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“The Ministry of Economy proposed to give the regions the right to concessions with investors without competition”
Denis Kachkin, Managing Partner, Head of the Infrastructure and PPP Practice of Kachkin & Partners, comments on the material on new amendments to the legislation proposed by the Ministry of Economic Development.
The Ministry of Economy proposed to give the regions the right to conclude concessions with investors on state property without tender until the end of 2022. According to experts, the implementation of investment projects will accelerate, but there are risks for competition.
The Ministry of Economic Development has prepared bills that give the regions the right to enter into concessions with investors without a tender and change the terms of existing agreements concluded before March 1, 2022, without the consent of the antimonopoly authority, told RBC who has read the documents.
The easements were designed «in order to ensure the Russian economy development in the face of external sanctions pressure.» The need to speed up the amending concession agreement procedure is dictated by building materials prices rising, so the measure will be valid until the end of 2022, Ilya Torosov, First Deputy Minister of Economic Development, explained to the publication.
The rule that allows regions to conclude concession agreements without competition will have an exception — it will not apply to agreements relating to heat supply facilities, centralized water supply and sanitation systems, transport infrastructure facilities and technically related public transport facilities.
The right to amend concession agreement terms without the antimonopoly authority approval is also subject to exceptions — it does not apply to agreements the subject of which are housing and communal services, waste processing facilities and should not lead to the facility purpose change, a decrease in investment and an increase in prices for manufactured goods or services.
The conclusion of concession agreements without a tender will reduce the time for launching projects, says Andrey Mironov, senior lawyer at the National PPP Center (profile ANO). He recalled that today the agreement conclusion, even in the absence of competitors, requires at least 45-60 days, «the possibility of concluding agreements without a tender will save this time.»
Denis Kachkin, Managing Partner, Head of the Infrastructure and PPP Practice at Kachkin & Partners, warned about the risks of the competitive background worsening as the practice of selecting concessionaires without tender is expanded, noting that “such a liberal approach may give rise to distortions in its use.” The “club” of the FAS, which dominates regional and municipal concessions, disciplines the market very much,” he said.
Andrey Zlobin
Managing Partner
Head of Infrastructure and PPP Practice
Head of Joint Department at HSE University in Saint Petersburg
Attorney