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5. Concession

Bulgarian legislation provides a broad scope of options for private participation in carrying out of activities in public interest. One of the traditional forms of public-private partnership in Bulgaria is the concession. The following types of concessions are regulated by the law:

 

  • The works concession includes the whole or partial construction of the object of concession and the management and maintenance of the completed object after it has been put into operation at the risk of the concessionaire in exchange for the right of the concessionaire to exploit the object of the concession, or of that right in addition to a compensation on the part of the contracting authority.

  • The service concession is the management and maintenance of a service of public interest at the risk of the concessionaire in exchange for the right of the concessionaire to exploit the services, or of that right in addition to compensation on the part of the contracting authority. The service concession may also include the execution of partial additional construction works in cases when there is a need for partial extension, partial reconstruction, partial rehabilitation or renovation of the object of the concession.

 

  • The mining concession is the extraction of natural resources through mining, performed at the costs and risk of the concessionaire. Bulgarian legislation makes a distinction between several types of mining concessions: concessions for extraction of natural resources, concessions for extraction of underground resources and concessions for extraction of mineral water. The concession for extraction of natural resources includes the right to acquire ownership of natural resources extracted species for which the concession is granted, to acquire the beneficial ownership of mining waste from the extraction and primary processing, and conduct all necessary activities extraction, including prospecting within the deposit, storage, processing, transport and sale of natural resources types for which the concession is granted.

 

  • The concession for extraction of mineral water is granted for water use intended for bottling of natural mineral flat and / or carbonated water and other beverages in with mineral water in their composition. Concession can also be granted for extraction of valuable substances from the mineral water.

 

The sectors in which concessions may be granted to private investors are not limited. Moreover, the new law on public-private partnership currently considered by the Parliament further expands the possibilities for private intervention in the provision of public services.

 

Concessions

Concessions

Concessions

o    The Council of Ministers regarding state-owned assets

o    The Municipal Council regarding assets that are municipal property and for mineral water resources which are exclusive state property and are provided gratuitously to the municipalities for management and use

o    A public legal organization represented by a body according to its constituent deed, regarding its own assets

1)       Preparatory actions by the competent body

2)       Issue of a resolution for opening a concession award procedure;

3)       Conducting a concession award procedure

4)       Selection of a concessionaire;

5)       Procedures in respect of suspension or termination of the concession award procedure and/or for remedy of violations if any violations are found by the European Commission

6)       Concluding a concession agreement

 

 

Preparatory actions

Procedure and required documents

  • The initiative for granting a concession may be applied for by any interested person or by a resolution of the relevant competent body;
  • The initiative of the interested person shall be accompanied by a justification of the advisability of the concession from the point of view of the concession grantor, and by a pre-investment research in case of a concession for construction;
  • The preparatory actions include ensuring by the competent body of a justification of the concession which provides grounds for the concession proposal and defines the characteristics of the concession subject and the main content of the concession

Terms

  • Within three months from the written application by the interested person the competent body shall notify the interested person of the results of the research into the initiative and of its decision whether to refuse the concession or to start preparatory actions for granting the concession.

 

 

Decision for opening a concession granting procedure
Procedure and required documents
  • As a result of the preparatory actions the body which has performed the actions shall make a justified proposal to the concession grantor for opening a concession granting procedure;

  • The proposal shall be accompanied by the concession justification and all other documents indicated in the Law on Concessions and the rules on its implementation;

  • The resolution for opening a concession granting procedure shall define all main parameters of the concession.

Terms
  • Within 7 days from adopting the decision for opening a concession procedure the body which has performed the preparatory actions shall approve, by a resolution, a notice for conducting the procedure, documentation for participation in the procedure and a draft concession agreement and shall send the notice for promulgation on the website of the State Gazette and for registration in the National Concession Register.

 

Conducting a concession granting procedure

Procedure and required documents

1)      Publication of a notice of the procedure in the State Gazette (and in the Official Journal of the EU in some cases) and registration in the National Concession Register; publication of a notice of the procedure in the mass media;

2)      Receiving of the documentation by the applicants;

3)      Submission of bids; each participant in the procedure may place only one bid;

4)      Evaluation of the bids and preparation of a report and a draft resolution for selecting a concessionaire.

Content of the tender documentation

  • Description of the object of concession;
  • Documents for admission to participation in the procedure;
  • Selection criteria and documents evidencing the compliance with them;
  • The terms and conditions to be satisfied by the bid, including the terms of reference;
  • Investment designs for works concessions, if available;
  • Criteria for evaluation of the bids, their relative weight, evaluation methodology, etc.

Terms

  • The terms for receipt of bids may be no shorter than (а) fifty-two days from sending the notice to the website of the State Gazette, in case of works concession where the amount of the investment is above the EU thresholds; (b) thirty-five days from sending the notice to the website of the State Gazette, in all other cases.
  • The term for making the report and draft resolution by the body conducting the procedure is three months.

 

 

Selecting a concessionaire and concluding a concession agreement

Procedure

1)       Based on the report and the minutes of the commission, after independent consideration of the facts and circumstances stated therein, the concession grantor shall take a decision for selecting the bidder rated first as the concessionaire.

2)       The interested participants shall be notified of the decision and its justification and may appeal within 10 days from the notice.

3)       The concession agreement shall be concluded without conducting any negotiations in accordance with the draft included in the bidding documentation and with the bid of the participant rated first.

Terms

  • The interested participants shall be notified of the decision and its justification and may appeal within 10 days from the notice.
  • The term for concluding the concession agreement shall be determined in the decision of the concession grantor for selecting the concessionaire and shall be no longer than three months.
  • The concession grantor may not conclude the concession agreement before the end of a 14-day period from the notification to the interested participants of the selection of a concessionaire.