Concession Agreement Template for England and Wales

A Concession Agreement lets a government or public authority grant a private company the right to operate specific assets or provide certain services that would typically be under public control. Common examples include running toll roads, managing airports, or operating utility services across England and Wales.

These agreements carefully map out what the private operator can and can't do, how long they can run the service, and how they'll make money from it. The private company usually pays fees to the public authority and takes on the risks of running the service, while the government keeps ultimate ownership and oversight. This approach helps deliver public services efficiently while maintaining public interest safeguards.

Consider using a Concession Agreement when your public authority needs to delegate the operation of infrastructure or services to private companies while maintaining public oversight. This works particularly well for large-scale projects like managing railway stations, operating waste treatment facilities, or running public car parks across England and Wales.

The agreement becomes essential when you need to balance public service quality with commercial viability. It helps protect public interests by setting clear performance standards while giving private operators enough flexibility to run efficiently. Many local councils use these agreements to improve service delivery without increasing their operational burden or capital expenditure.

• BOT Concessions: These agreements let private operators Build, Operate, and Transfer infrastructure back to the government after 20-30 years. Common for major transport projects.
• Service Concessions: Focus on operating existing facilities like leisure centres or parking facilities, with shorter terms of 5-15 years.
• Utility Concessions: Used for water, waste, or energy services, featuring detailed service standards and pricing controls.
• Retail Concessions: Popular in transport hubs, allowing private businesses to run shops or food outlets in public spaces.
• Mixed-Use Concessions: Combine multiple services under one agreement, often used for large regeneration projects.

• Local Authorities: City councils, county councils, and other public bodies who grant concession rights and maintain oversight of public services.
• Private Operators: Companies that take on the operational responsibility and financial risk of running the conceded services or facilities.
• Legal Teams: Specialist infrastructure and public procurement lawyers who draft and negotiate Concession Agreements.
• Technical Advisers: Engineers and industry experts who help set performance standards and maintenance requirements.
• Financial Institutions: Banks and investors who provide funding for concession projects and review agreement terms.

• Project Scope: Define the exact services or assets being conceded, including operational boundaries and performance targets.
• Term Length: Determine the duration of the concession and any extension options, considering asset lifecycle and investment returns.
• Financial Model: Calculate revenue projections, payment mechanisms, and fee structures for both parties.
• Risk Allocation: Map out who bears responsibility for different operational, financial, and legal risks.
• Performance Standards: Set clear, measurable service levels and quality benchmarks.
• Legal Requirements: Check public procurement rules and sector-specific regulations that affect your concession.

• Parties and Services: Clear identification of the public authority, private operator, and detailed scope of conceded services.
• Term and Extensions: Specific duration, start date, and conditions for renewal or early termination.
• Payment Terms: Revenue sharing arrangements, fees, penalties, and price adjustment mechanisms.
• Performance Standards: Measurable service levels, reporting requirements, and monitoring procedures.
• Risk Allocation: Clear distribution of operational, financial, and legal risks between parties.
• Handback Provisions: Asset condition requirements and transfer procedures at agreement end.
• Dispute Resolution: Specific procedures for handling disagreements under English law.

A Concession Agreement differs significantly from an Agency Agreement, though both involve one party acting on behalf of another. Let's explore their key differences:

• Ownership and Control: In a Concession Agreement, the public authority maintains ownership while delegating operational control. With an Agency Agreement, the agent simply represents the principal without taking control of assets.
• Risk and Revenue: Concessionaires take on substantial operational and financial risks, earning revenue directly from service users. Agents typically earn commissions while the principal bears most risks.
• Duration and Scale: Concession Agreements usually span decades and involve major infrastructure or public services. Agency Agreements tend to be shorter-term and focus on specific business activities.
• Regulatory Framework: Concessions must comply with public procurement laws and sector regulations. Agency Agreements primarily follow commercial law and agency principles.