Public Disclosure of Concessions and Public-Private Partnerships (MK0186)

Brief Description of the commitment

The commitment implies mandatory public disclosure of concluded concession agreements and PPP establishment, in the same way that public procurement contracts are also publicly available thereat. Concessions, public procurement and PPP are the three basic types of public agreements of state institutions with the private sector. Although in our country, these three types of public agreements are not yet unified in the sense that the procedures for their conclusion are managed from one centralized place, such as the Electronic System for Public Procurement (ESPP), they are still related agreements. Hence, it is necessary to make available concession agreements and for PPPs in the same transparent manner as public procurement agreements. In terms of concessions, at least during the implementation of this commitment, we refer to concession agreements for the exploitation of mineral resources and concession agreements for detailed geological research concluded by the Ministry of Economy. The commitment refers to the public publication of these agreements on the website of this Ministry. In relation to the contracts for the establishment of PPP, the commitment refers to the publication of the contracts within the ESPP. Namely, the announcements for the establishment of PPPs are published on ESPP. Following the example of public procurements, the commitment implies publishing concluded PPP agreements in the "documents" section, separately for each concluded agreement. In this way, although the commitment covers ministries, municipalities as well as public and state enterprises established by them, it actually covers only the Public Procurement Bureau because the mentioned institutions have to submit concluded agreements to the ESPP for publication (as they do with public procurement contracts).

Problem Definition

1. What problem does the commitment aim to address?

Although they belong to the same group of agreements between private sector and public sector institutions, concession and PPP agreements are not made public as is the case with public procurement contracts. With this, for an important sector which, among other things, is also one of the most susceptible to corruption, citizens, civil society organizations, journalists, even state institutions that need this information, do not have access to details of what was agreed, especially in view of concessionaires’ obligations. On the other hand, there are numerous examples of abuses of these agreements. Making agreements unavailable not only makes it impossible to monitor their proper implementation, but in a way also supports corruption because such important information is kept secret. Although there is an obligation under the National Strategy for Prevention of Corruption and Conflict of Interest 2021-2025, concession agreements are not publicly announced thereto. The same is the case with the agreements for the establishment of PPP. For both types of agreements, the opinion that prevails in the public is that they are generally corrupt, which limits the possible further investments of the business sector through these two types of agreements. Unlike North Macedonia, in the world, precisely concessions and PPPs are a significant instrument for attracting foreign investments and for economic development, contributing 2 to 3 percentage points to the annual growth of the countries' gross domestic product.

2. What are the causes of the problem?

It seems that the root of the problem is the human factor, that is, the lack of will to publish these agreements. Namely, the Ministry of Economy is now publishing a document in closed pdf format on the granted concessions for mineral resources, with the basic data on about 370 such concessions such as: name of the concessionaire, address, e-mail, duration of the contract, date of conclusion of the agreement, raw material, site of the concession, the municipality in which it is located and the covered area in square kilometers. However, among the publicly published data there is no data on the compensation paid for the concession area, either the fixed compensation per square kilometer or the variable one, for the amount of raw material exploited. Also, the terms and conditions that the concessionaire has with the concession agreement are not known, which makes these agreements completely impossible for any kind of public inspection or control in their implementation. The situation is similar to the agreements for the establishment of PPPs. Open calls for such agreements are published on ESPP, but not information about the concluded agreements, nor the agreementsthemselves, although we are talking about only a few agreements per year.

Commitment Description

1. What has been done so far to solve the problem?

As mentioned, although in the domain of public procurement, the transparency and availability to the public of a large number of information and documents related to tenders gradually increased, this trend was not followed for the other two types of agreements, such as concessions and PPPs, regardless of the fact that they are similar agreements. Partly because of this, but also because of outdated regulations, the full potentials they offer have not been used in both areas, especially for attracting investments and for economic development, not only at national level, but also within local environments. There were attempts to improve the situation with other initiatives, but they were also unsuccessful. Regarding concessions, as a result of a commitment in the OGP Action Plan 2016-2018, a register of concessions for mineral resources is published on the website of the Ministry of Economy, but it does not include the concluded agreements. As for PPPs, only the announcements for such agreements and the tender documents are published on ESPP, but that possibility is not used to publish, in the same place, notices regarding the concluded agreements, as well as the agreements themselves, as is the case with public procurement.

2. What solution are you proposing?

As far as PPPs are concerned, the problem will be completely solved, because the already existing opportunity will be used - to publish the concluded PPP agreements on ESPP, in the section where information about PPPs, such as the announcement and the tender documentation are now being published. For concessions, this is only a partial solution, as the agreements will be published on the website of the Ministry of Economy, where basic information about concessions is being published thereat. Partly, because it is necessary to have a fully electronic solution for concessions, such as ESPP, and because not all concessions are covered, but only those for mineral resources and exploitation. But the publication of these concession agreements will mean a first step towards transparency of other concession agreements concluded by other institutions as well, which may follow in the next NAP for OGP.

3. What results do we want to achieve by implementing this commitment?

The commitment will actually mean encompassing the transparency of public agreements (public procurement, concessions, PPP), which is of great importance in order to enable public insight into these agreements and public verification of whether they protect the public interest. All these agreements are among the most susceptible to corruption and this will enable its detection, but also its prevention, with the direct role of citizens and civil society organizations. The commitment will actually continue the efforts of the Ministry of Economy for increased transparency of the awarded concessions.

Commitment Analysis

1. How will the commitment promote transparency?

This commitment leads to achieving significant progress in transparency in the area of concessions and PPPs. The commitment for public publication of these agreements is in line with the measures foreseen in the National Strategy for the Prevention of Corruption and Conflict of Interest 2021-2025, as well as with the recommendations of the State Audit Office in the conducted Audit Report to the Basic Budget of RNM for 2022, in order for the municipalities to have the concession agreements granted for their territories.

2. How will the commitment foster accountability?

By making concessions and PPP agreements available to the public and all stakeholders, the accountability of public institutions will increase significantly thereat. Thus, the commitment will also contribute to increasing the trust in public institutions by the public and potential investors in these two areas which are now still taking place under the veil of non-transparency and suspicions of corruption.

3. How will the commitment improve citizen participation in defining, implementing, and monitoring solutions?

Having the details of the agreements, especially the financial and other aspects and the terms and conditions under which the concession was granted, citizens can evaluate whether the agreement is good or bad for public resources, such as mineral resources, or whether and how the public interest is protected in the PPP agreements. Knowing that, citizens can also prevent potentially harmful contracts, which means their direct participation in improving the situation.

Commitment Planning (Milestones | Expected Outputs | Expected Completion Date)

1.3.1 Coordination and reaching an agreement on the commitment implementation manner and the technical preconditions | An agreement and a specific technical solution were reached for publication of concession agreements on the website of the Ministry of Economy and for publication of PPP agreements on ESPP | May 2024

1.3.2 Publicly announce the concession and PPP agreements | Agreements are publicly announced | February 2025