Example 1: Armenia – Concession contract for the transfer of the Armenian railway system to the “South Caucasus Railway” Closed joint-stock company Creation of “Russian Railways” Closed open joint-stock company – Concession contract between the Republic of Armenia (“Concedent”), the South Caucasus Railway (“Concessionaire”) and the Russian Railway (“Guarantor”) for the modernization and operation of the Armenian Railway. The concession contract stipulates that the concessionaire must grant access to the railway network to other operators in accordance with the laws of Armenia. It gives the concessionaire the right to claim damages if the authority delays in obtaining performance or waives the condition precedent within the time limit or even occurs in the event of the occurrence of a case of force majeure. Concession (or franchise) agreements may also be relevant to the broader issue of “access to tracks” if they require the concessionaire to grant access to other operators against payment of an access fee. A concession or concession contract is the granting of rights, land or property by a government, local authority, company, natural or legal person. [1] From a legal, financial and technological perspective, an acquirer or investor of a dealer typically performs an overall due diligence. However, it is recommended to analyze the following documents and information as part of due diligence, as they often have a direct impact on the valuation of the concessionaire or on the transaction itself: Example 4: Argentina – Contrato de Concesión Ferroviaria (430/94) and Addenda (167/01), Grupo de Servicio 6, Línea Belgrano Norte (Spanish) – Concession contract between the Argentine State and a private entity (Ferrovias Sociedad Anonimas Concessionarios) on the Belgrano Norte railway (from Villa Rosa to Retira – Buenos Aires Metropolian Area) with addendum. The concession concerns a railway line for public passenger transport (concesión de servicio público). The concessionaire shall be granted the right to use all transferred assets, including rolling stock. The concessionaire is obliged to operate the railway system, maintain the railway infrastructure and make the investments specified in the concession contract. Ownership of the assets remains the property of the granting authority. Assets are returned to the concession authority at the end of the concession period, including assets acquired by the dealer (exceptions apply to vehicles).
The duration of the contract is 24 years (renewable). The concessionaire shall be obliged to grant access to the tracks to the railway undertakings or other concessionaires referred to in the contract on the basis of track access agreements in return for track access charges. Track access conditions and infrastructure charges must be fair and reasonable (Article 6.3 of the concession contract). Details can be found in the annexes to the Treaty (not yet published). Example 7: Sub-Saharan Africa: Ifrikya Railway Concession – Case Study by Karim-Jacques Budin, SSATP Working Paper No. 64, World Bank, 2003 (English and French) – The case study contains an example of a railway concession contract (Section 3) designed for a sub-Saharan African State. That model contract provides that the use of the railway infrastructure operated by the concessionaire may be open to other railway undertakings in the circumstances referred to in Article 6 of the concession contract. Use by third parties is based on access agreements to specific lanes between the concessionaire and the operator concerned, for which an infrastructure charge is charged. Concession contracts are sometimes used to take advantage of other nations.
For example, foreign countries and companies forced China to make various concessions in the 19th and early 20th centuries. These concessions have given foreign companies the right to develop and operate railways and ports in China. In addition, citizens of other countries often enjoyed extraterritoriality as part of their concessions. Extraterritoriality meant that foreign laws and courts settled legal disputes between Chinese and foreigners in concessions. Of course, the decisions of these courts tended to be directed against Chinese companies and consumers. Concession contracts differ from the typical supply of commercial goods and service contracts in various aspects, such as: according to what the sectoral law says, the concession may allow the authority to retain or retain ownership of the assets by transferring to the concessionaire and returning ownership to an authority at the end of the term of its concession. or the authority and the concessionaire own the facilities. It contains the commitments, insurances and warrants to be signed by the parties before the conclusion of a concession contract. It includes the declaration of the financial capacity or authority of the parties to perform the contract and to fulfil the obligations set out therein. This clause establishes the authority`s power to grant the concessionaire the exclusive right to license, operate, maintain and provide services to the concessionaire during the concession period. Within the European Union, the award of concessions by public authorities is subject to regulation.
Works concessions have been subject to procurement rules for some time, as Directive 2004/18/EC of the European Parliament and of the European Council on public procurement applies to works concessions and the award of service concessions of cross-border interest is subject to the principles of the Treaty on the Functioning of the European Union. However, on 26 February 2014, the European Parliament and the European Council adopted a new Directive 2014/23/EU on the award of concessions[4], which obliged EU Member States to adopt national legislation for the award of concession contracts amounting to EUR 5 186 000 awarded from 18 April 2016. Example 6: Peru – Contrato de Concesión de los Ferrocarriles del Sur Sur Oriente (Spanish) – Concession contract between the Peruvian State and a private entity (Ferrocaril Transandino S.A.) which operates the concession for the southern (Matarani/Mollendo to Cusco) and south-eastern (Cusco to Machu Pichu) railway lines. The duration of the concession is 30 years (renewable). The concessionary authority shall grant the concessionaire the right to use fixed assets and rolling stock for passenger and freight transport services. The main tasks of the concessionaire include the modernisation and rehabilitation of railway infrastructure (including signalling and telecommunications systems), the repair of rolling stock and the improvement of operational performance. The concessionaire shall be required to grant free access to other railway undertakings on a non-discriminatory basis and against payment of an infrastructure charge. Lane access fees must be approved by the regulatory body. More information on the track access agreement developed for this rail network can be found on this website. Subject to and in accordance with the terms of this Agreement, the Licensee shall, at its own expense and expense, assume the expansion, operation and maintenance of the District Hospital and shall observe, fulfill, fulfill and perform all of its obligations set forth in or arising out of this Agreement with respect to the District Hospital. The general obligations of the concessionaire are as follows: a concession of land or property by a government may be a lease for specific purposes in exchange for services or a specific use, a right to take over and profit from a particular activity. A concession may include the right to use the existing infrastructure necessary for the conduct of a business (e.g.
B a water supply system in a city); in some cases, such as mining. B, it may only be the transfer of exclusive or non-exclusive easements. A build operate transfer (BOT) project is typically used to develop a discrete asset rather than an entire network, and is usually completely new or new (although a renovation may be required). In a BOT project, the company or project operator typically receives its revenue through a fee charged to the utility/government, rather than through rates charged to consumers. In common law countries, a number of projects are called concessions, such as.B. Toll road projects that are under construction and have a number of similarities to BOT. Concessions, build-operate-transfer (BOT) projects and design-build-operate (BOD) projects are types of results-oriented public-private partnerships. BOT and BOD projects typically involve significant design and construction, as well as long-term operation for new construction (greenfield) or projects requiring significant redevelopment and expansion (brownfields). Below are definitions of each type of agreement, as well as the main features and examples for each agreement. .