Concession Agreements

 

On 25 April 2012 the President signed Federal Law No. 38-FZ amending the Federal law “On Concession Agreements.”

Under a concession agreement an investor (concessionaire) commits to build and/or reconstruct, at his/her expense, a facility whose title is or will be with the state, Russian region or a municipality (grantor), with its further use during the term specified in the agreement.

In relation to transportation infrastructure facilities, the amendments allow a grantor to commit to reimburse expenses to the concessionaire for the (re)construction and use of transportation infrastructure facilities if so envisaged by the terms of a tender. In this case, the concessionaire will not have the right to charge the ultimate users.

The amendments allow a concession agreement to be concluded with budget-financed entities exercising the right of operating control over transportation infrastructure facilities. In this case, such entities act together with the grantor under a concession agreement.

The amendments also remove the mandatory requirement for concluding a concession agreement in accordance with the model agreement approved by the Government in relation to transportation infrastructure facilities. In addition, the amendments specify cases when a concessionaire may be replaced without holding a tender and the procedure and terms for alteration or termination of a concession agreement.

The Law entered into force on 6 May 2012.

For further information please contact Igor Ostapets or Irina Dmitrieva in the Moscow office of White & Case, tel + 7 495 787 3000 .

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