One of the federal government's initiatives to stimulate privatization processes at the federal, state, and municipal levels, Presidential Decree No. 786/2017 was converted into Law No. 13,529 on December 4.

Among the mechanisms to foment development provided for by the law, the authorization for the Federal Government to participate in a fund set up exclusively to finance specialized professional technical services that will support the structuring and the development of concession projects and public-private partnerships stands out. Subject to the framework of the State-owned Companies Act (Law No. 13,303/2016), the hiring of these professionals must be regulated by means of internal regulations on bids and contracts to be observed by the fund, including with respect to the scenarios for dismissal and unenforceability of bidding.

The fund, which will have a private nature and equity separate from that of its unitholders, will be created, managed, and represented by a financial institution controlled directly or indirectly by the Federal Government. In addition to federal entities, any individual or legal entity, public or private, under public or private law, may be a unitholder. An initial fund payment of R$ 40 million is expected, in 2017, plus R$ 70 million in each of the next two years.

In addition to the payment of units, the assets of the fund may be constituted through (i) donation from foreign states, international and multilateral organizations; (ii) reimbursement of amounts spent by the managing agent in the contracting of professional services, per the purpose of the fund; (iii) funds arising from the sale of assets and rights or from publications, technical material, data, and information; and (iv) financial proceeds obtained from the investment of its funds.

Law No. 13,529/2017 also introduces significant changes in the legal framework for public-private partnerships, the Growth Acceleration Program (PAC) and the Brazilian Agency for Guarantee and Guarantee Fund Management (ABGF). Thus, an amendment is introduced for article 4, item I, of Law No. 11,079/2004, in order to reduce the minimum amount of administrative and sponsored concessions contracted to R$ 10 million, half of that originally fixed by the PPP Law. Regarding the PAC, Law No. 11,578/2007 allows the program to benefit from the transfer of funds identified in the budget law as of the type “remnants to be paid", whether or not inserted via parliamentary amendments. Finally, the scope of the ABGF was expanded, allowing the Infrastructure Guarantee Fund to cover risks in public-private partnerships even when contracted by municipalities, and not only by the Federal Government and the states, per the initial version of Law No. 12,712/2012.

In short, the conversion of MP 786 complements the list of regulatory tools available to the public administration to stimulate privatization processes. Since projects modeled on concessions and public-private partnerships are only able to attract investors when properly structured from a technical-operational, economic-financial, and legal-institutional point of view, a new standard of quality is expected in the next call for proposals to be published, especially by the states and municipalities.