In 2005, a tool appeared in Russia that allows attracting private capital to the country's economy as a result of the adoption of Law No. 115-FZ "On Concession Agreements". What it is? It is a contract in which one of the parties, acting as a concessionaire, creates or reconstructs property belonging to the other party - the concessionaire, and also operates the corresponding facility. The grantor, in turn, is obliged to provide the concessionaire with the property in possession and use for a specified period. From the article you will learn the following information about concession agreements: what it is, about the rights and obligations of the parties, about objects and other significant aspects of the contract.
Basic goals
The purpose of Law No. 115-FZ is to attract investment funds in the Russian economy, to successfully use property assets (both state and regional, as well as municipal) by concluding concession agreements and increasing the quality of goods and services, establishing appropriate rights and guarantees. The contract is signed after the tender, except as otherwise provided by law.
Parties
The parties to the agreement are the grantor and the concessionaire. The Federal Law "On Concession Agreements" provides the following definitions:
- A grant is a state represented by the Government of Russia or an authorized state, regional or municipal structure. Some rights are exercised in accordance with federal laws and other legal acts of the Russian Federation, others with regional laws, and others with municipal ones. The grantor is obliged to notify the concessionaire of the relevant structures and persons who exercise the relevant rights and obligations.
- The concessionaire is an individual entrepreneur, legal entity or association without the formation of a legal entity. The latter may function under a joint venture agreement or simple partnership.
A concession agreement is an agreement in which elements of different agreements are present, in accordance with federal laws. Therefore, they are subject to various civil laws containing elements of a concession agreement.
An object
The objects of the concession agreement include real estate in the following composition:
- Auto, railway, water, air and pipeline transport.
- Hydrotechnical and energy facilities.
- Objects of education, culture, health, sports and other social purposes.
Kinds
Consider what types of concession agreements are found in international practice:
- Construction - management - transmission. In this case, the concessionaire erects the facility, and then operates it. After that, the transfer is made to the state.
- Construction - transmission - management. At the same time, the concessionaire performs construction work and transfers the object to the state. And after that, the object is again transferred to the concessionaire for operation.
- Construction - ownership - management. The concessionaire carries out the construction, and then operates the property under the right of ownership in case the agreement does not establish a limiting period.
- Construction - ownership - management - transfer. Construction, and then use, is carried out within the established period, after which the object is transferred to state ownership.
- Purchase - construction - management. In this case, the object is sold, after which it is expanded or restored.The state takes this step if the private sector is better able to cope with the improvement of the facility.
What belongs to whom?
The property of the concessionaire is income and products that are received in the course of activities, in accordance with the concession agreement. For facilities, the concessionaire is at risk of accidental death or damage. The contract may also provide for the obligation to provide appropriate insurance.
Movable property, which was created or bought by the concessionaire upon fulfillment of the agreement, is its property, with the exception of cases provided for by the terms of the document. Real estate objects erected by the concessionaire with the consent of the concessor in the performance of the activity are not the subject of the concluded contract and belong to the concessionaire. If the real estate was built without the consent of the grantor, then it is also not an object of the agreement, is not transferred to the concessionaire, but is the property of the grantor and its value cannot be compensated. The concessor has exclusive rights to the results of intellectual activity that the concessionaire received at his own expense.
Competition
Concession agreement is concluded through a tender that is open and closed. In the first case, everyone is entitled to submit applications, while in the second case, only those to whom the relevant invitations have been sent.
A closed tender is held for an object whose data is a state secret or is of strategic importance for ensuring the defense and security of the state. Information about the open tender is posted on the Internet.
The contract is concluded in writing and is registered by the authorized body. The fee for state registration is 1 thousand rubles, and when amending the concession agreement - 20% of the amount of state duty that was paid for registration.
Fee and deadlines
When fulfilling the agreement, the concessionaire shall pay a fee, the amount of which, as well as the form, procedure and terms, are indicated in the document. The fee can be installed in the following form:
- In a solid amount. At the same time, payments are made regularly or at a time.
- In the established share of income or products that are obtained from the implementation of activities.
- Transfer of property owned by the concessionaire in favor of the concessor.
According to the Law No. 115-ФЗ "On Concession Agreements", fees can be paid in various forms.
The terms are sufficient to return the invested funds and make a profit. In world practice, this period, as a rule, is associated with the life cycle of the main assets.
Rights and obligations of the concessionaire
When executing a concession agreement in respect of objects, the concessionaire has the following rights:
- With the consent of the grantor, to transfer the object of the agreement to third parties for use within a period not exceeding that stipulated by the agreement, if the latter undertake to fulfill obligations under the concession agreement.
- Fulfill the agreement on their own or with the involvement of other persons.
- To use exclusive rights to the results of intellectual activity free of charge, in accordance with the terms of the contract.
In addition to rights, the Law "On Concession Agreements" entrusts the concessionaire with a number of duties, in particular:
- To form and reconstruct the object of the agreement, as well as use it.
- Operate the relevant facility in the manner prescribed by the agreement.
- Carry out activities without terminating it without the consent of the grantor.
- To enable consumers to receive certain goods and services.
- Provide them with benefits that are established by law.
- Keep the object of the agreement in good condition, if necessary, carry out ongoing and overhaul.
Guarantees to the concessionaire
When working with the objects of the concession agreement, the concessionaire receives guarantees that his rights and interests will be protected. In case of illegal actions of state bodies, regional or local structures, he is entitled to receive compensation for losses incurred.
Concessionaires, including foreign legal entities, have equal rights under the law. The established legal regime excludes any discrimination and other measures that impede the free management of investments. If during the term of the agreement norms are introduced that worsen the position of the concessionaire so much that he loses what he could count on when signing the agreement, the parties amend the provisions of the document to ensure that the interests of the concessionaire are respected.
According to the Federal Law "On Concession Agreements", the government approves standard forms for objects that are named therein.
Termination
The concession agreement is terminated in the following cases:
- After the expiration of the parties.
- By agreement.
- In case of early termination of the contract.
After that, the concessionaire transfers the object to the grantor. The object must have a suitable condition for activity, not be encumbered with the rights of three persons.
Benefits
The conclusion of a concession agreement is beneficial to both the concessionaire and the concessionaire. Among the most significant moments of the document are the following:
- The agreement eliminates the financial burden of the state, as the concessionaire takes care of all expenses related to the management, maintenance and repair of the facilities.
- Legal relationships are long-term, tough, stable and structured.
- The agreement allows attracting private investment without losing strategic control over the most important objects.
Based on this, we can conclude the following interest of the state:
- Shifting costs to private investors in order to increase the efficiency of the facility.
- Filling the budget as a result of receiving preferential payments.
- Solving social and economic problems.
Private investors, in turn, receive:
- Long-term government assets.
- A reliable investment, thanks to guarantees from the state.
- In some cases (for example, with a concession agreement for heat supply), the state continues to pay an additional fee if the quality of service improves.
- A concessionaire can become larger as a result of increased productivity as well as increased profit.
Concession and rent
The difference between a concession agreement and a lease is that in the first case, the subject can be, for example, forest land without infrastructure. Therefore, considerable investment will be required to carry out the established activities. Among other responsibilities, the investor is required to create infrastructure. However, not all timber is owned by the concessionaire. A certain part remains in the ownership of the Russian Federation.
In addition, according to the Federal Law "On Concession Agreements," use is granted for a maximum of 49 years free of charge. The decision on this is made by state bodies of the subject of the Russian Federation.
Concession and Franchising
Having dealt with that, concession agreements - what is it, it is easy to identify similarities with franchising. In essence, concession is sometimes called the prototype of franchising. It is the latter treaty that is currently the most popular in advanced economies (especially in the USA and England).
In Russia, one of the first franchises is the production of Pepsi-Cola. If in 2002 there were only a few dozen such companies, then by 2007 there were already more than 600. However, since there is no necessary legal framework, franchising is not developing much in our country.
Conclusion
We learned from the article how important concession agreements are in the country's economy.What it is? Concession is a tool by which the state can replenish the budget and improve the condition of facilities, on the one hand, and also a reliable object for private sector investment, on the other hand.
