ON CONCESSIONS
("Official Herald of the RS", No. 55/2003)
I BASIC PROVISIONS
Subject-Matter of Law
Article 1
The present Law regulates requirements, manner and procedure of granting a concession for the utilization of natural resources, of the good in common use designated by law as the property of the Republic of Serbia, and for the performing of activities of general interest; the subject of concession; time-limit of concession; concession contract; concession fee; materialization of concession rights and duties; founding and operation of concession enterprise, and other matters relevant for the realization of the concession.
Principles
Article 2
The regulation of requirements, manner and procedure of granting a concession shall be based on the principles of equal and fair treatment, free market competition and autonomy of choice of contracting parties.
The principle of equal and fair treatment shall include the prohibition against discrimination on any ground whatsoever between participants in the concession granting procedure and in the choice of concessionaires, as well as a duty to supply the participants in the procedure of choosing the concessionaires with complete and correct information as to procedure, standards and criteria for making the choice of concessionaires. No participant in the procedure of choosing concessionaires shall have priority over the others in terms of time, information and approach to the agencies in charge of the concession granting procedure. Decisions shall be rendered, on the ground of impartial criteria made public in advance, and dispatched, with an assignment of reasons, to every participant in the choosing procedure.
The principle of free market competition shall include a prohibition against limiting the competition between participants, and a duty of accepting all the participants whose bids meet the requirements prescribed by law and the concession act.
The principle of autonomy of choice shall include the freedom of contracting parties to freely regulate, in conformity with the law and other regulations and good trade usage, their mutual rights and duties.
Concept of Concession
Article 3
Concession, in terms of the present Law, shall be understood to mean the utilization of natural resources, of good in common use, or the performing of activities of general interest, ceded by a State agency in charge (hereinafter: concession grantor) to a domestic or foreign person (hereinafter: concessionaire) for a definite period of time, under the conditions prescribed by the present Law, and against payment of concession fee.
Foreign person, in terms of the present Law, shall be understood to mean: a foreign legal entity having a business seat abroad; a foreign natural person; a citizen of the State Union Serbia and Montenegro having residence and/or dwelling-place abroad exceeding the period of one year.
Concession, in terms of the present Law, shall be understood to mean also the B.O.T. system concession (build - operate - transfer), including all the forms of that system, which is based on building or reconstruction and financing of a complete facility, equipment or installation, their utilization and handing over into possession of the Republic of Serbia (hereinafter: the Republic) within the time-limit stipulated by contract.
Concession Granting Requirements
Article 4
Concession may be granted to persons meeting the requirements which are provided for by the present Law, the concession act, and the public tender.
Concession Subject
Article 5
The subject of concession may be:
1) exploration and exploitation of all kinds of mineral raw materials;
2) building, restoration, maintenance, and utilization of water resources management facilities, including dams and storage lakes, water supply and water distribution systems, irrigation and drainage systems, and sanitary condition systems;
3) building, maintenance and utilization of roads or reconstruction, development, maintenance and utilization of roads;
4) building, maintenance and utilization of public railroad infrastructure and organising and regulation of railroad traffic or reconstruction, modernization, maintenance or utilization of public railroad infrastructure, and organising and regulation of railroad traffic;
5) building, maintenance and utilization of facilities of air traffic, equipment and airports, or their reconstruction, modernization, maintenance and utilization;
6) building, maintenance and utilization of river navigation facilities and harbours, or their reconstruction, modernization, maintenance and utilization;
7) building, maintenance and utilization of telecommunication facilities, or their reconstruction, modernization, maintenance and utilization;
8) building, maintenance and utilization of oil pipelines, gas pipelines, storage facilities, transport and distribution of gas, or their reconstruction, mondernization, maintenance and utilization;
9) building, maintenance and utilization of municipal facilities for the purpose of performing utility activities;
10) building, maintenance and utilization of power-supply and other facilities for the purpose of production, preservation, transfer and distribution of electric and heating energy, or their reconstruction, modernization, maintenance and utilization;
11) regulation, restoration and utilization of river and lake shores;
12) building, maintenance and utilization of health-care institutions or their reconstruction, modernization, maintenance and utilization, and providing health-care services;
13) building of sport and recreational facilities, sports grounds and spaces for sports and recreation, including centers for sports and cultural activities;
14) utilization of thermal springs for health and production purposes;
15) building of facilities, reconstruction, modernization and utilization of the existing facilities in spas, areas with natural curative properties and other natural values, for the purpose of their utilization;
16) building, maintenance and utilization of tourist trade infrastructure facilities, or their reconstruction, modernization, maintenance and utilization.
The subject of concession may include also the performance of other activities that are designated by law as activities of general interest.
A concession may not be granted to a foreign person for those areas and those fields where, according to the law regulating foreign investments, a foreign person may not be a founder of an enterprise.
Concession Term
Article 6
A concession may be granted for a term not exceeding 30 years.
The concession term shall be determines by considering the subject of concession and the expected gain from performing concession activity. In determining the term referred to in paragraph 1 of the present Article, and particularly in case of ceding exclusive rights, one shall especially consider the degree of the business risk assumed, the need for building facilities in the initial period, as well as the needs for developing a competitive market in the area of activities that are the subject of concession.
The concession contract may provide for a possibility of extending the concession term, should after entering into contract essential changes of requirements do take place under which the concession has been granted, that substantially make more difficult the fulfilment of contract by one of the parties, or due to which the purpose of contract may not be realised, and should such a change be impossible to be foreseen at the moment of entering into contract. Such extension may not exceed the term referred to in paragraph 1 of the present Law.
II PROCEDURE AND MANNER OF CONCESSION GRANTING
Proposal for Granting a Concession
Article 7
A proposal for granting a concession to be submitted to the Government of the Republic of Serbia (hereinafter: the Government) shall be made by a ministry in charge of a corresponding area (hereinafter: ministry in charge).
The proposal for granting a concession may be put forward to the Government also by a competent agency of the autonomous province, if the subject of concession is located in the territory of the autonomous province, as well as by the assembly of the local self-government unit in whose territory the subject of concession is located.
An interested person may initiate the granting of concession with the authorised propounder specified in paragraphs 1 and 2 of the present Article.
The proposal for granting a concession shall particularly include: the indication of the subject of concession, an assessment of warrantableness and amount of investment, approximate term of concession, basic requirements of realization of the concession, the proposal for the amount of fee, the purpose of utilization of the concession subject, and where the proposal initiation is put forward by an interested person, also the data concerning such person (firm's name, name of the individual, registration evidence).
The Government shall notify the propounder of its standpoint, relating to proposal for granting a concession, within four months from the day of receipt of the proposal, at the latest.
If the subject of concession is building, maintenance and utilization of facilities referred to in Article 5, paragraph 1, sub-paragraphs 3, 4, 5, 6, 7, 8 and 10 of the present Law, that are strategically important for the Republic or have an international significance, the proposal for granting a concession shall be forwarded by the Government to the National Assembly of the Republic of Serbia.
The National Assembly of the Republic of Serbia shall notify the Government of its standpoint relating to the proposal specified in paragraph 6 of the present Article within three months from the day of receipt of the proposal, and the Government shall accordingly notify the propounder.
Proposal for Rendering a Concession Act
Article 8
On the ground of Government's standpoint and/or standpoint of the National Assembly in the case referred to in Article 7 of the present Law concerning the purpose of granting a concession, and on the ground of economic, financial, social and other indicators, the ministry in charge shall prepare a proposal for rendering a concession act, that shall be forwarded to the Government within six months from the day of the receipt of Government's standpoint and/or notification relating to the standpoint of the National Assembly.
A proposal for rendering a concession act for exploration and exploitation of all kinds of mineral raw materials in the territory of the autonomous province shall be prepared by a competent agency of the autonomous province, in the manner and under the conditions specified in paragraph 1 of the present Article, for the purpose of forwarding it to the Government.
A proposal for rendering a concession act for building, maintenance and utilization of facilities intended for the performance of utility activities shall be prepared by a competent local self-government agency, in the manner and under the conditions specified in paragraph 1 of the present Article, which proposal shall be forwarded to the Government together with the opinion of the ministry in charge.
The proposal for rendering a concession act shall include:
1) the subject of concession;
2) reasons for granting the concession;
3) information relating to environmental effects of the concession activity, to effects on infrastructure and other commercial areas, on efficient functioning of technical-technological systems;
4) minimal technical, financial and empirical requirements in terms of qualifications to be met by the candidate in order to be admitted to participate in the procedures of choosing the concessionaire and negotiating;
5) term of concession, including the assignment of reasons for the proposed term;
6) data relating to necessary monetary and other requirements and to dynamics of their investing; the way of payment, supplying guarantees or other security instruments to cover the carrying out of concession duties; rights and duties of the concessionaire towards the beneficiaries of services that are the subject of concession, including matters involving the lodging of objections on the part of these beneficiaries; matters of conditions and manner of performing supervision; prices and general requirements as to the utilization of public good and the performing of activities;
7) evaluation of necessary number of work posts and of qualified working force relating to carrying out the concession, should this be proposed as an element of the concession act.
Rendering a Concession Act
Article 9
A concession act shall be rendered by the Government.
The concession act shall be published in the "Official Herald of the Republic of Serbia".
Contents of Concession Act
Article 10
Concession act shall include:
1) the subject of concession and the indication of area of carrying out the concession activity;
2) concession term;
3) basic elements of the public tender, information and instructions regarding the tender dossier;
4) requirements to be met by concessionaire;
5) criteria serving as a ground for choice of the most favourable bid;
6) conditions and manner of carrying out the concession activity (requirements and manner of providing services to beneficiaries, and the like);
7) requirements in the sphere of environmental protection, security and work safety for employees engaged by the concessionaire;
8) kind and amount of the guarantee or other security instruments for carrying out the concession;
9) way of specifying the concession fee;
10) other elements relevant for the regulation of mutual rights and duties of the concessionaire and the concession grantor.
Where the subject of concession is reconstruction, adaptation or restoration of existing facilities, the concession act shall include also an assessment of the amount of investment, which shall be determined by considering the value of the facilities whose reconstruction, adaptation or restoration is the subject of concession.
Manner of Granting Concession
Article 11
A concession shall be granted on the ground of a previously conducted public tender procedure.
By exception, the public tender procedure may be excluded should national defence and security be jeopardised by its conducting, which matter shall be decided upon by the Government.
The act referred to in paragraph 2 of the present Article shall be published in the "Official Herald of the Republic of Serbia".
Public Tender Advertisement
Article 12
A public tender advertisement shall be published by agency in charge of preparation of the proposal for rendering the concession act, specified in the present Law, in the "Official Herald of the Republic of Serbia" and in at least one daily newspaper, while if the subject of concession is building, maintenance and utilization of facilities referred to in Article 5, paragraph 1, sub-paragraphs 3, 4, 5, 6, 7, 8 and 10 of the present Law that are strategically important for the Republic, or are internationally significant, also in an international newspaper.
Should the subject of concession be located in the territory of the autonomous province, the public tender advertisement may be published by the agency in charge of the autonomous province in the official gazette of the autonomous province. In such a case, the time-limits shall be calculated from the day of publishing in the "Official Herald of the Republic of Serbia".
The public tender advertisement shall particularly include:
1) subject of public tender;
2) all the elements of concession act;
3) dates and time-limits for taking part in the public tender, provided such time-limit may not be shorter than 45 days from the day of publication of the public tender advertisement;
4) criteria for participation in the public tender;
5) public tender rules of procedure;
6) manner of submitting the bids (by using a code-letter or under full name of the tender participant);
7) indication of date, time and location of opening of public tender bids that are received;
8) deadline for withdrawal of a public tender bid;
9) indication as to the amount and form of trust money;
10) conditions and manner of refunding the trust money;
11) name of a person in charge for disclosing complete information relevant for the public tender procedure.
Expenses of publishing the public tender advertisement shall be to the debit of the agency placing the advertisement.
Public Tender Bids
Article 13
Public tender bids shall be submitted on the ground of public tender advertisement, directly to the ministry in charge or by registered letter.
If a bid is forwarded by registered letter from the territory of the Republic, the day of receipt of the bid shall be considered the day of handing over the registered letter to the post office.
If the bid is forwarded by registered letter outside the territory of the Republic, the day of receipt of the bid shall be considered the day of receipt in the ministry in charge.
Tender Commission
Article 14
Public tender shall be carried out by a tender commission that is established by a minister in charge for the corresponding area (hereinafter: Commission).
Eminent experts in the fields relevant for the subject of concession shall be nominated in the Commission (financial, juridical, technical and other fields).
On the ground of a particular tender or by invitation, the ministry in charge may engage advisors for performing transactions and extending assistance in the preparation and conducting of public tender and in choosing the best bidder.
One member of the Commission shall be nominated by the National Assembly of the Republic of Serbia.
Should the proposal for granting a concession be submitted by a competent agency of the autonomous province, such agency shall nominate also one member of the Commission.
If the subject of concession is building, maintenance and utilization of utility facilities for the purpose of performing municipal services, the assembly of the local self-government unit, being the location of the concession activity, shall nominate one member of the Commission.
The National Assembly of the Republic of Serbia, the competent agency of the autonomous province and/or the assembly of the local self-government unit shall nominate members of the Commission within 7 days, at the latest, before the day of opening the bids.
Should the National Assembly of the Republic of Serbia, the competent agency of the autonomous province and/or the assembly of the local self-government unit fail to nominate a member of the Commission within 7 days, at the latest, before the day of opening the bids, the Commission shall operate and decide as composed according to paragraph 1 of the present Article.
The Commission shall render decisions by a majority vote out of the total number of members.
Individuals having any kind of business relations whatsoever with any of the public tender participants shall not be nominated to the Commission, which shall also apply to individuals whose spouse, straight line relative without limits, and lateral relative, up to the third degree of kinship, participate in the public tender.
Commission Work
Article 15
The Commission shall take minutes of the public tender procedure that shall include all the remarks of representatives of the bidders relating to the work of the Commission and the course of procedure.
The minutes shall be signed by members of the Commission and the authorised representative of the bidders being present at the opening of bids. Should the authorised representative refuse to sign the minutes, such fact shall be entered in the minutes.