On 9 June 2016, a draft Concession Bill (the “Bill”), was submitted to the Bulgarian Parliament. The Bill shall replace current legislation on concessions and Public-Private Partnerships (PPP) and shall improve the conditions for using the concessions as a form of PPP.
Once the Bill has entered into force, it shall implement the provisions of Directive 2014/23/EU (the “Concessions Directive”). All Member States should have implemented the Concessions Directive by 18 April 2016. Bulgaria has failed to fulfill this obligation within the prescribed time limit. Nevertheless, prior to the implementation of the Concessions Directive, individuals could still rely before Bulgarian courts upon certain provisions of the aforementioned directive in order to seek protection, against State authorities. Among the main goals of the Bill is the enhancement of the use of concessions for public works contracts with subsequent provision and management of services of general interest.
The Bill regulates both works and services concessions, as covered by the Concessions Directive, and preserves the Bulgarian specific option of granting concessions for the (sole) use of state or municipality owned properties.
With regard to works concessions, beyond the compulsory assumption of economic risk by the concession holder, the draft legislation provides that concession holders shall further assume construction risk.
Another new improvement will result in more flexibility for the contracting authorities to use negotiations in the procurement procedure. This improvement is expected to increase cross-border trade. With the Bill, along with the open procedure, contracting authorities shall have the option of awarding concessions with a cross-border dimension, based on competitive dialogue or a competitive procedure with negotiation.
The current draft does not provide for a maximum duration of the concession period, which is a major change compared to current legislation. However, all works and services concessions whose duration might exceed fifty (50) years would require parliament’s preliminary approval. In addition, with regard to works and services concessions for municipality-owned properties, a qualified majority (2/3) of the votes of the municipal council would need to be reached.
In light of the government’s intention to increase the use of concessions, the Bill provides for the adoption (i) of a National Strategy for the Development of Concessions that would set the aims and priorities for the awarding of concessions contracts and (ii) of an Action Plan with regard to concessions for state-owned properties.