What is a Concession?
A concession is a contract where a public authority grants a company the right to provide works or services and to commercially exploit them. The key distinction from a regular public contract is that the concessionaire bears the economic operating risk in whole or in part.
Types of Concessions
Works Concession: The company builds a structure and may commercially operate it (e.g., toll roads, parking garages). Revenue comes primarily from user fees.
Service Concession: The company provides a service and bears the demand risk (e.g., canteen services, waste disposal, public transport). Revenue comes from user charges or a combination with subsidies.
Legal Framework: KonzVgV
The Concession Award Ordinance (KonzVgV) governs concessions above the EU threshold of 5,538,000 EUR, requiring publication in TED, a minimum 30-day deadline for participation requests, and adherence to transparency and equal treatment principles.
Distinction from Public Contracts
Unlike regular public contracts where the authority pays directly, concession holders are remunerated through the right to exploit the works or services. This transfers the economic risk to the private sector, typically involving longer contract periods of 10-30 years.