In the private sector, the owner of a concession – the concessionaire – usually pays either a fixed amount or a percentage of the income to the owner of the business from which he operates. [2] For example, concessions within another company are concessions in sports establishments and cinemas, as well as concessions in department stores operated by other retailers. Short-term concessions can be granted as advertising space for periods of one day only. The terms of a concession contract depend largely on his wishes. For example, a contract to operate a food concession in a popular stadium may not be very incentive for the concessionaire. On the other hand, a government that wants to attract mining companies to an impoverished area can offer considerable incentives. These incentives could include tax benefits and a lower licensing rate. Finally, a concession contract may include an exclusivity clause intended to prevent the concessionaire or operator and its subsidiaries from competing with other terminal operators for the particular traffic for which the concession has been granted, in certain geographical areas and for certain periods, to the reasonable extent of the market situation and the scale of the investments. In any event, that period must remain sufficiently short in relation to the duration of the concession contract and, in the case of a BOT agreement, not exceed a period preferably of five years after the conclusion of the construction programme. The effectiveness of a full concession contract depends on compliance with certain conditions precedent and on proof that there are no circumstances that could prematurely terminate the agreed terms (see Box 25).
Under a full concession contract, the parties are usually composed of a port authority and a single promoter or consortium of sponsors (often referred to as special vehicle companies or securitisation vehicles [SPC]. The consortium does not necessarily have to be identical to the operator, but it may include the operator as a member of the consortium. What distinguishes a concession contract from a right of succession? When would one instrument be preferable to another? Box 23 summarizes the formal differences and similarities. Each concession contract contains a list of definitions to precisely define both the object and the concepts used throughout the contract. These definitions vary from country to country and from one legal system to another. Below are examples of the most commonly used definitions. The majusculation of a word within a chord often means that the word is specifically defined in the definition section of the chord. In India, the Supreme Court adopted the doctrine of the main agencies regarding concession agreements in VST Industries Limited v VST Industries Workers` Union and Anr. In this case, the Supreme Court ruled that a private body that controlled or operated infrastructure in India under a concession contract should be considered a public function and that those entities were required to act in the public interest. Construction contract: the contract or contracts which have been or are to be concluded between the contracting authority and the operator for the construction of works relating to the container terminal [name] or the (port) facility in a form containing provisions approved by the port authority concerning their allocation to port operation or the exercise of other rights in stages of port operation.
. . .