Concept of Concession and Legal Regulation

Saulius Urbonavičius

Abstract


Concession is one of the oldest and widely used forms of public-private partnership within the EU and the rest of the world in different areas such as public health, public safety, transport and others. Despite this fact, there still exists no single and clear definition of the term ‘concession’. When one talks about concession in Lithuania, it is important to remember that for a long time it has been terra incognita for the majority of the society. Because of imperfect regulation it was hard to implement concession in daily life. With the introduction of the new Law on Concession in 2003, a clear regulation of this sphere was established and a clear definition of a concession agreement was provided, what cannot be said about the regulation of concession on the EU level. This article deals with the term of concession agreement and defines the criteria for distinguishing concession from public work or service contracts. The concept of concession agreement has many definitions in different countries and international organizations; however, they all appear to be related to the same issues. Under a concession agreement, a concessionaire gets the right from a public entity to operate a defined infrastructure service (e.g. electric power, toll roads, etc.) for a long period of time and receive revenues deriving from it. Concession is operated through a variety of structures such as turnkey procurement, Build-Operate-Transfer (BOT), Build-Own-Operate (BOO), Build-Rent-Operate-Transfer (BROT), Build-Own-Operate-Transfer (BOOT), Design-Build-Finance-Operate (DBFO), etc. However, they share the main criteria for defining concession—long term period, different responsibilities, advanced risk allocation, functional specifications.

Keywords


concession; public-private partnership; public agreement; public work concession; public service concession

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"Societal studies" ISSN online 2029-2244 / ISSN print 2029-2236