Why Amendments Are Being Made to the Concession Law
Changes to the Law “On Concessions”, which relate to the definition of a concession participant on the part of the state, are made at the request of investors of the first concession agreement of republican significance.
Who is responsible for the concession of assets
The relevance of the amendment clarifying the definition of “concessor” is explained by the authors from the Ministry of National Economy using the example of a concession agreement for the construction and operation of the Greater Almaty Ring Road (BAKAD).
The competition for the project was held in 2014–2015, then, according to the law, the grantor was the Republic of Kazakhstan, on behalf of which the government or akimat, as well as government agencies authorized by them, act.
In December 2017, the definition of grantor was changed. In the current version, the concept of “concessor” means “state bodies of the Republic of Kazakhstan that have entered into concession agreements in accordance with this Law and (or) a direct agreement with the creditors of the concessionaire.”
The concession agreement for the construction and operation of BAKAD was concluded in February 2018. BAKAD's creditors - EBRD, EDB, IDB - then set a condition: to return the definition of the grantor as the Republic of Kazakhstan. Failure to comply with this condition may result in termination of the concession agreement.
A partner at the law firm GRATA International agrees that the amendment will eliminate confusion in the legislationShaimerden Chikanaev. “From the point of view of any bank, of course, there is a significant difference whether the grantor is the Republic of Kazakhstan, which has the budget of the entire country, or some ministry that de facto has no property of its own,” he says.
Published on the portalkursiv.kz.
Shaimerden Chikanaev, Partner, GRATA International Kazakhstan.
