Concession Contracts

April 7th, 2016 by James Goudie KC

On 18 April 2016 the Concession Contracts Regulations 2016, S.I. 2016/273 (“the Concessions Regulations”), come into force. They implement the 2014 Directive, 2014/23/EU, on concession contracts (“the Concessions Directive”). They extend to England and Wales, and Northern Ireland.

The Concessions Regulations impose obligations on “contracting authorities” (and utilities) concerning the award of “concession contracts”. “Contracting authorities” include local authorities. “Concession contracts” embrace both works and services concessions. They are contracts for “pecuniary interest” concluded in writing under which the consideration consists either solely in the “right to exploit” the works/services or in that right together with payment, and that meet a risk requirement.  That is that the award of the contract shall involve the transfer to the concessionaire of an “operating risk” and that the risk transferred shall involve “real exposure to the vagaries of the market”.

There is a high threshold: £4,104,394. However, below the threshold general EU Treaty principles will apply if the low threshold of a cross-border interest is applicable.

Parts 1 and 2 of the Concession Regulations set out their scope and principles. Part 3 contains rules on the award of concession contracts. Chapter 1 contains obligations relating to the publication of concession notices and concession award notices (Regulations 31 to 33), the electronic availability of concession documents (Regulation 34) and the prevention of corruption and conflicts of interest (Regulation 35). Chapter 2 of Part 3 contains provisions relating to technical and functional requirements of concession contracts (Regulation 36), the selection and qualitative assessment of candidates (Regulation 38) and award criteria (Regulation 41).

Part 4 contains rules on the performance of concession contracts, including provisions relating to subcontracting (Regulation 42), the modification and termination of concession contracts (Regulations 43 and 44) and reporting requirements (Regulation 45). Part 5 contains provisions about remedies.


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