There are changes to the laws governing concessions that will be in force from 1 September 2012.

The key changes are:

  • limiting the types of entities that are eligible to be concessionaires to equity companies (limited liability companies, joint-stock companies and partnerships limited by shares). Other entities, such as general partnerships, limited partnerships, co-operations and sole-traders, will be ineligible and would therefore have to form an equity company to which the concession agreement could be awarded;
  • enabling a public-private company, established under the Public-Private Partnership Act, to be a concessionaire;
  • allowing third party resources to be relied on by applicant concessionaires to satisfy the financial and technical capacity criteria, supported by evidence that the third party's resources will be available throughout the concession period. This is currently only permitted at the discretion of the public authority;
  • allowing the concession period to be reduced or extended by up to one third of the original concession period. Currently, concession periods may be extended (but not reduced) to a maximum period of 35 years in total;
  • allowing concession agreements which have been breached to be amended in order to restore the “financial equilibrium” (ie the balance between profit and risk). This will only be possible in ‘force majeure’ type of situations;
  • requiring the annual financial statements of the concessionaire to be audited by a registered auditor;
  • expressly stating that the relevant civil court is the proper forum for determining all disputes about execution, implementation and termination of concession agreements;
  • specifying the permitted level of damages that either party can claim in cases of default.

Law: Concessions Act (as amended); Public-Private Partnership Act (published in State Gazette issue 46/ 15.06.2012) amending the Concessions Act