Art. 1- Object: This law aims to establish standards and mechanisms to promote, through public-private participation, investments in public infrastructure and in the provision of services that they are intended or are complementary to them; well as in the production of goods and provision of services that are themselves the subject of agencies, entities, public companies and companies in which the State is party.

To this end, the law establishes the legal form of public-private participation contracts, contemplated the figure of the private sector and regulates the use of trusts for the purposes set out in this law.

Art. 2 - Principles and definitions: 1 All activities associated with this Law must observe the following general principles:

a. Supervision and control of the State: The State has jurisdiction and powers of planning, control, punishment, regulation, supervision and monitoring of the implementation of contracts, subject to this Act.

b. Transparency and accountability: It will be made public information on contracts regulated by this law, including acts involving fiscal commitments to the state that have effects on users.

c. Social Performance: Any project carried out under the scope of this Act shall respond to the realization of the common good in the public interest, clearly establishing the overall objectives and benefits that the state pretendes to receive. The State shall define general criteria for social returns, in order to evaluate each project prior to its implementation.

d. Economic efficiency: The contracts covered by this law should be structured to facilitate the efficient management and use of infrastructure and services. The mechanisms of public-private partnerships can only be used when, through economic and technical studies, it is found that are efficient, effective and sustainable for the construction of the work and the service option.

e. Competition and Equality: The selection of the private participants will be made by transparent and competitive procedures, respecting the principles of non-discrimination, equality and wide publicity to promote the participation of the largest number of operators and select the private participant who can provide good or service in the most efficient and effective manner.

f. Legal certainty: Contracts establish the regime of rights, obligations and responsibilities of the parties; and may be modified in accordance with applicable regulatory and contractual framework.

g. Seasonality: A contract should contemplate a maximum term, including any extensions, shall not exceed thirty years, unless exceptional extensions provided in cases provided for in Article 34 of this law. Where not specified in the contract deadline, it is understood that this applies for the maximum term.

h. Fiscal responsibility: For investment made through contracts subject to this Act, must be considered payment capacity of the state to meet financial commitments arising from the

implementation of projects, and proper accounting of firm and contingent commitments future, within the limits established by law.

i. Environmental Sustainability: The contracts under this Act must be designed and developed considering the required environmental standards and general regulations on the subject.

Definitions: For the purposes of this Act, shall apply:

a) State Agencies and Entities: These are all public institutions defined as such in national law, because of their legal status;

b) Of public-private partnership contract: contracts are contained in Part II of this Act under which the Contracting Authorities involved with legal entities of private law in an investment project related to the purpose of this law, through a contractual legal relationship long term commitments with a distribution of risks and benefits between the parties;

c) Private Participant: Are private law legal persons participating in a public-private partnership project.

d) Contracting Authority: Are State agencies and entities, as well as companies and partnerships with state shareholding having the competence to enter into public-private partnerships;

f. Proponent of private enterprise: Is the ones who files an application of private initiative pursuant to this Act; and,

g. Public Founders: Are State agencies, and entities that are involved in or trusts or trust funds to develop public-private partnership projects.

TITLE II

PUBLIC PRIVATE PARTICIPATION AGREEMENTS

3rd - Scope . The contracts of public-private partnerships may include infrastructure and service management , including road , rail, port , airport , waterway projects , dredging and maintaining the navigability of rivers projects; the social infrastructure ; electrical infrastructure ; improvement projects , equipment and urban development; water supply and sanitation; among other investment projects in infrastructure and public utility services . They may also comprise the production of goods and provision of services that are themselves the subject of agencies , organizations, companies and companies in which the State is party . The commitments of the private participant will be established in the contract and shall include at least the total or partial financing of investment and operation and maintenance of infrastructure and its associated services, and any of the following:

a. the design and construction of infrastructure and the equipment if necessary, or b. construction or repair and improvement of infrastructure and equipment that is necessary or appropriate, c. in the case of public companies and corporations with state participation, the management of the services of its object.

Only may be carried out under the regime of participation public-private laid down in this Act projects in which investment expenditures exceed, in present value, equivalent to 12,500 (twelve thousand five hundred) minimum monthly salaries for various activities not specified in the capital city of the Republic.

Article 4- Distribution of commitments, risks and benefits. The contracts of public-private partnership must state expressly to specific situations the risks, benefits and commitments that take respectively the state and the private participant.

Section 5 - Legal regime. The contracts of public-private participation shall be subject by the terms and conditions of the contract, the provisions of this act and the regulations issued by the executive and other statutory provisions as are applicable

Chapter II

Institutional Framework

Article 7 - Competent authorities. Contracting Authorities, within the scope of their respective powers, shall develop projects through contracts of public-private participation under this Act. Contracting Authorities may jointly develop projects of public-private partnership jointly; in which case, hold the relevant agreements, contracts or agreements with this purpose, according to the regulations.

The Ministry of Public Works and Communications (MOPC) shall be the competent public entity for the development, selection, award and execution of public - private partnerships in the field of transport and communication channels, including dredging and signaling rivers and airports. In case of decentralized entities that have responsibilities related to those projects, the Ministry of Public Works and Communications (MOPC) assume the powers necessary for the conclusion of the contract and its performance, replacing such authorities in exercising those powers. The decision to push a project through the arrangements provided for in this law require the approval of the Executive, in accordance with the procedure established in the regulations. Prior to this approval, assessment procedures provided for in this law and its regulations are to be made.

Art. 8 - Atributions of the Contracting Authority: The Contracting Authority, under the coordination of the Public-Private Partnership Project Unit created in the next article of this law, will be responsible for structuring, selection, award and conclusion of the public-private partnership, and the control of the proper execution and fulfillment of the obligations assumed by the private participants. All that, without affecting the regulation and control attributions that apply to other state agencies in accordance with their original powers and which are conferred by this Act. To develop public-private participation projects, Contracting Administrations should coordinate with the Public-Private Projects Unit, project structuring, preparation of specifications and tender evaluation by the procedures and mechanisms established in regulation. They may also instruct the Public-Private Partnership Project Unit exercising the necessary powers for the execution and performance of contracts established by this Act, by mandate or delegation agreements. The regulations determine the conditions under which these agreements are governed. During the contract execution stage, the Contracting Authorities must first notify the Private Public Participation Project Unit the following acts:

a) Unilateral and mutual agreement modifications under Articles 32 and 33 of this law contract;

b) Requests for compensation or compensation raised by the private participant for any reason, including those provided in Article 34 of this law;

c) Sanctions the private participant;

d) Any suspension of the contract under Article 35 of this law

e) The early termination of the contract before the decision; and,

f) Any other circumstances provided for in the regulations of this law.

Art. 9- Public-Private Partnership Project Unit: Public-Private Partnership Project Unit is created as a specialized agency of the Ministry of Planning. The organization of this division will be established in the regulations of this Act and resources for implementation and strengthening will be incorporated into the law of General Budget of the Nation.

The functions of the Public-Private Partnership Project Unit are:

a. Promote and coordinate with relevant authorities and public organisms the plans, policies and standards for the development and functioning of the modalities of Public Private Participation;

b. Coordinate and promote projects of public-private partnership with the Contracting Authorities, and advise them about structuring , selection, award , execution and performance of contracts for public-private partnerships ;

c. Identify opportunities and mechanisms to promote Public- Private Partnership between contracting governments to provide public services or activities of general interest;

d. Promoting Public Private Participation Projects among investors and potential funders and the community in general;

e. Develop general bidding terms and conditions and advise the Contracting Authorities in the preparation of the individual sheets and the selection process of bidders;

f. Carrying the Public Registry of Project Public Private Participation and Private Initiatives , under the conditions defined by this law ;

g. Post on the website that defines the regulatory information related to projects, contracts and their execution, according to the records that Contracting Administrations submits;

h. Maintain a broad public policy of information and accountability

i. Carry out other duties or responsibilities under the law or regulation assigned.

Art. 10- Ministry of Finance. The Ministry of Finance shall have the following functions in the context of structuring and development projects carried out under contracts of public-private partnerships:

a. Assess risk allocation and fiscal impacts under the study phase and preparation of draft contracts for public-private partnerships

b. Give a prior opinion with binding projects of public -private participation, risk sharing and fiscal impacts, and the feasibility of the implementation of projects;

c. Ensure consistency of fiscal firm and quantifiable contingent future payments of these projects, subject to the terms of this Act;

d. Keeping track of the firm and quantifiable contingent future payments involving the approval of each project;

e. Evaluate and report at each General Budget Law of the Nation, the total amount authorized to transfer liquidity fund each year as a firm and quantifiable contingent future payments to participants by way of private investment , according to existing contracts when it involves so ;

f. Check the Contracting Authority included in each bill of General Budget of the Nation corresponding to the resources needed to meet the obligations arising from these projects allocation, as the case;

g. Hire at least every four years an external audit firm and contingent liabilities of contracts governed by this Act;

h. Hiring an international audit to assess the quality of services under public-private participation, and raise the resulting report to the Presidency of the Republic;

i. Issue binding technical advice in the areas of their competence, based on the commitments and fiscal risks for Financial Administration, about:

1) The bidding terms and conditions prior to approval;

2) The contracts and amendments prior to their subscription basis;

3) Claims for damages or compensation raised by the private participant for any reason;

4) The early termination of the contract before the decision; and,

5) Any other circumstance that might affect state resources.

j. All other powers provided by law.

The deadlines for issuing opinions will be established in the regulations.

Art 11. Guarantee Trust Fund Liquidity Contract and Public-Private Participation. A trust fund and liquidity is created to accomplish the obligations derivated from of the firm, contingent and measurable commitments that could force the state and the costs that correspond to the resolution of disputes through the subscription of public-private participation contracts.

The trust will be financially administered by the Development Finance Agency's with a separate fund of its own, under the provisions of Law No. 921/96 "Business Trust" and its regulation. The State, acting as trustee, will act through the Ministry of Finance. The regulations will establish the mechanisms for the implementation of this fund. The fund will maintain a minimum percentage of 10% (ten percent) of cumulative quantifiable contingent liabilities set out in Article 14 and 100% of the firm's liabilities next calendar year. The regulations may provide different percentages of quantifiable guarantees contingent risks, according to the particularities of each project.

The fund's resources will come from, among others:

a. A state contribution, which will be constituted with funds established in paragraph a, of Article 3 of Law No. 4.758/12 "That creates the National Fund of Public and Development (FONACIDE) Investment and Fund for Excellence in Education and Research, "not committed to finance programs and projects running. This contribution will gradually integrate up to a maximum of 25% (twenty percent) of FONACIDE resources for the National Treasury received in the year of enactment of this Act.

b. A percentage of the contributions resulting from payments to private participants made to the Contracting Authority under the terms of the contracts of public-private partnerships as set out in each case, in accordance with Article 24, paragraph e) of this law; the

percentage to be allocated to this fund and liquidity will be defined in each case by the Executive;

c. Contributions resulting from payments made to private participants to the Contracting Authority under the terms of the contracts of public-private partnerships related to surpluses of projects or as stated in each case;

d. Contributions other entities engaged.e. Return obtained by the administration of the Fundf. The fines levied on private players under the penalties provided in this Act, its regulations

and the respective contracts

In cases in which the Fund can’t vouch for all of the liabilities, the Ministry of Finance will implement the relevant legal and administrative mechanisms for each case.

Resources transferred to the fund under this law will not be returned to the Treasury, but remain within the fund affected and will continue its objectives for the following fiscal years. Payments to be made to the fund are governed by the Law No. 921/96 "Business Trust" and not subject to the provisions of Law No. 1.535/99 "From Financial Administration of the State". Payment schedules must be provided by the Ministry of Finance to transfer resources. This trust will have the same tax treatment under the Trust Business Act and its regulations. The Development Finance Agency, as trustee, will receive a fee for the administration assets of this trust, which will be agreed with the trustee in the Indenture under the trust fund and in accordance with the guidelines laid down in the respective regulations.

Art 12. - Percentage assigned to departmental and municipal governments. 2% (two percent) of the payments established in Article 24, paragraph e) of this Act in cases that are specified in the contracts, will be allocated to the departmental governments and municipalities affected projects. For projects involving more than one municipality or Government this percentage will be distributed in proportion to the areas concerned. These funds will be exclusively applicable to infrastructure.

7% (seven percent) of funds established in subsection a) of Article 3 of Law No. 4.758/12 "That creates the National Fund of Public and Development (FONACIDE) Investment and Fund for Excellence education and Research ", could be spent on public-private partnership projects to be developed in the capital of the Republic and its metropolitan area related to the purpose of this law.

The distribution and deposit of revenue described above will be made by the Ministry of Finance and in coordination with other technical agencies of the state, especially in bank accounts by those authorized, without further formalities.

Art 13.- Public Registry of Projects of Public-Private Participation. The Public-Private Unit of the Technical Secretariat of Planning will be responsible for keeping a public record of all projects executed or been executed in the form of public-private partnerships, including

private initiatives. Registration shall be public and shall be guaranteed permanent access to its information by electronic means.

Art. 14.- Fiscal Liabilities arising from public-private partnership contracts. The Ministry of Finance shall issue the accounting rules for the assessment and registration of firm commitments and contingent. Also, you must keep these commitments updated control. The funds generated by the operation of the infrastructure or the provision of public services in developing projects of public-private participation, won’t be considered in the accounts General Budget of the Nation, during the execution of the contract.

For the purposes of the provisions of this Article and the other references made in this regard in the present law, "firm commitments" are considered the obligations of the State involving the private participant to pay a fee for performing the acts referred in the contract, including any amendments thereto; while "contingent commitments" to potential payment obligations by the Contracting Authority and for the corresponding guarantees that the first granted to improve the risk-return project participant and encourage private participation private. For registration purposes, will be considered firm commitments and contingent quantifiable.

The Public-Private Participation Project Unit must submit an annual report to the Executive and the Legislative detailing the Mechanisms and Measures Implemented for transparency in each of the projects, and including the results and indicators for verification; This report will be submitted Also to the Comptroller General's Office and published on the official website determined on the regulation

Must be promulgated in the official Web site Referred to in the Preceding paragraph: a) Calls specifications and invitations to bid, prequalification and any other selection procedure provided In this Act, and Their Corresponding addendums; b) With the Corresponding Award decisions bases; c) The contracts and Amendments; d) Decisions of early termination; and e) Any other information indicating in the regulation.

Competent authorities will be responsible for providing the above information to the administrator of the Web site in the form and deadlines established in the regulations.

Chapter III

Structure and processes

Art. 16.- Starting the process: The process leading to the signing of a contract for public-private participation can be started automatically by the Contracting Authority itself or originate in a private initiative under the provisions of Title IV of this Act.

Art. 17.- Previous evaluation. Prior to the initiation of the procurement character the Contracting Authority shall have the technical, economic and legal analysis relevant. It shall also to have the opinion of the Ministry of Planning (STP) and the favorable opinion of the Ministry of Finance. The regulations shall establish the scope, form and content of previous

assessments, including, among others, the engineering, operational, commercial, economic, financial, legal, environmental, and economic and social impact, as may be applicable to each case. The Contracting Authority must prepare environmental and social assessment of value for money of the project, in the form prescribed by the regulations.

Art. 18. - Eligibility for contracts with the Administration. Only may act in character Private Participants of the Contracting Authority, national or foreign legal persons, who fulfill certain basic conditions provided for this purpose in this law, its regulations, and the statement of terms and conditions of each recruitment process.

Art. 19. - Incompatibilities. They may not be bidders or Private members:

a. The authorities and officials of the Paraguayan state , decentralized , self-governing or binational entities , departmental governments and municipalities , with the same relatives to the fourth degree of consanguinity or second degree , in the Contracting Authorities ; and companies with which they are linked because of management involvement or dependence ;

b. Those who have acted as consultants hired by the Public Administration Contracting in project implementation which intend to participate as potential bidders , provided that such participation may involve preferential treatment with respect to other potential bidders ;

c. People with pending legal proceedings for breach of contract with the State, provincial governments or municipalities, or who have been convicted of such cause within five years prior to the call ;

d. Those who are in bankruptcy or for bankruptcy ; and ,e. The tax debtors .

The persons specified in the foregoing grounds may act as members of a consortium bidder or contractor or subcontractor of this, directly or through another entity controlled, linked or form part of an economic unit with it. Also, the above prohibitions shall apply to those individuals or entities for reasons of management participation or other circumstances, can be presumed to be a continuation or derived by transformation, merger, transfer or succession or otherwise, of those undertakings included in one or more of the grounds set out above.

Art. 20.- Types of procurement procedures. The selection of the private participants shall be by public tender procedures. Without limiting the foregoing, you may award contracts through other competitive procedures to be regulated, provided that they are contrary to the general principles of economy and efficiency, and transparency and equality. Competitive procedures applied may provide additional or intermediate bodies such as prequalification procedures involved or similar.

In any case may be submitted to the selection procedures of domestic and foreign persons who meet the provisions of this Act, its regulations and the bidding terms and conditions.

Art. 21.- Prequalification of bidders. The Specification may consider prequalification of bidders to select stakeholders who meet uniform and reasonable requirements, goals established, which may concern only legal, financial or technical capacity, experience and results in other works commissioned in the past. The list of prequalified shall be published on the website of the Contracting Authority.

Art. 22.- Convocation. The invitation to stakeholders to participate in the competitive process is conducted within the Contracting Authority determines, according to the characteristics of the proposed public-private partnership that promotes. This period may not be, in any case, less than sixty days prior to the receipt of bids. The call will take place with sufficient advertising according to each case. For these purposes, the notice must be published at least once in a newspaper of national circulation, and will be posted on the website of the National Information System on Public Procurement.

Art. 23.- Evaluation of proposals. In the instance of evaluation of the proposals received, the Contracting Authority together with the Private Public Project Unit Participation, and in accordance with the stipulations of the Regulatory Decree, verify that they meet the requirements established in the rules of the competitive process, and containing sufficient to adequately assess the same elements. The evaluation criteria that are clear, measurable and allow an objective and impartial evaluation of proposals will be used. They may, among others, used systems involving the allocation of points to technical and financial bids, determining the final score from the weight of those either, those determining a threshold above which are considered accepted technical proposals, assessment of tenders is based on economic or financial factors.

Art. 24.- Award and signing of contracts . The award shall be decided according to the evaluation system defined by default in the statement scoring system , which must meet one or more of the following factors : a. fees paid by users; b . remuneration for services rendered to the State; c . term of the Contract; d . State contributions to the bidder to supplement revenue from users; e . payments offered by the bidder to the Contracting State Administration ; f . income guaranteed by the State; g . partial or total score obtained in the technical grade ; h . rating of other useful and necessary additional services; i . Total revenue for the contract , calculated in accordance with the provisions of the tender ; and j . other objective factors defined in the regulation .

Art. 25.- Impugnations. Contrary to the decisions of qualification and prequalification, as well as to react to the award, interested parties may deduct appeal before the Contracting Authority within five working days from the date on which notice . To this end, and as a

condition of admissibility of actions claiming the appellant shall submit the guarantees established by the challenged statement. In case of rejection of the challenge presented, such warranties shall be implemented by the Administration.

Art. 26.- Guarantees maintenance of supply and contract compliance. Offerors shall provide security of supply and maintenance requirements needed to apply to the procedures for selecting private stakeholders convened by the Contracting Authority, and a guarantee of contract performance as a necessary requirement to sign the respective public-participation agreement private; as defined in each case by the Contracting Authority. Such guarantees may become deposits, guarantees, bonds, letters of credit "stand by" and insurance policies to be issued by an entity of the financial system duly authorized by the Central Bank of Paraguay in the terms and conditions for such purposes set the regulatory bases and the corresponding competitive procedures for creation, updating, rebuilding, replacement, execution and withdrawal.

Art. 27.- Company specific object and trust. The bidder who has been awarded will remain bound to constitute in the Republic of Paraguay, within the period specified in the statement, a limited company with whom the contract of public-private participation is held. The project awarded bidder will be the majority shareholder in the percentage set out in the regulations. This company has the sole purpose determined by the specifications, in accordance with the characteristics of the works or services procured items. It will last at least the duration of the contract term, plus two years and should last as long as the warranty period of the works and services performed. The company's shares will be nominative.

Alternative or in addition to the obligation to establish a company specific object, the statement may make it obligatory that all resources are managed in the project will be administered by a committee composed of all assets and liabilities, present and future trust linked to project. The Contracting Authority will have the power to require information as it deems necessary which will be directly delivered to the applicant by the trustee, at such times and terms established in the contract. Yields of private resources in the trust belong to the project. Formation of the trust, within three working days, the fiduciary must report to the Ministry of Finance on behalf of the settlor and the beneficiary, the value of the managed resources through the trust and any other required.

Chapter IV

General contractual arrangements

Art. 28.- Economic system of contracts for the development of projects of public - private participation. The consideration of the private participant in each contract shall be determined according to the type and characteristics of the proposed public-private partnerships, can provide different forms of remuneration , such as granting of rights of user fees , public contributions or other sources of income. Compensation mechanisms may be related to the availability and service levels. Public input may include proceeds from payments revenue, project financing guarantees, guarantees of minimum income collection, tax exemptions provided for in the laws , contributions to the capitalization of special purpose companies , loans , among others. The contract for the project development of public -private participation, shall determine the conditions under which compliance such public contributions are held, as well as those relating to any amendments or termination . The resources generated by economic exploitation of the project are not considered expenditures of public resources.

Public Contributions may include proceeds from payments revenue, project financing guarantees, guarantees of minimum income collection, tax exemptions provided for in the laws, contributions to the capitalization of special purpose companies, loans, among others. The contract for the project development of public-private participation, shall determine the conditions under which compliance such public contributions are held, as well as those relating to any amendments or termination. The resources generated by economic exploitation of the project are not considered expenditures of public resources.

Art. 29.- Assignment and subcontracting . The private participant may voluntarily relinquish public-private partnership contract to a third party. The voluntary assignment , like the forced cases arising from special guarantees execution , include the transfer of all rights and obligations of the contract. The transfer can only be made to a legal person or group of them, who qualifies and meets the requirements demanded bidder for the original contract, which is not subject to disqualification under the law. The assignment will require the prior authorization of the Contracting Authority to verify the effects of these extremes. The private participant may also subcontract activities at the agency under the respective contract of public -private participation, whether principal or accessory , related , or complementary to those derived character. Subcontracting does not involve the release of responsibilities to the private participant.

Art. 30.- Assets involved in the development of public-private participation projects . In the development of these projects , under the circumstances of the case and the respective contracts , the private participant may use different types of goods , namely :

a. property owned by the Contracting Authority or other public entities , existing or to be created or supplied during the contract period , for which the Contracting Authority gives

the participant the right to private use , the latter being forced to revert to the Administration to completion the contract; and , b . owned property , preceding the signature of the contract or to be created , or provided during the term private participant, and for which the Administration should transfer to or removed from the project area at the end of the contract for public-private participation . In these cases, the contractual instrument shall determine the form of transfer or retirement of assets, as appropriate.

Art. 31.- Guarantees and insurance. The contract will specify the guarantees, insurance or bonds that must constitute the Private Participant, in accordance with the Regulation.

Art. 32.- Unilateral modification of the contract for the development of projects of public-private participation provided by the Administration. The Contracting Authority may unilaterally modify the contract based public-private partnership for the public interest, duly supported by expert advice. The changes made to the contract under this prerogative should be appropriate and proportionate to the causes that motivate, but must endeavor to, where possible, respect the nature of the contract and the economic and technical conditions contractually agreed. In such cases, the Contracting Authority shall be required to rebalance the economic and financial conditions of the contract of public-private participation, fully compensating the private participant for damages that eventually appear to be the alteration of the equation. The Regulations establish the maximum amount of investment that the private participant may be required to make under the provisions of the preceding paragraph, and the maximum period within which the Contracting Authority may order the modification project.

Art. 33.- Changes in hand. The Contracting Authority and the Private Participant may agree to modify the characteristics of the works and contracted services, in order to increase service levels and technical standards set out in the tender documents by signing the corresponding supplementary agreement. The parties shall endeavor, where possible, respect the nature of the contract and the economic and technical contractually agreed terms.

The Regulations establish the maximum amount of investment that the Contracting Authority and the Private Participant may jointly agree, and the maximum period within which the project may make changes.

Art. 34.- Compensation for supervening events. The Private Participant shall be entitled to obtain restitution from the Contracting Authority, if verified the following types of events or unpredictable and extraordinary to the signing of the public-private partnership made when serious harm occasioned to the private participant and substantially alter the financial and economic balance of the contract. a. unilateral public-private partnership modifications contract arranged by the Contracting Authority, within the framework of its powers and authority in the public interest amendments; according to the provisions of Article 32 of this law; b. fortuitous events or force majeure, beyond the control of private and uncontrollable by this participant provided the right to compensation for these events is expressly provided for in the contract; c.

acts of a particular nature of the state that produce direct effects on the contract for public-private participation d. general acts of the state that produce direct effects on the contract of public-private participation, provided that the right to compensation for these acts are expressly provided in the contract; and, e. other events expressly provided in the contracts of public-private partnerships that are not attributable to the private participant.

The compensation in these cases will take place after verification of the aforementioned serious harm; and can be implemented through an extension of the contract term not exceeding ten years, of the variation in investment regime initially planned changes in the tariff regime, subsidy payments, among others, according to the scope, mechanisms and procedures under public-private participation contracts.

Art. 35.- Suspension of the contract. The Contracting Authority may reasonably suspend the contract: a. Accident or force majeure duly audited, in accordance with the terms of the tender and the contract; and, b. for any other reason that the statement set.

As a consequence of suspension of the contract, the Private Participant shall have a period equal to the period of delay or breakdown. Also, if so stipulated in the contract, can be claimed any compensation under the terms defined in the contract. The suspension shall not exceed a period of sixty days from the notification of the decision. This period may be extended once for a period of equal length. The temporary suspension of the contract will not generate the Contracting Authority established an additional responsibility in the contract.

Art. 36.- Termination of contract. The contracts of public-private participation shall be extinguished for the following causes: a. By the expiration of the compliance period for its validity or its extensions;

b. Unilaterally and early, for material breach of private participant of the Contracting Authority in accordance with the provisions for the purpose in the contract of public-private participation, determined by final act issued in accordance with the system of dispute resolution provided in this Act;

c. By ransom provisions the Contracting Authority, for reasons of public interest, without prejudice to any indemnity payments, under the terms provided in the respective contract regulation and public-private partnerships;

d. By impossibility of performance of the contract of public-private partnership for the Private Participant as a result of measures taken by the State;

e. By promoting respect Private Participant bankruptcy proceedings or bankruptcy;

f. On the occurrence of any cause that disables the Private Participant the effective implementation of the provision;

g. By mutual agreement between the Employer and the Private Participant; and,

h. In other cases expressly provided in the contract of public-private participation.

Art. 37.- Termination for Serious breach of Private Participant. The declaration of serious breaches of the obligations of the Private Participant shall be applied for, based on any of the grounds set out in the respective contract, by the Contracting Authority at the instance of dispute settlement under the contract.

The declaration of default shall render the warranties that are set out in the Act, its regulations, the specifications and contract.

Art. 38.- Financing and special guarantee. The Private Participant may finance the development of public-private partnership projects, across modalities, instruments and financial assets recognized and regularly used in national or international financial markets. Will be able to constitute for the benefit of its creditors and to ensure obligations directly related to the development of his contract of public-private participation, a special guarantee consisting of a pledge or creation of collateral trust in respect of rights arising from the contract of participation public and private, including future cash flows generated by the project, and the shares of capital stock of the company acting as private Participant. In case of default of the Private Participant to its creditors holding such guarantees, they may run the same, out of judicial system, directly and through mechanisms that have regulatory or contractually. Alternatively, holders of these special guarantees creditors may ask the Contracting Authority to be appropriate, by this, the unilateral termination of the public-private partnership for breach of Private Participant, in order to exercise their rights in the context of the termination of that contract

Art. 39.- Situation of lenders holding special guarantees for early contract termination. Prior to the early termination of the contract for the development of a proposed public-private partnership arranged by the Contracting Authority for reasons attributable to the Private Participant, those may offer to lenders holding such special guarantees option of continuity of contract compliance in the above mentioned terms.

In such cases, the successor to the Private Participant, to be considered acceptable by the Contracting Authority must certify to this compliance, meanwhile, timely requirements required of bidders on the basis of the competitive procedure for the award of the contract public-private participation.

Art 40 -. Attribution of jurisdiction in monitoring and sanctioning. The Contracting Authority shall be the competent authority to monitor compliance with the obligations assumed by the Private Participant, and the imposition of sanctions for non-compliance that, without prejudice to the functions of regulatory agencies that have jurisdiction over the contracted service. Controls exercised by the Administration will cover the technical, operational, legal, economic, financial, and accounting issues, as provided in the rules and the contract. Management will have broad

powers of control and may use different instruments for the exercise of such functions such as reporting requirements, audits, performance evaluation, inspections, surveys, and statements

Chapter V

Dispute settlement, users claims

Art. 41.- Settlement of disputes.

For the settlement of disputes arising by reason of the interpretation, implementation, enforcement, development and / or termination of contracts of public-private participation and that cannot be resolved by negotiation between the parties, the parties may submit their disputes to arbitration of law, as they relate to issues of private law. To this end, the contract shall regulate aspects: the corresponding procedural instances, to meet the requirements at each stage, the integration of decision-making bodies where appropriate, and the effectiveness of decisions, opinions and rulings issued promptly; without prejudice to the provisions issued by regulation.

Discrepancies of technical or economic nature arising between the parties during the execution of the contract shall be subject to the consideration of a technical panel of experts in the field of dispute, at the request of either party.

Art. 42.- Users claims. Each request by a user, concerning the provision of services pursuant to a public-private partnership must be served by the Private Participant, resolving it in a reasoned manner within a period of fifteen days from of submission. The Contracting Authority shall instruct the Private Participant about the procedure and deadlines for the care, recording and response of different complaints, requests and queries submitted by users, according to the rules that includes the Regulations. In case of lack of timely or satisfactory by the Private Participant resolution, the Contracting Authority shall deal with the users to submit claims against this, must rule on those, without prejudice to the right of the user to perform the legal actions.

Art. 43.- Declaration of public utility.

Shall be declared of public utility and therefore subjected to the possibility of being expropriated by law, those goods that are necessary for the execution of the contract for public-private participation. The procedure, amount and how each of the parties concur to pay the same shall be defined in the bidding documents and the contract, notwithstanding that these provisions also provide in-law to authorize the expropriation.

Art. 44.- Easements. 1. The Participation Agreement grants the Public Private Private Participant the right to establish easements on private property ownership of the State, municipalities or individuals.

Easements shall be established by direct agreement between the Private Participant and the owner held by public deed or by court order in the case that not fix direct negotiations with the owner within sixty days from the date of the contract, in both cases must enroll in public records. In terms of predial servitudes, the laws referred to in the Civil Code apply additionally. Two. Where implementation of the works is indispensable modifying existing easements, Private Participant is obliged to execute on its own, in the manner and deadlines established in the bidding documents by the Contracting Authority.

TITLE III

TRUSTS AND TRUST ORDER FOR THE DEVELOPMENT OF PUBLIC INFRASTRUCTURE PROJECTS AND SERVICES

Art. 45.- Legal authorization and legal status. For the development of projects of public -private partnerships , agencies and State agencies may establish trusts or trust funds or participate in those constituted or established with private law . Business trust constituted for the development of projects of public -private partnerships are governed by the provisions of this law, Law No. 921/96 , " BUSINESS TRUST " , and the corresponding regulations. These trusts or trust funds have the same tax treatment under the law and its regulations . Their operations in compliance with the trust indenture in which state agencies and entities Founders are governed by rules fixed in the trust deed and the rules of private law. However, without prejudice to the supervisory powers conferred to the Central Bank of Paraguay in Law No. 921/96 , " BUSINESS TRUST " , the public trustee shall be controlled by the Comptroller General of the Republic.

Art. 46.- Assets or rights may be subject to trusts or trust funds by public trustees . The property or rights that may be held in trust by the state agencies and entities are :

a. The assets of the private domain of the State or the right of temporary use or exploitation of these assets;

b. Revenues from taxes , fees, tolls , levies, including present and future flows , provided that the proceeds of these revenues are allocated to the purposes for which they were created or established ;

c. Taxes that have a specific target including current and future flows , provided that the proceeds of these revenues are allocated to the purposes for which they were created or established ;

d. Funds from external loans or local funding obtained by the agencies and institutions of the State, provided that such funds are intended for the purposes set out in the relevant Loan Agreement;

e. Resources from donations;f. The proceeds of the bonds issued by the Treasury forming part of the Assets of the

Founders; g. The resources coming from the so-called "royalties" and "Compensation due to the

flooded territory" of Itaipu Hydroelectric Dams and Yacyretá, respectivelyas long as they are destined to the intended objectives in the legislation establishing distribution; and,

h. Any other resource that is stipulated in the Annual General Budget Law of the Nation. The public property shall be exempt trusts, unless they are disaffected. However, they may be subject to contract trust funds that will not alter the legal nature of the good.

Art. 47.- Procedures and approvals.

1. Contracts trusts or trust funds shall be signed by the competent authorities of the Contracting Authorities, with the assent of the Ministry of Finance.

2. The trustee will be selected through a process of public and competitive selection that will be established in the regulations. When the trustee is public , may be selected directly. The Development Finance Agency and the National Development Bank will act as trustees for the purposes of this Act.

3. Authorizing the Ministry of Finance to transfer other complementary sources of funding to Trusts constituted under this Act; provided that the trustee in question does not have sufficient funding to fulfill the purposes of the trust agreements. The resources for this purpose shall be provided by law established under the General Budget of the Nation.

4. Involvement of the property to be held in trust to the independent fund constituted by the Trust, will be conducted under the rules established in Law No. 921/96 "Business Trust" and the regulations issued by the Executive.

5. Resources for business trust constituting agencies and State agencies under the provisions of this Act, shall be deposited in the Trust Account, and applied only to fulfill the purposes set out in the trust made. The deposit of future revenue streams that are held in trust may be made directly to the account without having to record the income in the public budget. 6. Trusts constituted under this Act are authorized to perform emissions of securities (bonds) with fiduciary guarantees, pursuant to Law No. 921/96, "Business Trust" and its regulations and in accordance with the provisions in Article 9 of Law No. 1.284/98, Securities and regulations.

Art. 48.- Competence to handle private initiatives. The Public-Private Partnership Project Unit will be entitled to receive, educate and substantiate private initiatives for the development of projects

initiated under this Act, including within their respective spheres of competence, provided that the object is not similar to other than:

a. It has been submitted by a proponent and previous study is at the Contracting Authority;

b. the Contracting Authority was conducting preliminary studies for promotion into public initiative;

c. the Contracting Authority would have identified and provided for in their planning and with the express statement that will be promoted automatically by hand;

Projects that address financial payment or waiver of cash income of the Contracting Authorities, whose present value exceeds, in both cases, ten percent (10%) of the initial investment will not be accepted by private initiative. For the foregoing purposes, it is considered that a project is similar to another when its order is fully or partially coincident with this (geographic area, public or private property used, target and major activities), and its acceptance is incompatible or adversely affect the development of the other project.

In case of submission of initiatives of similar projects, the processing of the presented firstly must be prioritized. Projects which have been rejected under the provisions of this Chapter shall not be reintroduced, both by the applicant that the project originated by third parties as well as by the Contracting Authorities, within three years after its rejection.

Art. 49.- Process steps of private sector initiatives.

The processing of private initiatives includes the following steps:

1. Presentation: The proposer interested in developing its own initiative as part of a proposed public-private partnership, will present their project to the Public-Private Project Unit, accrediting technique, economic-financial and legal capacity to project development in question. The proponent may be individual or be composed of more than one legal entity. Its proposal should contain information relating to its identification as proposer; project which aims to develop; feasibility and prefeasibility analyzed.

2. Assessment: The information received will be reviewed by the Public-Private Participation Project Unit in coordination with the Contracting Authority, within sixty days, assess the appropriateness of their acceptance, with or without modification, or rejection; all without liability. This period may be extended. The acceptance will involve a favorable opinion, declaring the public interest initiative.

3. Feasibility Study: Declared a public interest project, with or without modification, the proponent shall prepare and submit the appropriate level of feasibility studies in

accordance with the requirements prescribed by the Project Unit Public-Private Partnership with the Contracting Authority, within this set.

4. Public audience call to interested: Public-Participation ProjectsUnit have a period of one hundred twenty days to analyze the information received and decide on the initiative or request modifications. This period may be extended under the circumstances. The analysis will be done in coordination with the Contracting Authority. If so ruling, the Contracting Authority shall submit the initiative to the Executive Branch, and if this approval proceed with the preparation of the statement, and conduct the competitive procurement process for the provisions of this Act and the regulations. In these cases, the procedure will start to award the project provided for private initiative in the same terms as it was passed without possibility of incorporating new modifications; the same except that they be accepted by the proposer.

Art. 50. Rights of the proponent. The proponent of a private enterprise shall enjoy the following rights and preferences:

a. Obtain, once the final award of the contract, the reimbursement of costs associated with the completion accepted previous studies referred to in this Act, if that does not lead contractor for the project. These costs involve studies of the feasibility phase previously approved by the contracting institution, and will be borne by the successful bidder, which should be reported in the respective public appeal.

b. Get an award at the instance of competitive bids valuation procedure, involving a bonus of 3 to 10% (3 to 10 percent) of the score obtained with the offer, depending on the size and complexity of the project on the terms that the regulation, which will be added to this to determine their final score in that instance. Likewise, the promoter of the initiative will not pay the cost of acquisition of the bases of the competitive process or related documents.

The Contracting Authority may choose to call prequalification and establish that feasibility studies are financed by all prequalified, in which case the highest award presented by the initiative shall not exceed 3% (three percent) of the score obtained with the offer. In this case, awarded each prequalified shall reimburse the payment made by the feasibility studies.

If for any reason the proponent does not perform feasibility studies within the time limits established by regulation, the Contracting Authority may be incurred by itself or hire in accordance with procurement procedures that apply, that losing any right to receive compensation or no benefit.

Art. 51. Confidentiality of private initiative. All information on private initiative submitted will remain confidential until the declaration of public interest or rejection of the respective project. The records relating to unsuccessful projects will be published on the website of the Contracting Authority. Approved by the Contracting Authority, the initiative is transferred automatically to the

same. If the call is not made, the sponsor of the initiative will keep all the rights to it for a period of three years.

TITLE V

FINAL AND TRANSITIONAL PROVISIONS

Art. 52. Contracting authorities authorizing structure, selection, award and celebrate the respective contracts, the terms of this Act, the following projects:

1. Waterways, dredging, signaling and maintenance of the navigability of the Paraguay River and other navigable rivers

2. International airports.3. Construction, rehabilitation and maintenance of roads and highways4. Construction, extension and service operation railways. 5. Construction and maintenance of national and international bridges. 6. Provision of safe water and sanitation and treatment 7. Generation, transmission, distribution and sale of electricity. 8. The road infrastructure of the capital of the Republic and its metropolitan area. 9. Social infrastructure; hospitals, health centers, schools.10. Prisons. 11. Improvement, equipment and urban development in which the contracting authorities

involved. 12. Aqueducts, pipelines, oil pipelines. 13. Production of goods and services that are themselves the subject of companies and

companies in which the State is a party. 14. Production and marketing of cement. 15. Production, refining and marketing of hydrocarbons, fuels and lubricants. 16. Telecommunications services.

The Executive Branch is expressly empowered to determine and specify in detail the terms , contents, conditions and characteristics of the specific projects to be executed .

Art 53.- Regulation. Within one hundred twenty days of the enactment of this Act , the Executive Branch will issue the Regulation of this Law , which shall be endorsed by the Ministry of Finance and the Ministry of Public Works and Communications .

Art. 54 - . Effectiveness. This act shall take effect the day after publication, and shall apply to the procurement procedures in the framework of projects initiated after that date.

Art. 55- Breach. The breach of this law by the responsible officials at the appropriate level of public administration, will be considered as poor performance of their duties and penalties under the relevant statutory provisions apply .

GIVEN IN THE CHAMBER OF THE HONORABLE SENATE OF THE NATION , THE TWENTY DAY OF SEPTEMBER TWO THOUSAND THIRTEEN .