When carrying out assignments of the President of the Russian Federation, the Ministry of Economic Development elaborated a draft federal law “On introducing amendments to Federal Law ‘On concession agreement’ and Federal Law ‘|On protection of competition’” (the “Draft Law”) providing for the following amendments:

1. List of property which may be subject to a concessor’s fee is expanded (at present, the concessor’s fee is allowed only in projects aimed at construction / reconstruction of roads and engineering structures of transport infrastructure);

2. Concession agreements are allowed with respect to facilities which at the time of entering into such agreement are managed by state budget institutions and state unitary enterprises;

3. Concession agreements are allowed with respect to communications facilities;

4. The concessionaire is entitled to demand that material terms and conditions of a concession agreement be amended in case of force majeure or government actions resulting in the impossibility to fulfill the agreement or in the concessionaire’s revenue being reduced;

5. In the event of any amendments not in favor of the concessionaire, the concessor is obliged to take measures ensuring return on the concessionaire’s investments in an amount determined in advance (the concessor is entitled to change the amount of payment payable to it under a concession agreement, validity term of such agreement and the amount of costs and expenses it incurred on construction/reconstruction of a facility under the agreement).

In addition, it is proposed to exclude warranties and proprietary rights granted to the concessionaire from the legislation on state preferences.

Additional notes

Should any questions arise in connection with the above or if you need any additional materials, please contact Pavel Karpunin or Rimma Leshcheva, St. Petersburg Office of Capital Legal Services.

This Information letter keeps the clients of Capital Legal Services and other interested parties abreast of information that may, to any extent, affect their activity or cater to their particular interests. The opinions and commentaries expressed in this information letter shall not be deemed as legal opinions and do not cancel the need to obtain legal advice or legal opinion on separate issues.