The President has signed the new Concessions Act into law | In Principle

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The President has signed the new Concessions Act into law

The Act on Concession Contracts for Construction Works or Services of 21 October 2016 was signed by the President of Poland and published on 29 November. The act entered into force on 14 December.

Unlike in the case of implementation of the other new procurement directives by amendment of the existing Public Procurement Law, lawmakers in Poland decided that because the changes that would have to be introduced to the Concessions Act of 2009 were so extensive, instead they would adopt an entirely new act to implement the Concessions Directive (2014/23/EU). Indeed, the new act is much more extensive than the previous one. But many of the changes reflect the amended provisions of the Public Procurement Law or are modelled on them. This is the case with the grounds for exclusion of contractors or modification of contracts. Similarly, the threshold for application of the act has been set at the equivalent of EUR 30,000, and the grounds for excluding application of the Concessions Act are also similar.

Certain terminology has been abandoned, such as a special term for the party granting a concession (koncesjodawca), “interested entity” (zainteresowany podmiot), “candidate” (kandydat) and “offeror” (oferent). The terminology has been simplified in the new act, with the parties to a procedure for award of a concession contract referred to as the “contracting authority” or “contracting entity” (zamawiający) and the “contractor” (wykonawca). Only after conclusion of a concession contract does the contractor become a “concessionaire” (koncesjonariusz), while the other party remains the “contracting authority” or “contracting entity,” which the drafters regarded as the correct term because the same group of entities are required to award procurement contracts and concession contracts for construction works and services in compliance with the public procurement regime.

Review by National Appeal Chamber

A big change affects the manner of seeking review of actions by the contracting authority in a concession procedure. Under the new act, this will work much as does for procurement procedures. Thus, under Art. 54 of the new Concessions Act, if a contractor or other entity that has or had an interest in concluding a concession contract and incurred or could incur a loss as a result of violation of the act by the contracting authority, that party will have a right to seek review of the action allegedly contrary to the act in a procedure for award of a concession contract, or failure to take an action which the contracting authority was required to take under the act. This appears to be a positive change, but it should be anticipated that there will be many more cases filed with the National Appeal Chamber (KIO)—particularly considering that the amended Public Procurement Law expanded the possibility of appealing against decisions by contracting authorities in procurements above the threshold (as we discussed here and here). As in procurement cases, there will be a right to file a complaint with the regional court against a KIO ruling. This route for challenging actions by the contracting authority replaces the previous right to file a complaint with the regional court and then a cassation appeal.

The president of the Public Procurement Office has been designated as the competent authority in the case of concession contracts.

Period for which a concession contract can be concluded

The new act no longer specifies the maximum periods for which concession contracts may be concluded (previously it was 30 years for construction works or 15 years for services). However, pursuant to the Concessions Directive (Art. 18 and recital 52), for concessions with a duration greater than five years, the duration should be limited to the period in which the concessionaire could reasonably be expected to recoup its initial investment to perform the construction works or services, and further investments during the operating period, together with a return on invested capital.

We have written previously on our portal about other major changes introduced by the new Concessions Act.

Implementation of the rules for concession contracts for construction works and services set forth in Directive 2014/23/EU is the final stage of legislation to conform Polish regulations with EU law introduced under the package of new procurement directives adopted in 2014.

Hanna Drynkorn, Infrastructure, Transport, Public Procurement & PPP practices, Wardyński & Partners