These agreements can be concluded either for the purpose of carrying out an infrastructure project or to provide services related to an infrastructure project. In the early stages of the PPP model in India, several governments and government authorities developed their own concession agreements. This has led to implementation difficulties. In 2000, the Planning Commission obtained the first standard concession agreement (MCA) for the motorway sector. Like the planning commission, WABs were then developed for other sectors for other sectors. The development of WABs has led to the standardization of concession agreements and greater consistency and efficiency in transactions. A rental agreement is a property award of a specific description of the land or other property against a specific price and payment agreement. On the contrary, the concession under a concession agreement is a licence for the use of the property for a specific purpose, once the objective is achieved, all those rights must be returned to the grantor. In this process, the right to manage and control the property is maintained by the owner. The question of which party will pay to the other party is determined by the economic viability of the project to be carried out. Depending on economic viability and risk factor, payment can be made by the private party to the government (share of revenue/concession) or vice versa (payment of subsidy or pension). Development of standard concession agreements.
Concession agreements are very different from other more common trade agreements on the provision of goods and services. Unlike other commercial contacts generally related to private party asset and real estate transactions, concession agreements are intended for public goods and services and are intended to provide essential facilities and services. Apart from that, concession contracts are long-term contracts that usually involve high-quality transactions. Example 6: Peru – Contract de Concesién de los Ferrocarriles del Sur y Sur Oriente (Spanish) – Concession contract between the Peruvian state and a private body (Ferrocaril Transandino S.A.) that provides the concession of the southern (Matarani/Mollendo to Cusco) and south-east (Cusco to Machu Pichu) railway lines. The duration of the concession is 30 years (extendable). The consenting authority entrusts the dealer with the right to use goods and vehicles for passenger and freight services. The dealership`s main obligations include upgrading and remediation of rail infrastructure (including signalling and telecommunications systems), refurbishing rolling stock and improving operational performance. The concessionaire is required to grant open access to other rail operators on a non-discriminatory basis and for payment of a track access fee.
Connection charges must be approved by the regulator. For more information on the rail access agreement agreed for this network, please visit this website. Many PPPs include new assets – often referred to as green prairie projects. For example, the UK pPP programme – the Private Finance Initiative (PFI) – has involved private companies in financing, building and managing new public assets, from schools and hospitals to defence institutions. P3s can also be used to transfer responsibility for modernizing and managing existing assets to a private company – or to wasteland projects. In both cases, an essential feature of a PPP is that the assets or services provided are indicated in the form of expenditures, not entries, i.e. they define what is needed and not how it should be done.