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Concession (contract)

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A concession or concession agreement is a grant of rights, land, property, or facility by a government, local authority, corporation, individual or other legal entity.

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33-454: Public services such as water supply may be operated as a concession. In the case of a public service concession, a private company enters into an agreement with the government to have the exclusive right to operate, maintain and carry out investment in a public utility (such as a water privatisation ) for a given number of years. Other forms of contracts between public and private entities, namely lease contract and management contract (in

66-608: A public good (being non rivalrous and non excludable), but most are services which may (according to prevailing social norms ) be under-provided by the market . In most cases public services are services , i.e. they do not involve manufacturing of goods . They may be provided by local or national monopolies, especially in sectors that are natural monopolies . They may involve outputs that are hard to attribute to specific individual effort or hard to measure in terms of key characteristics such as quality. They often require high levels of training and education. They may attract people with

99-905: A cross-border interest has been subject to the principles of the Treaty on the Functioning of the European Union . The European Commission had originally included public concession contracts in the Services Directive of 1992, but these were removed from its scope by the European Council. However, the European Parliament and the Council issued a further Directive 2014/23/EU on the award of concession contracts on 26 February 2014, which required EU member states to introduce national legislation covering

132-526: A global initiative which aims to influence the provision of public services and infrastructure for marginalized demographics. Governing bodies have long provided core public services. The tradition of keeping citizens secure through organized military defense dates to at least four thousand years ago. Maintaining order through local delegated authority originated at least as early as the Warring States period (5th to 3rd centuries BCE) in ancient China with

165-489: A greater share of public sector supply opportunities to small businesses . It is one of the most radical reforms affecting businesses since Brexit : the UK Government sees it as "throwing complicated and bureaucratic EU rules into the bin [and] stripping back red tape ". The government held a consultation in 2023 on how to implement the act's provisions including by supplementary provision by regulations. The bill for

198-446: A private corporation runs a natural monopoly , then the corporation is typically heavily regulated, to prevent abuse of monopoly power. Lastly, the government can buy the service on the free market. In many countries, medication is provided in this manner: the government reimburses part of the price of the medication. Also, bus traffic, electricity, healthcare and waste management are privatized in this way. One recent innovation, used in

231-441: A property by the government may be in return for services or for a particular use, a right to undertake and profit by a specified activity, a lease for a particular purpose. A concession may include the right to use some existing infrastructure required to carry out a business (such as a water supply system in a city); in some cases, such as mining , it may involve merely the transfer of exclusive or non-exclusive easements . In

264-469: A public service ethos who wish to give something to the wider public or community through their work. The process of assessing the needs of the people of an area, and then designing and securing an appropriate public service to meet those needs, is often referred to in the UK as commissioning . The commissioned services may be delivered by organisations in the public sector, private sector or third sector : when

297-633: A white paper published by the Cameron–Clegg coalition in the United Kingdom in July 2011, aimed to create a comprehensive policy framework for "good public services ". It set out the coalition's programme for reform of public services, described as a programme of "wide ambitions" expected to be implemented over a period of time, not all at once. Five principles were to underlie open public services: The journalist David Boyle conducted an independent review for

330-515: The World wars of the first half of the twentieth century. In parts of Europe , central planning was implemented in the belief that it would make production more efficient. Many public services, especially electricity, fossil fuels and public transport are products of this era. Following the Second World War, many countries also began to implement universal health care and expanded education under

363-447: The fire services , police , air force , paramedics and public service broadcasting . Even where public services are neither publicly provided nor publicly financed , they are usually subject to regulation going beyond that applying to most economic sectors for social and political reasons. Public policy , when made in the public's interest and with its motivations, is a type of public service. In modern developed countries ,

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396-541: The wider public sector " was launched in September 2023. The offer includes overview level training for suppliers as well as basic and advanced training for public sector procurement practitioners. The first tranche of overview training, referred to as "Knowledge Drops", was made available in December 2023. Other training on the act is available commercially. The Procurement Regulations 2024 ( SI 2024 /692) made provision about

429-551: The UK found that private sector hiring managers do not credit government experience as much as private sector experience. Public workers tend to make less in wages when adjusting for education, although that difference is reduced when benefits and hours are included. Public servants have other intangible benefits such as increased job security and high wages. A study concluded that public services are associated with higher human need satisfaction and lower energy requirements while contemporary forms of economic growth are linked with

462-494: The UK increasingly as well as Australia and Canada, is using public-private partnerships , which involve giving a long lease to private consortia in return for partly or fully funding infrastructure costs. Procurement Act 2023 The Procurement Act 2023 (c. 54) is an act of the Parliament of the United Kingdom . The act seeks to overhaul public procurement law in the United Kingdom by simplifying processes and giving

495-605: The UK's Treasury and the Cabinet Office on public demand for choice in public services which reported in 2013. The principle of choice where possible was embodied in the Choice Charter, published on 16 May 2013, where four choice principles were outlined: Between December 2012 and May 2013, "Choice Frameworks" were scheduled for publication covering NHS care, social housing , school education, early years education and adult social care . Nationalization took off following

528-552: The US) by Public Utility Commissions . Examples noted in a history of public services in Oxford include street-repair, cleansing, and lighting , drainage and sewage disposal, water, gas and electricity supply, police and fire services, the Post Office, transport, hospital services, and the provision of baths , parks and cemeteries . A public service may sometimes have the characteristics of

561-592: The act and whether organ harvesting should be included in the act. The act was finally agreed to on 25 October 2023 and received royal assent on 26 October 2023. A proposal allowing for companies who engage in forced organ harvesting to be excluded from public procurement opportunities was added during the bill's passage through the House of Lords, but later withdrawn because the broader provisions on professional misconduct would already cover this issue. An "official learning and development offer for central government and

594-460: The act was introduced to the House of Lords by Baroness Neville-Rolfe on 11 May 2022 and had its third reading in the House of Commons , after being introduced by Jeremy Quin , on 13 June 2023. The act was significantly amended when travelling through Parliament and there was a stand-off with both Houses during the wash-up period leading up to the 2023 prorogation of Parliament about the final form of

627-614: The aggregate members of a community, whether provided directly by a public sector agency, via public financing available to private businesses or voluntary organisations, or provided by private businesses subject to a high level of government regulation. Some public services are provided on behalf of a government's residents or in the interest of its citizens. The term is associated with a social consensus (usually expressed through democratic elections ) that certain services should be available to all, regardless of income , physical ability or mental acuity . Examples of such services include

660-507: The award of concession contracts in excess of EUR 5,186,000 awarded on or after 18 April 2016. In the UK, the equivalent threshold for concession contracts is £4,104,394. Concession contracts granted by public bodies fall within the term "covered procurement" in the Procurement Act 2023 . Public services A public service or service of general (economic) interest is any service intended to address specific needs pertaining to

693-468: The facilities and assets to the concessionaire. Those that were built, acquired and designated by the concessionaire may initially be owned and controlled by the concessionaire and these will be transferred to the authority once its concession duration is ended. Muhammad Ali of Egypt used contracts called concessions to build cheap infrastructure - dams and railroads - whereby foreign European companies would raise capital, build projects, and collect most of

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726-402: The facilities. The assets and facilities that were built, designated, and acquired prior to the turnover of operations and maintenance from the authority to the concessionaire and are included on a plan of a project that was planned by an authority are predetermined as owned by the authority and to be operated and maintained by the concessionaire upon the turnover of operations and maintenance of

759-452: The funding and guidance of the state. There are several ways to privatize public services. A free-market corporation may be established and sold to private investors, relinquishing government control altogether. Thus it becomes a private (not public) service. Another option, used in the Nordic countries , is to establish a corporation, but keep ownership or voting power essentially in the hands of

792-513: The government. For example, the Finnish state owned 49% of Kemira until 2007, the rest being owned by private investors. A 49% share did not make it a "government enterprise", but it meant that all other investors together would have to oppose the state's opinion in order to overturn the state's decisions in the shareholder's meeting. A regulated corporation can also acquire permits on the agreement that they fulfill certain public service duties. When

825-505: The institution of xiàn (prefectures) under the control of a centrally appointed prefect. Historical evidence of state provision of dispute resolution through a legal/justice system goes back at least as far as ancient Egypt. A primary public service in ancient history involved ensuring the general favor of the gods through a theologically and ceremonially correct state religion . The widespread provision of public utilities as public services in developed countries usually began in

858-551: The late nineteenth century, often with the municipal development of gas and water services. Later, governments began to provide other services such as electricity and health care . In most developed countries, local or national governments continue to provide such services, the biggest exceptions being the U.S. and the UK , where private provision is arguably proportionally more significant. Nonetheless, such privately provided public services are often strongly regulated, for example (in

891-643: The operating revenue but would provide Ali's government with a portion of that revenue. Within the European Union , the granting of concessions by public bodies is subject to regulation. Works concessions have been subject to award rules for some time as Directive 2004/18/EC of the European Parliament and of the Council of the EU on public procurement applied to works concessions. The award of services concessions with

924-479: The opposite. Authors find that the contemporary economic system is structurally misaligned with goals of sustainable development and that to date no nation can provide decent living standards at sustainable levels of energy and resource use. They provide analysis about factors in social provisioning and assess that improving beneficial provisioning-factors and infrastructure would allow for sustainable forms of sufficient need satisfaction. Open Public Services ,

957-731: The private or third sector is involved the process of commissioning will usually be linked with a process of procurement , to determine who will provide the services, at what cost and on what terms. Commissioning is often seen as a cyclical process. Public services can be constructed, coordinated and operated in many ways or forms. They include government agencies, independent state -funded institutes, government-coordinated organizations, civil society, military agencies and volunteers. Government agencies are not profit-oriented and their employees are often motivated differently. Studies of their work have found contrasting results including both higher levels of effort and fewer hours of work. A survey in

990-508: The private sector, the owner of a concession — the concessionaire — typically pays either a fixed sum or a percentage of revenue to the owner of the entity from which it operates. Examples of concessions within another business are concession stands within sporting venues and movie theaters and concessions in department stores operated by other retailers . Short term concessions may be granted as promotional space for periods as short as one day. Concession agreement may also state

1023-416: The role of an authority and concessionaire and conditions regarding control and ownership of the assets and facilities such as concession can either allow the authority to retain or keep actual ownership of the assets, turning over to the concessionaire and reverting the control and ownership back to an authority once the duration of their concession ended or both the authority and concessionaire control and own

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1056-459: The term "public services" (or "services of general interest") often includes: In developing countries , public services tend to be much less well developed. For example, water services might only be available to the wealthy middle class . For political reasons, the service is often subsidized , which reduces the finance potentially available for expansion to poorer communities. The United Nations Sustainable Development Goal 5 is, however,

1089-505: The water sector often called by the French term affermage ), are closely related but differ from a concession in the rights of the operator and its remuneration. A lease gives a company the right to operate and maintain a public utility, but investment remains the responsibility of the public. Under a management contract the operator will collect the revenue only on behalf of the government and will in turn be paid an agreed fee. A grant of land or

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