public sector begin to focus on its invested funds throughout the project cycle;

• Provide an opportunity to share the risks between the public and private partners.