The Cabinet Office is now consulting on the implementation of the Concession Contracts Directive and the New Utilities Directive.

The consultation documents include drafts of the Concession Contracts Regulations 2016 and the Utilities Contracts Regulations 2016. The draft Regulations state that they will come into force on 18 April 2016, the final date for implementation of the Directives.

The Concession Contracts Directive applies to the award of contracts under which the contractor receives the right to exploit the works or services rather than (or as well as) payment. A classic example is a contract for the construction and operation of a toll bridge in exchange for which the contractor receives the right to charge users and retain the tolls. The Utilities Directive applies to utilities carrying out relevant activities in the water, energy, transport and postal sectors, including the provision or operation of railways and gas networks.

The Cabinet Office has repeated the "copy-out" approach to the implementation of the Directives adopted for the Public Contracts Regulations 2015. The Cabinet Office notes that it has already consulted on generic matters which apply to all of the new Directives in the consultation which preceded the implementation of those Regulations, and so this latest consultation is of very limited scope.

Comments are invited in response to the consultation by 18 September 2015.

Points to note in relation to the draft Utilities Contracts Regulations 2016 include:

  • Unlike the current Utilities Contracts Regulations 2006, there is no list of utilities covered by the Regulations. Relevant entities will have to consider carefully whether they are covered by the definitions in the Regulations; 

  • It is made clear that entities will not be caught by the Regulations if they operate only under rights that are granted following an advertised competitive procedure applying objective criteria. Such rights will not be considered "special or exclusive" and the entity will not, therefore, be classed as a utility;

  • The current exemptions for electricity generation, the supply of electricity and gas and the exploration for and exploitation of oil and gas in England, Scotland and Wales will continue to apply.

Points to note in relation to the draft Concession Contracts Regulations 2016 include:

  • Both works and services concessions are covered, the latter will fall within the scope of regulation for the first time;
  • There is considerable flexibility around the award procedure to be followed; the copy-out approach means that no detail is added to the very high level procedural requirements in the Concession Contracts Directive;
  • The Regulations apply to contracting authorities and utilities, collectively referred to as "concession granters";
  • The remedies regime is essentially identical to that in the Public Contracts Regulations 2015.