Legal News | KPMG | BG
close
Share with your friends

Legal News: A New Concessions Act enters into force on 1 January 2018

Legal News

A new Concessions Act was promulgated in the State Gazette, issue 96, dated 1 December 2017, which will enter into force as of 1 January 2018. The rules regulating the National Concessions Register will enter into force as of 31 January 2019.

1000

Related content

The new act repeals the currently effective Concessions Act and the Public Private Partnership Act and transposes Directive 2014/23/EU of the European Parliament and of the Council of 26 February 2014 on the award of concession contracts.

The concessions for extraction of underground resources will continue to be awarded entirely pursuant to the Underground Resources Act, while the terms for the award of mineral water extraction concessions will be set out in an ordinance to be adopted by the Council of Ministers on the grounds of the Waters Act. 

Due to the exhaustive regulation of the concessions rules by the Act, no rules for the implementation of the latter will be adopted. However, two ordinances are expected to be adopted by the Council of Minsters not later than 30 June 2018 – one on the financial and economic elements of concessions and another one on the terms for implementation of monitoring, management and control.

The Act retains a part of the currently effective rules on the award, appeal and implementation of concessions but also introduces a number of significant changes, some of which are listed below: 

  • The functions of a contracting authority for the state concessions, respectively for the municipal concessions, will be performed directly by the competent ministers and mayors of municipalities, while the current contracting authorities – the Council of Ministers and the municipal councils will approve the main acts for the award and implementation of concessions; 
  • In addition to the works and service concessions, a “concession for use” has been introduced, under which the concessionaire will be entitled to perform economic activities with public state or municipal property against remuneration without execution of works or provision or management of a service; 
  • A Coordination Council on Concessions will be established and it will be entitled to assign the Privatization and Post-Privatization Control Agency with the execution of independent control over the implementation of certain concession contracts; 
  • Regardless of the suggested and widely discussed longer maximum term of concessions, the current maximum term of 35 years will continue to be applied for the works and service concessions. A maximum term of 25 years is introduced for the concessions for use; 
  • In concessions of transnational interest, i.e. the works and service concessions having a value exceeding the threshold set out in the applicable regulation of the European Commission, the concessionaire may be selected through one of the following three procedures – open procedure, competitive procedure with negotiation and competitive dialogue depending on the practical complexity of the concession. The only currently applicable selection procedure is the open procedure which does not allow for negotiations and dialogue. In concessions without transnational interest, including works and service concessions below the European threshold and the concessions for use, the concessionaires will continue to be selected only through the open procedure; 
  • More detailed rules on subcontrators and subcontracting agreements are introduced, as well as an obligation for the concessionaires to provide information to the contracting authorities on the concluded subcontracting agreements; 
  • More detailed rules on subcontrators and subcontracting agreements are introduced, as well as an obligation for the concessionaires to provide information to the contracting authorities on the concluded subcontracting agreements; 

The act also introduces amendments to a number of other acts such as the Waters Act, the Civil Aviation Act, the State Ownership Act, the Municipal Ownership Act, the Underground Resources Act and others. 

<p>© 2018 KPMG Bulgaria OOD, a Bulgarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.</p> <p>KPMG International Cooperative (“KPMG International”) is a Swiss entity. &nbsp;Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.</p>

Connect with us

 

Request for proposal

 

Submit