Krakow Fast Tram Line – win before NAC

The National Appeal Chamber has dismissed in its entirety an appeal filed by one of the participants in a procedure conducted by the City of Krakow Road Administration to select a private partner to design, build, finance and then maintain the "Krakow Fast Tram Line, stage 4" in Krakow.

The private partner filed an appeal against the ToR in connection with breach of the Public Procurement Law, the Act on Public-Private Partnerships and the Civil Code, inter alia, by the Contracting Authority using its dominant position and blatantly privileging itself, e.g. by the provisions of the PPP agreement on the division of certain risks, the status of the investor and the procedure for concluding transactions securing the risk of fluctuations in interest rate. The City of Krakow Road Administration, represented by Marzena Juśkiewicz and experts from DZP's Infrastructure and Energy Practice, Michał Wojciechowski and Michał Przychoda, motioned for the appeal to be dismissed in its entirety.

The Contracting Authority indicated that the law had not been breached. The questioned provisions of the PPP agreement do not lead to the Contracting Authority being excessively privileged and they strike a fair balance between the interests of the parties. For example, on the one hand, the PPP agreement contains a number of so-called compensation events for the private partner and, on the other, it provides for a competitive procedure for concluding the transactions for the security required by the public party in a long-term contract. "It should also be remembered that a PPP agreement must divide risks in such a way that the obligations of the contracting authority resulting from it are not included in the public debt." added Michał Przychoda, Senior Associate in DZP's public-private partnership team.

The Chamber stressed that the arguments contained in the response to the appeal were exhaustive and gave clear and convincing reasons for the Contracting Authority's position.