Concession contracts—materials and resources

The following Construction practice note provides comprehensive and up to date legal information covering:

  • Concession contracts—materials and resources
  • Concessions in the UK
  • Materials and resources:
  • Build Operate Transfer (BOT) projects
  • Materials and resources:
  • PFI/PF2
  • Materials and resources
  • Other useful resources

Concession contracts—materials and resources

A concession is a form of public private partnership (PPP). It is a long term contractual arrangement between a government (or other public sector body) and a private sector operator who has been awarded the concession. See Practice Note: Forms of Public Private Partnerships.

Under a concession agreement, the government grants a private entity—the concessionaire—the exclusive right to build an asset and to operate and maintain it for the agreed term of the concession. A concession will sometimes just be for the operation and maintenance of an existing asset but is often for the building of a new asset (followed then by its operation and maintenance). Alternatively, it may involve both new and existing assets. The term of a concession will typically be 25–30 years.

Concessions effectively transfer the (often considerable) burden of constructing, or improving and maintaining, infrastructure onto the private sector and, in doing so, help to relieve some of the pressure that public sector budgets are typically under. During the term of the concession, the public sector’s role is mainly to act as a regulator and keep an eye on the performance of the concessionaire.

The concession model was first developed in France and ‘concession’ is now a well-defined legal structure in civil law jurisdictions, with a particular technical meaning. In some jurisdictions (including France), the legal framework for a concession

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