The Ministry of Economy proposed to give the regions the right to concessions without competition

The Ministry of Economy proposed to give the regions the right to conclude concessions with investors on state property without a tender until the end of 2022. Implementation of projects will accelerate, but there are risks for competition,

The Ministry of Economic Development has prepared new anti-sanction concessions to the legislation aimed at maintaining the investment attractiveness of the regions. The government will be empowered to establish cases of concluding concession agreements between regions and investors without a tender. In addition, parties to existing agreements concluded before March 1, 2022 will be able to change their terms without the consent of the antimonopoly authority. The relevant bills, developed by the Ministry of Economic Development, are scheduled for consideration at the next meeting of the government commission on legislative activities, which will be held in the near future. RBC got acquainted with the contents of the documents, their authenticity was confirmed by a federal official.

Both proposed relaxations will only last until the end of 2022. They were developed "in order to ensure the development of the Russian economy in the face of external sanctions pressure," the accompanying materials explain.

“The initiative will speed up the procedure for amending the concession agreement and reduce the risks of suspending the implementation of concession agreements. The need for these measures is dictated by the rising prices of building materials, so this measure will be valid until the end of 2022. It is aimed at reducing the administrative burden if it is necessary to quickly change the terms of the concession agreement, ”Ilya Torosov, First Deputy Minister of Economic Development, told RBC.

Concession agreements are used to attract private investment in the construction, renovation of public property or the provision of services normally provided by the state. The state (grantor) gets effective management of the facility, and the investor (concessionaire) gets the opportunity to earn money from its operation. As a rule, such contracts are concluded for a long period. Examples of a concession are Sheremetyevo Airport (the investor is compensated for the construction of terminals and airfield facilities through fees from airlines), the Platon heavy truck toll system, and a number of toll roads.

According to the Law "On Concession Agreements", the concessionaire is selected on a competitive basis. The organizer of the auction is a public entity - the Russian Federation, a region or a municipality - depending on who owns or will own the infrastructure facility.

Exceptions to amendments

There are exceptions in the draft law, which provides for the right for regions to conclude concession agreements without competition. Thus, the norm will not apply to agreements that relate to heat supply facilities, centralized hot water supply systems, cold water supply and sanitation, individual objects of such systems, as well as transport infrastructure facilities and public transport means technically related to them.

In early March, the government has already introduced relief for participants in the system of state contracts and provided for the possibility of public procurement from a single supplier, that is, without a tender. A similar measure was applied during the pandemic, but on the condition that the purchased goods, works or services are used to prevent or eliminate the consequences of the epidemic. In addition, the authorities allowed not to publish part of public procurement in the public domain.

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Another draft of temporary amendments - on making changes to the terms of the concession agreement without the approval of the antimonopoly authority - also provides for exceptions. It does not apply to agreements, the subject of which are housing and communal services, as well as waste processing facilities - processing, accumulation, disposal, neutralization, disposal of municipal solid waste (MSW). The Federal Antimonopoly Service (FAS) insisted on making these exceptions, it follows from the comments of the department to the bill.

For concession agreements in the field of housing and communal services and MSW, the Ministry of Construction, together with the Ministry of Natural Resources, should develop a separate bill with anti-sanction amendments, the government recalled.

As follows from the bill, changing the terms of the concession agreement should not lead to a change in the purpose of the object, a decrease in the volume of investments and an increase in prices for goods or services produced. On the other hand, it will be possible to agree on changing the terms for the execution of agreements if it is impossible to meet them due to force majeure circumstances.

The authorities will simplify the payment to suppliers of building materials under the state order Business

Benefits and risks of innovation

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). “In practice, the conclusion of an agreement on the basis of a private initiative, even in the absence of competitors, requires at least 45-60 days due to the presence of minimum mandatory deadlines for compliance with formal procedures. The possibility of concluding agreements without a tender will save this time,” explains Mironov. Without the need to go through a tender, investors will be interested in starting pre-project preparation at the late stages of negotiations, before the conclusion of an agreement, which will also reduce the timeframe for project implementation, he adds.

Denis Kachkin, Managing Partner, Head of the Infrastructure and PPP Practice at Kachkin & Partners, agrees that concluding agreements without a tender will save time. However, he sees the risks of deterioration of the competitive background with the expansion of the practice of selecting concessionaires without a tender and changing the terms of agreements without the approval of the antimonopoly service. “In fact, a moratorium is being introduced on FAS approvals for a certain period. Such a liberal approach can give rise to distortions in its use,” Kachkin warns. According to him, now many concessions are being adjusted and some of the changes in them are related to adjustments in the construction market, the influence of external circumstances. “However, a large number of projects are in default due to poor initial structuring or the fault of the concessionaires. "Dubina" FAS,

Cancellation of the preliminary agreement with the Federal Antimonopoly Service does not mean that the conceders will be able to make changes to the agreements at their own discretion, without objective grounds, retorts Mironov. “The FAS and other supervisory authorities will retain the authority to exercise follow-up control and appeal against unreasonable changes,” he explains.

InfraVEB General Director Denis Nozdrachev is confident that the ability to change the terms of concession agreements without the approval of the FAS is now “objectively in demand”. “It is important to establish the possibility of revising the terms of such agreements in relation to the specific circumstances of the current moment, fixing too broad a norm can lead to abuse,” says Nozdrachev. For example, according to him, changes in terms of import substitution and the possibility of revising the volume of investments due to rising prices are now in demand.

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Mironov also believes that, first of all, it is necessary to change the terms of agreements that are directly affected by the crisis. “These include the conditions for attracting debt financing, including interest rates, as well as the cost of construction and, in general, the issues of the volume of costs for the project, which depend on inflation. Also, changes may be associated with the deviation of the exchange rate from the forecast parameters and the sanctions of unfriendly states. One of the common ways to solve problems is to extend the project implementation period or change the characteristics of the concession object,” he notes.

Experts are not afraid that the conclusion of concession agreements will lose transparency. “From the moment the concession mechanism appeared on the market, the process of concluding agreements has always been public, regardless of the chosen procedure for concluding,” Nozdrachev believes.

“The decision to conclude a concession agreement is formalized by a normative act, even if it is concluded without a tender, it is published and is publicly available. However, the legislation does not provide for the publication of detailed information about such agreements and amendments to already concluded agreements,” reminds the senior lawyer of the National PPP Center.

The center advocates greater openness. “Information about launched projects should be open. The authorities should publish, if not the full text of the agreement, then at least its main parameters,” Mironov is convinced.

When agreeing on the amendments, the Ministry of Justice did not see corruption factors in them, it follows from the materials for consideration by the government commission.

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