The Public Contracts Code: A new beginning for PPPs in Italy?

With the publication in the Official Gazette of the corrective measures to the Public Contracts Code, 2025 began with a renewed focus on Public-Private Partnerships (PPPs). When implemented systematically, PPPs could channel abundant capital from long-term investors and citizens toward initiatives that ensure returns while enhancing services and infrastructure, driving innovation, and boosting competitiveness. However, achieving these goals requires determined, coherent policy-making.

The new code, which also serves as a reform aligned with the National Recovery and Resilience Plan (PNRR), contains provisions that could foster a favorable environment, particularly where local and regional strategic planning is sophisticated(though, unfortunately, this is still rare). Currently, public policies in Italy often operate in silos, hindered by the lack of national fiscal mechanisms. Moreover, investments in sectors like public transportation, energy efficiency, or healthcare technologies are not adequately recognized as contributors to GDP growth and innovation.

Notably, the corrective measures amend Article 193, which no longer applies exclusively to  privately initiated PPPs, but also strengthens the role of public authorities seeking market collaboration to develop innovative solutions for infrastructure and services through these partnership schemes. Essentially, the reform aims to promote greater transparency and competition by getting private operators involved in submitting technical-economic feasibility studies (PFTE is the Italian acronym). This mechanism could serve as training ground for PPP expertise and mark a long-awaited shift toward more systematic use of this model.

Under the revised Article 193, if a company contacts a public authority to express an interest in proposing a project or a full PFTE, it must notify the market to explore whether other operators are interested. Following this, whether one or multiple proposals are submitted, the authority must first assess the public interest of the proposals and admit only those that align with its objectives to the subsequent feasibility evaluation stage. This comparative analysis allows for dialogue with economic operators to understand and refine the proposals to better meet the authority's needs. The best proposal is granted the right of first refusal and serves as the basis for the tender process.

INVESTinIT Lab, a research laboratory at SDA Bocconi devoted to Public-Private Partnerships , analyzed the PPP market from 2018 to 2024, highlighting the importance of Article 193 for Italy. Private-initiative concessions are predominantly used for large, complex projects which account for 41% of the market by economic value but only 17% of the number of tenders.

Traditional concessions, initiated by public authorities, are used for smaller projects, which make up more than 80% of the market in terms of tender numbers but only 60% by economic value (with an average base tender value of €6 million, compared to €21 million for private-initiative concessions). These public-initiative concessions are often limited to service management.

Internationally, project sponsors are often incentivized through mechanisms like bid bonuses (additional points awarded during the tender phase), reimbursement of project expenses, or automatic admission to the best and final offer phase. While these mechanisms could theoretically foster greater competition and innovation, in practice, the real differentiators are the sector's openness to competition and the overall maturity of the PPP market.

In Italy, energy efficiency is one of the most dynamic PPP sectors, accounting for 63% of private-initiative tenders. These projects include improvements in public lighting and the energy efficiency of public buildings such as schools, hospitals, and offices. This dynamism stems from high demand (driven in part by regulatory obligations under the EU Energy Efficiency Directive) and from an active market generating numerous proposals, which ensures robust competition even in the preliminary submission phase. The amended Article 193 is expected to further fuel this process.

The key strength of Article 193 is that it delegates PFTE preparation to the market.  These studies are crucial for launching infrastructure projects and for innovatively redesigning services. The corrective measures to Article 193 now provide differentiated requirements for works and services, a long-awaited improvement. When compiled internally by public authorities, a PFTE demands resources(which are often lacking) and rapid execution, which is rarely achievable due to the need for a separate tender to outsource the task. Along with delays and resource constraints that hinder new projects, the market’s ability to propose innovative ideas and solutions offers considerable potential. However, public authorities must have the capacity to assess and identify proposals that genuinely generate value.

If used effectively by both public and private sectors, the updated version of Article 193 could help demonstrate the macro- and microeconomic significance of PPPs while enhancing pertinent competencies. With the more mature market that will emerge in the coming years, Article 193 may be amended again. Ultimately, the regulation must evolve at a pace with the market’s development.