Experts of the CCI of Russia on the amendments to the Federal Law “On concession agreements”

The joint meeting of the Committee on PPP of the CCI of Russia and the Committee on Investment Policy of the CCI of Russia on the subject “The practice of application of concession agreements in the territory of the Russian Federation. Perspectives of changes to the concession legislation” was held in Moscow at the Chamber of Industry and Commerce on February 20 of 2014.

The meeting was attended by the employees of the Administration of the President of the Russian Federation, of the profile ministries (the Ministry of Transport of Russia and the Ministry of Economic Development of Russia) as well as by representatives of private investors, consulting structures and leading law firms specializing in the implementation of projects in the sphere of public-private partnership.

Partner, Advocate, Doctor-at-Law Anna Kotova-Smolenskaya and Associate Dmitry Zhubrin represented the Law Firm "YUST".

The experts discussed, in the course of the meeting, the results of the study “The practice of application of concession agreements in the territory of the Russian Federation” done by the PPP Development Center jointly with the PPP Committee of the CCI of Russia as well as the draft of the amendments to the Federal Law No. 115-FZ “On concession agreements” dated 21.07.2005, prepared by the Government of the Russian Federation.

The participants of the meeting stressed the importance of the work done of studying and summarizing of the materials on the practice of application of concession agreements in Russia.

The draft law on amendments to the FL “On concession agreements” was positively evaluated both by the State and by the representatives of the private sector and the profile specialists. The changes that have been suggested are overdue, and the purpose of their adoption is the enlargement of the sphere of application of concession agreements and creation of favorable conditions for attraction of private investments.

The amendments stipulate additional guarantees for the concessioner, the possibility to execute a concession agreement on the initiative of a private investor, the possibility to replace the concessioner without tender, as well as a number of other changes that are just as important.

Though the most responses were positive, some criticism concerning certain provisions of the draft law was also expressed.

For example, the experts in particular voiced their doubts regarding the reasonability of the draft law provision prohibiting the concessioner to sell the manufactured goods, works, and services in the course of the activity under the concession agreement, if such agreement contains the grantor payment provision. According to the specialists, said limitation creates unmotivated obstacles for the concessioner’s receipt of additional profits from the use of the concession agreement object.

Anna Kotova-Smolenskaya in her speech also suggested provision of the parties to concession agreements with more opportunities to choose the exact method of consideration of the disputes concerning the concession agreements. This suggestion is due to the fact that the Federal Law “On concession agreements” allows consideration of disputes only by state courts or private arbitration courts of the Russian Federation but does not enable the possibility for the disputes to be considered by international private arbitration courts located outside of Russia, which discourages the foreign investors from participation in said projects.

Besides, it was suggested to write the procedure of consideration of the concessioner’s demands to change the material conditions of the concession agreement by the grantor in more detail. The experts also paid attention to the need to improve the procedure of execution of the concession agreement on the initiative of a private investor.

The commentaries concerning the draft law will be prepared as a conclusion of the meeting by the Chamber of Commerce and Industry of Russia, with consideration of the remarks and suggestions made by the experts.

See here the text of the draft law No. 449127-6.