The commitments of the governmental authority. It shall contain general obligations and specific obligations of the contracting entity. This may include, for example, the establishment of a tariff valuation commission, possible public incentives, the handover of the project site and other areas in which the concessionaire/project company can expect support from the government, as well as the conditions for such support. The government`s obligations, if any, may be discussed in a separate section. In the United Kingdom, the threshold for concession contracts is £4,104,394. The more attractive and profitable a concession is, the less likely it is that a government will offer tax advantages and other incentives. Tariff, fees, taxes and collection and use. The rights of the governmental authority, the commitment of the concessionaire, the structure and amount of tariffs, exemption and discrimination, subsidy/cross-subsidy, revision of tariffs, tariff adjustment, cost of tariff revision, fees and taxes, integration of fees and tariffs with other relevant operators, appropriation, review of fees, collection and payment/transfer mechanism are included in this section. It may also include accounting standards, information on operating costs, the tariff review process and the mechanism. (Normal) The end of the contract. These include the possibility of extension, transitional provisions in the event of acquisition by a new operator, the basis for calculating compensation for assets not fully depreciated or depreciated and related matters. Increased capacity. The provision regarding the counterpart period, offer requirements, rights of the concessionaire/ private company, final payment if the concessionaire does not participate are included.
Force majeure. This section deals with events (political and apolitical), commitments of the parties, allocation of costs, compensation to the concessionaire, termination of the contract for force majeure and payments resulting from such termination. For example, there is a concession contract between the French and British governments and two private companies for the Channel Tunnel. British Channel Tunnel Group Limited and France-Manche S.A. operate the Channel Tunnel, often referred to as “Chunnel” under this agreement. The tunnel connects the two countries and allows the transport of passengers and goods between them. It is 31.5 miles long, with 23.5 miles under the English Channel. The underwater tunnel is therefore the longest in the world and an important part of the public infrastructure.
Concession contracts generally define the duration of operation and insurance requirements as well as fees. Payments to a property owner may include rent for the site, a percentage of the proceeds from the sale, or a combination of both….