Russian Federal Law On concession agreements

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Earl Parks
5 years ago
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1 The State Duma Government Fund for Supporting Legislative Initiatives (FSLI) Russian Federal Law On concession s Adopted by the State Duma on July 6, 2005 Signed by RF President on July 21, 2005 Fund for Supporting Legislative Initiatives has been working since 1994 (in 2000 it was reregistered as non-commercial organization FSLI Fund) with the objective to implement and coordinate works for information, legal and organizational support of institutes of civil society and subjects of market relationships

2 Field of the law application Depths (oil, gas, timber, water resources) Infrastructure objects (Motor roads Railways Airports Metro Objects of municipal infrastructure Objects for transmitting electrical and thermal power Objects of public health, sport and culture)

3 Correlation between the law on concession s and privatization legislation Concession s Privatization Objects prohibited for privatization Objects allowed for privatization Objects of concession

4 Features of concession and its difference from other forms of s Concession Civil legal features Public legal features Standards of Civil Code of lease, contract, trusting management Standards of Law On concession s and essence of

5 Definition of concession 1 Obligations of the concessionaire to build or reconstruct the real estate object 2 Obligations of the concessionaire to carry out his activity using the object of the concession 3 Obligations of the concedent to pass to the concessionaire the right of possession and use of concession object for the prescribed period

6 Object of concession Treasury property free from the third party rights It may be a comprehensive object consisting of immovable and movable property used for common designation Property of private owners may be passed to the concessionaire under separate contract The land plot is passed on conditions of renting or sub-renting

7 Concessionaire Individual businessman Russian legal person Foreign legal person Two or more persons acting according to the contract Prohibition of the pledge of the concessionaire s rights Possibility of concedent to assume part of the concessionaire s expenses Change of persons under concession only after commissioning of the object of concession

8 Guarantees of the concessionaire s rights 1 Guarantees of rights protection, right for recovery of damages from illegal actions of state bodies 2 Guarantees of equal rights including equal rights of Russian and foreign investors 3 Guarantees under unfavorable change of legislation

9 Order of concluding the concession Tender Stage I. Preliminary selection of the tender participants Stage II. Assessment of the tender offers and choice of the winner Criteria: 1) time terms of building or reconstruction of the concession object 2) time term of achieving the required technical and economic parameters of the object 3) technical and economic parameters 4) scope of the production of goods, works, services for consumers 5) time term of achieving the prescribed scope of goods, works, services 6) amount of concession charge 7) limit prices (tariffs) for goods, works, services

10 Cancellation of concession Extrajudicial order of cancellation Cancellation of concession only by judgment

Russian Experience in Concessions and Other Forms of PPP: Prospects for Investors and Government within the New Legal Framework

Russian Experience in Concessions and Other Forms of PPP: Prospects for Investors and Government within the New Legal Framework Michael Schwartz Russian-Japanese Investment Forum 6 September 2006, Saint-Petersburg