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Friday, 26.04.2024, 20:34
Lithuanian Parliament approves new Concessions law
By passing additional legislation alongside the adoption of
the EU Directive, the Lithuanian Parliament has ensured that the country’s
legal framework for concessions is as broad and versatile as possible. The EU
directive provides for an uncapped maximum contract term, the possibility for
more types of public entities to launch concession projects, and increased
opportunities for a wider range of candidates to participated in tenders (such
as temporary associations of undertakings, natural persons and public entities).
Meanwhile, the new law on concessions passed by Parliament will allow for
increased flexibility in the transfer and use of public assets by
concessionaires. The legislation also provides for a clearer definition of work
and service concessions and establishes clear rules for calculating concession
value.
According
to Tadas Jagminas, Director of the Project Management
Department at Invest Lithuania, the legislation could lead both to more
concessions being offered and more bidders taking part in them. “The broadened
definition of who can be a granting authority is likely to widen the number of
sectors where new concessions are undertaken,” says Mr Jagminas. “In addition,
the increased flexibility in terms of asset use and project length will allow
the country to offer more attractive investment opportunities. Overall, the new
Concessions law is expected to increase the number of projects in the pipeline,
and foster more intense competition and better bids.“
The latest statistics
confirm that concessions are the main PPP model in use in Lithuania. To date,
50 concession contracts have been signed, with the majority of these being
service concessions by municipalities. Analysis by Invest Lithuania shows this
trend is set to continue. According to this analysis, municipal and
governmental level public authorities have ambitious plans to implement up to
10 new concessions projects, mainly in the leisure and culture sectors. “It
should be noted that these plans do not include the plans of public entities,
which are newly entitled to launch concession projects under the new Concession
law”, adds Mr. T. Jagminas, further strengthening the expectation for an
increase in the PPP pipeline.
Lithuania’s
PPP regulatory environment and procurement processes are already very
favourably rated by multilateral institutions such as the World Bank and the
EBRD. And the new legislation will further contribute to the ongoing
improvement of the country’s PPP regulatory framework.