Svitlana Teush, head of the real estate, construction, infrastructure and renewable energy practices at Redcliffe Partners, contributed an article titled “Long Way to Concessions, or Twenty Years After” to “Commercial Property” magazine (194, October 2019). The article provides an overview of the new law on concessions and the novelties following its adoption, including the improved balance of responsibilities between the concession grantor and the concessionaire; the streamlined, and more structured, tender procedure; the forms of the state support available to concessionaires; the possibility of opting for the foreign governing law, as well as entering into direct agreements with lenders and pledging concessionaire’s property rights, aiming to facilitate project financing of concessions. The law aligns, in particular, different regulations governing public-private partnership and concessions.
The ongoing pilot seaport concession tenders Olvia and Kherson were also examined, which would set a marker for other concession tenders to follow in the seaport, railway and airport infrastructure sectors as well as others, and help raise and increase investment in state and municipal facilities without transferring ownership to private investors.
The new law on concessions marks a significant step towards improving their legal framework. However, further changes will be needed, including facilitating land use and environmental impact assessment procedures, and development of the mechanism of compensations and safeguards for concessionaires, as well as streamlining the tender procedure and supporting practices. The general country framework elements were also addressed, including how the country risks are managed, how consistently investors’ rights are observed, and whether such protections sustain through the rapid regulatory changes.
Please follow the link to read the full article in English.