To ensure the implementation and realisation of infrastructure projects, including those financed under the National Recovery and Resilience Plan (NRRP), the Romanian Government adopted the Emergency Ordinance No. 26/2022 on amending and supplementing certain regulatory acts in the field of public investment (GEO 26/2022). GEO 26/2022 entered into force upon its publication with the Official Gazette of Romania on 21 March 2022.
The matter was of real importance for the Romanian state considering that the total amount of funding for the proposed transport projects of national interest under the NRRP is of EUR 12.7 billion. The urgency for enacting this piece of legislation was also justified by the fact that the authorities are required to complete the projects by 2026, with contracts/framework agreements to be signed by 2023.
Main regulatory novelties
The legislative amendments have an important impact on the transport sector both in what concerns the public procurement procedures and the implementation of infrastructure projects.
In what the public procurement legal framework is concerned, here are some notable novelties:
- in contrast to the previous regulations, the contracting authority will be able to use the negotiated procedure without prior publication in situations where this is an absolutely necessity, when, for reasons of extreme urgency brought about by events which could not have been foreseen by the contracting authority the time-limits for the open, restricted, competitive or simplified procedures cannot be complied with;
- for infrastructure and transport projects, the contracting authority has the right to set under the procurement documents, with solid justification, a longer contractual term, to deal with unforeseen circumstances;
- the deadline for requesting supporting documents has been reduced to one day from the time the first-placed tenderer was determined (it may be extended by a maximum of 3 working days at the contractor's justified request) and these documents must be provided within 7 working days of receipt of the request;
- the legislator has transferred to the jurisdiction of the civil courts the settlement of disputes arising from the termination/early termination of public procurement contracts and has established short time limits of 30 days for initiating legal proceedings arising from the cancellation, annulment, unilateral termination or early termination of public procurement contracts. If the court definitively decides against the economic operator following the appeal, the contracting authority has the obligation to take the necessary steps to withhold the bail within the coverage of the damages caused by the delay in completing the public procurement procedure.
Regarding the implementation of infrastructure projects, the following amendments are relevant: (i) the buildings located in the expropriation corridor were exempted from the requirement to obtain authorisation for dismantling; (ii) the responsibility for utility relocation has been transferred from the utility owners to the expropriator as the works for clearing the site by diverting or protecting the networks will be carried out by the expropriator on the basis of a technical project for utility relocation approved by the utility owner (this should eliminate coordination difficulties between institutions and delays caused by late utility relocation); (iii) these projects have been excluded from the application of the provisions according to which the relocation of utilities located in the expropriation corridor of infrastructure projects is carried out through natural gas/electricity transmission/distribution operators.
Also, several changes have been made in what concerns the obligations of the authorities competent to issue permits or authorisations for infrastructure projects. These changes mainly refer to tighter issuance deadlines. For instance: (a) the planning permissions are to be issued within 15 calendar days; (b) the permits required by the urban planning certificate, including those relating to the relocation of utilities, must be issued within 10 calendar days; (c) the construction permit must be issued within 15 calendar days; (d) the environmental-related permits have to be issued within 30 days.
Impact of legislative changes
GEO 26/2022 is part of a legislative package that aims at reducing the time taken to carry out public procurement procedures and resolve incidents during the execution of these contracts to create a mechanism to speed up the implementation of the infrastructure projects financed by the NRRP.
The main novelty and the one which may have a substantial impact on the performance of public procurement contracts is the one concerning the negotiated procedure without prior publication.
According to the current legislative amendment, in the event of difficulties in the execution of contracts that cannot be awarded according to general procedures by the contracting authority and urgent measures are required, the contracting authority may opt for the negotiated procedure without prior publication. One of the reasons for using this procedure is to complete the infrastructure projects without having to meet the deadlines mandatory in a classic public procurement procedure.
In addition, given the specific features of transport infrastructure projects (e.g., guarantees, need for continuity of works), the contracting authority is no longer limited to concluding contracts only for the period of the emergency which led to the use of the negotiated procedure without prior publication. In other words, the amendments to the public procurement legislation aim to make the arrangements for dealing with incidents during the contract performance more flexible.
Despite its shortcoming (e.g., the obligation of the contracting authority to withhold the bail which may discourage the economic operators from appealing the decisions of the authority), we believe that the amendments brought to the public procurement legislation are welcome in the context of the need to achieve the objectives set by the projects financed by the NRRP: implementation in an ambitious timeframe of complex and vital infrastructure projects.
By Andrei Stefanovici, Director, and Denisa Neamtiu, Senior Associate, Bancila, Diaconu si Asociatii