LAW ON CONCESSION
Law “On Concession” (“Law”) became effective. The Law consolidates concessions legislation by (i) cancelling the laws “On Concessions” and “On Concession for the Construction and Operating of Autoroads”, and by (ii) excluding provisions that regulate concessions from the laws “On Specifics of Lease or Concession of Municipal Central WaterSupply, Heat Supply and Water Discharge Facilities” and “On Specifics of Lease or Concession of State-Owned Objects of the Fuel and Energy Complex”.
The Law intoduces a new procedure for the organisation and execution of the concession agreements, namely:
• the concession term will not be less than 5 years (10 years for autoroads concession)
• private partner selection may be done through the: concession tender, competitive dialog, and direct negotiations with the state property’s tenant
• separate pre-qualification stage for tender’s participants is mandatory
• external advisors must be engaged if the value of concession object exceeds UAH250 million
• concessionaire has the right to terminate the concession agreement unilaterally in case it fails to obtain rights to the land plot required for concession
• direct agreements may be executed between the concessionaire and creditors, which determine concessionaire change procedure
• the concession agreements may be subject to foreign law
• the parties have the right to independently choose the disputes resolution venue and procedure
• the grantor may compensate the concessionaire for its uncovered investments subject to parties specific agreement
We believe the Law is a positive development, which will incite and support realisation of concession projects in Ukraine.
The lawyer prepared the information Kedyk V.P.