ARTEM MOLCHANOV ON THE NEED TO IMPROVE THE RULES FOR CONCESSION AGREEMENTS

The goals are to improve the quality of competition, attract private investments and increase transparency of tariff regulation

Head of FAS Legal Department Artem Molchanov was a speaker at the discussion session on the “practice of concluding and executing and the regulatory environment of concession agreements in Russia: how to reach the balance between public and private interests”, organized with support of “Corporate Counsels Association during St Petersburg International Legal Forum.

Concession agreements are one of the most widespread forms of structuring relations between the state and private investors under the frame of public private partnership (PPP).

Earlier Head of FAS Igor Artemiev said: “The law on concession agreements must be improved to prevent false concessions. Most part of funds should come from investors and the state should only partly be involved in project financing”.

“We have officially formulated out proposals to modernize the law on concession agreements. These changes will help build up competitive relations in this field while a broad non-discriminatory access to the limited resource, transparent rules and competitive relations will attract private investors”, emphasized Artem Molchanov.

He reminded about one of the goals of the National Competition Development Plan that can be achieved, particularly, through the concession institution: in each sector of the economy there should be at least three economic entities, of which at least one should be private.

According to Head of FAS Legal Department, the existing law is not perfect and abuses of concession agreements and false concessions are possible. FAS proposes to clearly delineate the system of public procurement, PPP and concession, unify the rules for competitive selection of concessioners,  introduce electronic tenders in the system that will allow to remove barriers and anticompetitive relations in concession allocation.

“Our proposals are included in the Road Map which, hopefully will be adopted in the near future. An analysis of concession agreements will be also put in the annual FAS Report on the sate of competition”, pointed outArtem Molchanov.

Finally, he underlined that “competition is not a goal, it’s a tool that increases the level of satisfaction of the population with goods and services. Developing competition in the field of concession agreements will become, among other measures, a step forward in achieving the goal set by the President of Russia to develop the national economy”.