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Difference Between Concession And Agreement

These agreements can be concluded either for the purpose of carrying out an infrastructure project or to provide services related to an infrastructure project. Within the European Union, the granting of concessions by public bodies is governed by a regulation. Work concessions have been subject to public procurement rules for some time, as the European Parliament and European Council`s 2004/18/EC Directive on Public Works Concession Contracts is applied and cross-border concessions on services are governed by the principles of the Treaty on the Functioning of the European Union. However, on February 26, 2014, the European Parliament and the European Council have adopted a new 2014/23/EU directive on the awarding of concession contracts[4], which required EU Member States to implement national legislation for the awarding of concession contracts of more than EUR 5,186,000, which was awarded on or after 18 April 2016. Public services such as water supply can be operated in concessions. In the case of a public service concession, a private company enters into an agreement with the government on the exclusive right to invest, maintain and carry out activities in a public utility (for example. B a privatization of water) for a number of years. Other forms of contracts between public and private bodies, namely the lease and the management contract (in the water sector, often referred to as farming), are closely linked, but differ from a concession with respect to the operator`s rights and remuneration. A lease gives a company the right to operate and maintain a public service, but investments remain the responsibility of the public. Under a management contract, the operator collects the revenue only on behalf of the government and in turn receives an agreed fee. Under the terms of the sector`s right, the concession can either authorize the authority to retain or retain ownership of the assets, or by passing them on to the concessionaire and returning the property to an authority at the end of the concession, or the authority and the dealer who owns it.

A concession agreement is an agreement between a government authority and a private body whereby the government grants certain rights to the private body for a limited period of time. These agreements are common for the development of infrastructure projects under the Public-Private Partnership (PPP) model. In this context, the concession agreement is an agreement by which the government grants rights to a private entity for the completion of an infrastructure project. Model concession agreements (MCAs) have played an important role in decouping the complexity of these transactions. Using a standardized form for concession agreements reduces unnecessary delays and transaction costs. It also simplifies the bidding process and inspires the confidence of bidders and financiers who invest in infrastructure development. In addition, compliance with WAB standards reduces the costs and risks of small governments and private parties carrying out small projects at the local level, as in most cases they do not have the same expertise as the agencies and forums that develop THE ETCs. Governments normally choose from many contracts to delegate oil and gas exploration and development. The form of the contract changes between and within countries, but the most common contracts are concession contracts and production sharing agreements (EPI). A rental agreement is a property award of a specific description of the land or other property against a specific price and payment agreement.

On the contrary, the concession under a concession agreement is a licence for the use of the property for a specific purpose, once the objective is achieved, all those rights must be returned to the grantor. In this process, the right to manage and control the property is maintained by the owner. However, the implementation of MDBs also has several drawbacks.