What Do You Mean by Concession Agreement

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Reading the article, I wondered why a company would do such a thing. However, I can understand why a government would make concessions if it really had to do business with the other side. Example 1: Armenia – Concession contract for the transfer of the Armenian railway system to the « South Caucasus Railway » Closed joint-stock company Creation of « Russian Railways » Closed open joint-stock company – Concession contract between the Republic of Armenia (« Concedent »), the South Caucasus Railway (« Concessionaire ») and the Russian Railway (« Guarantor ») for the modernization and operation of the Armenian Railway. The concession contract stipulates that the concessionaire must grant access to the railway network to other operators in accordance with the laws of Armenia. A concession of land or property by a government may be a lease for specific purposes in exchange for services or a specific use, a right to take over and profit from a particular activity. A concession may include the right to use certain existing infrastructure necessary for the conduct of a business (e.g. B a water supply system in a city); In some cases, such as mining. B, it may only be the transfer of exclusive or non-exclusive easements. The more attractive and profitable a concession is, the less likely a government is to offer tax breaks and other incentives.

@starrynight – I agree, the term concession contract makes me a concession company. Although the term also has a lot of meaning in the other direction. One party makes concessions to the other party so that it can do business together. On a smaller scale, vendors work under concession contracts awarded by local governments, businesses or other owners. This activity may include restaurants and retail stores at major airports, vendors at state fairs, or selling food and beverages from booths in state parks. In the private sector, the owner of a concession – the concessionaire – usually pays either a fixed amount or a percentage of the income to the owner of the company from which he operates. [2] Examples of concessions within another company include concessions in sports venues and cinemas, as well as concessions in department stores operated by other retailers. Short-term concessions can be granted as advertising space for periods of a single day. A concession or concession contract is the granting of rights, land or property by a government, local authority, company, natural or legal person.

[1] Example 7: Sub-Saharan Africa: Ifrikya Railway Concession – a case study by Karim-Jacques Budin, SSATP Working Paper No. 64, World Bank, 2003 (English and French) – The case study contains a model railway concession contract (section 3) designed for a sub-Saharan African state. That model contract provides that the use of the railway infrastructure operated by the concessionaire may be open to other railway undertakings in the circumstances referred to in Article 6 of the concession contract. Use by third parties is based on access agreements to specific lanes between the concessionaire and the operator concerned, for which an infrastructure charge is charged. It therefore appears that a concession contract is probably most often used when one party is disadvantaged and the other party then has more bargaining power. Example 3: Uk rail link – Channel Tunnel (High Speed 1) – Concession agreement between the Secretary of State for Transport and High Speed 1 Limited (SH 1 Limited). The agreement covers the design, construction, financing, operation, repair and maintenance of the high-speed line from St Pancras station in London to the Channel Tunnel, which is connected to the international high-speed lines between London and Paris and London and Brussels. The legislation of the European Union and the Member States requires access to the runways by third parties. According to the law on a sector, the concession may either allow the authority to retain or retain ownership of the assets, or hand it over to the concessionaire and return the ownership to an authority at the end of the term of its concession, or the authority and the concessionaire own the facilities. Within the European Union, the award of concessions by public authorities is subject to regulation.

Works concessions have been subject to procurement rules for some time, as Directive 2004/18/EC of the European Parliament and of the European Council on public procurement applies to works concessions and the award of service concessions of cross-border interest is subject to the principles of the Treaty on the Functioning of the European Union. However, the European Parliament and the European Council adopted a resolution on 26 September. In February 2014, a new Directive 2014/23/EU on the award of concession contracts[4] was adopted, requiring EU Member States to introduce national legislation on the award of concession contracts for EUR 5 186 000 awarded from 18 April 2016. The concession should not be confused as part of a concession contract and a lease agreement. A « lease » is an interest in a property, while a « grant » is a license to operate the property, but has no inherent ownership rights. Concession contracts are sometimes used to take advantage of other nations. For example, foreign countries and companies forced China to make various concessions in the 19th and early 20th centuries. These concessions have given foreign companies the right to develop and operate railways and ports in China. In addition, citizens of other countries often enjoyed extraterritoriality as part of their concessions.

Extraterritoriality meant that foreign laws and courts settled legal disputes between Chinese and foreigners in concessions. Of course, the decisions of these courts tended to be directed against Chinese companies and consumers. In 2015, a committee chaired by Mr. Vijay Kelkar was set up to revive the PPP infrastructure model. In its report, the Committee recommended the development of a review and renegotiation mechanism to make concession agreements more flexible. Example 8: Review of Selected Railway Concessions in Sub-Saharan Africa – World Bank Report, 2006 – Annex C of the report contains a comparative review of contractual clauses relating to third party access to tracks for various concession/charter agreements (Camrail (Cameroon), Sitarail (Côte d`Ivoire – Burkina Faso), Madarail (Madagascar) and Transrail (Senegal and Mali)). Concession contracts are also popular with retail companies, with these companies using the other party`s facility or place of business under certain conditions. Retailers can also enter into a concession agreement with local authorities that gives them the right to sell their products in federal parks, amusement parks, and other government-owned open spaces. The terms of a concession contract may include the payment of royalties, the percentage of revenue generated, or liability for the cost of maintaining the facility. Governments can use these types of concession contracts to provide services they cannot or do not want to provide. For example, a concession contract could be signed with a foreign company so that it can manage ports or borders. I know that when I think of a concession contract, I certainly think of the legal agreement between a company and a place where the company can provide food.

Or maybe I`m just a little hungry right now. Complex Private Finance Initiative (PLT) projects may include a concession contract that gives private contractors the right to use certain assets. However, when transferring these rights, the government or judicial authority may set certain expectations regarding the level of maintenance and investments made, as well as the operating standards to be met. A concession contract is an agreement between a government agency and a private entity whereby the government grants certain rights to the private entity for a limited period of time. These agreements are common in the development of infrastructure projects under the public-private partnership (PPP) model. In this context, the concession contract is an agreement by which the government grants a private entity rights to carry out an infrastructure project. At best, concession contracts are a form of outsourcing that allows all parties to enjoy comparative advantages. Often, a country or company has resources that lack the knowledge or capital to use them effectively. By outsourcing the development or exploitation of these resources to others, it is possible to earn more than they could on their own. For example, a country may lack the capital and technical skills to use offshore oil reserves. A concession contract with a multinational oil company can create revenue and jobs for that country. With respect to an operating concession, the agreement gives the Company the exclusive right to work on a site such as a sports stadium, cruise ship or government building.

In this case, the company operates a concession that can sell food, accessories and a variety of other products. He must pay an annual fee for the right of exploitation or give a percentage of his income to the place. .