What other innovations are provided for by the draft law on concessions

The amendments provide for the introduction of the institution of special circumstances, which existed in practice, but was not regulated by law. We are talking about the possibility of including in the text of the agreement a list of circumstances that give the concessionaire and the private partner the right to reimburse additional costs, as well as to compensate for lost income. As Anna Batueva, Managing Director for Legal Support of Projects of the National PPP Center, notes, such a tool allows the parties to distribute the risks associated with changes in the conditions under which the agreement was concluded – the direct fixing of such a tool in the law “will positively affect, among other things, the negotiating position of investors when agreeing the list of such circumstances with the public side”.

The amendments provide for the possibility of compensating the investors who initiated the project for the costs of preparing a proposal – if in the end there was no victory in the competition (compensation – at the expense of the winner). It also introduces the option of concluding concession agreements in respect of construction in progress. In addition, Lusine Harutyunyan, Head of Infrastructure and PPP Practice at Kachkin and Partners, draws attention to the fact that the bill allows for the possibility of changing the purpose of the facility. In the current version of the law on concessions, the norm is read in such a way that during the reconstruction process it is impossible to change the intended purpose – which limited the possibility of involving in concessions a sufficiently large number of objects that need to be repurposed.

For the second reading, the draft was supplemented with the possibility of providing a bank guarantee from VEB.RF to secure an application for participation in the tender, as well as regulating the status of state-owned banks – it was clarified that they do not act on the side of a private partner when financing a PPP project. This, as Lusine Harutyunyan explains, is connected with the need to eliminate the existing conflict. Now participation on the side of a private investor of “persons of public participation” is limited – despite the fact that the vast majority of financing organizations are state-owned banks.

Evgenia Kryuchkova