The Constitution provides for the award of concessions for items of property which constitute exclusive state property or over which the State exercises sovereign rights, as well as for activities in which the State has established a monopoly, according to a procedure and under terms established in a special law: the Concessions Act.
The Concessions Act differentiates between three types of concession according to their subject:
1. public works concession;
2. service concession;
3. mining concession.
A public works concession has as its subject the implementation of a construction work (object of the concession) and its post-commissioning management and maintenance, with the compensation consisting of the concessionaire's right to operate the object of the concession or in this right and a payment of compensation by the concession grantor.
A service concession has as its subject the management and maintenance of the object of the concession, with the compensation consisting in the concessionaire's right to operate the object of the concession or in this right and a payment of compensation by the concession grantor. A service concession may furthermore include execution of partial construction and erection work in the cases where there is a need for completion of construction in progress or partial extension/partial rehabilitation of the object.
A mining concession has as its subject the exploitation of natural resources through extraction, which is carried out with financial resources provided by the concessionaire and at its own risk. The Subsurface Resources Act and the Water Act apply in this case as special laws.
Concession objects:
A concession may be awarded for the following objects of public interest:
* Objects declared to constitute exclusive state property;
* Objects that are real estates or parts of real estates constituting public state property or public municipal property, by which economic activity is carried out;
* Objects that are real estates or parts of real estates constituting private state property or private municipal property, by which economic activity is carried out;
* Real estates or parts of real estates constituting property of a body governed by public law, by which economic activity is carried out.
The object of a concession may include the adjoining infrastructure and accessories, whether existing or which are to be built by the concessionaire.
A grantor of the concessions awarded according to the procedure established by the Concession Act is:
* The Council of Ministers: in respect of objects constituting state property;
* The Municipal Council: in respect of objects constituting municipal property;
* A body governed by public law, represented by the authority specified in its instrument of incorporation: in respect of the objects constituting its property. The term "body governed by public law" is defined in Item 11 of § 1 of the Supplementary Provisions of the Concessions Act.
Entities entitled to participate in the concession award procedures are:
Any natural person or legal entity or a combination of such persons may participate in a concession award procedure. Where the participant selected as a concessionaire is a legal entity or a consortium, which is not a merchant, the concession is awarded to a newly incorporated commercial corporation in which the legal entity is a sole owner of the capital or, respectively, the participants in the consortium own the entire capital in the proportion specified in their consortium agreement. In such a case, the concession agreement is concluded with the newly established commercial corporation as the concessionaire, which is bound by the offer of the legal entity or of the consortium, as the case may be. In the cases where the participant selected as a concessionaire is a natural person, the concession is awarded to a newly incorporated commercial corporation in which this person is a sole owner of the capital, or to a sole trader registered by this person.
Stages of a concession award procedure:
1. Adoption of a decision to initiate the procedure;
2. Conduct of an open procedure, a restricted procedure or a competitive interview procedure for the award of a concession;
3. Selection of a concessionaire;
4. Conclusion of a concession agreement.
Types of procedure:
* Open procedure: any person may submit an offer;
* Restricted procedure: includes admission of qualified bidders who meet the requirements. An offer may be submitted only by a bidder who has received an invitation after qualifying.
An electronic auction may be conducted in an open or a restricted procedure, where the technical specifications of the concession are established in detail and the decision to initiate the procedure provides that after initial evaluation of the offers, a concessionaire will be selected by means of an electronic auction.
* Competitive interview: includes admission of qualified bidders who meet the requirements and conducting of interviews with the bidders who have been invited to continue their participation in the procedure after qualifying. An offer may be submitted by a bidder who has been invited after the conducting of interviews with the selected bidders. A competitive interview procedure is conducted only for a public works concession in particularly complicated cases!
* The preparatory activities and the submission of a motion for the award of a concession for an object constituting state property (State concession) are performed by the government minister empowered by a special law. In case there is no empowerment by law, the minister in charge is the one:
- who heads the ministry to which the relevant object has been allocated for management;
- whose second-level spending unit is the institution to which the relevant object has been allocated for management;
- who exercises the right of the State as owner of a public-enterprise merchant to which the object has been allocated for management;
- of Regional Development and Public Works: in the rest of the cases.
Where the object of the concession constitutes municipal property (municipal concession), the motion to the Municipal Council for the award of a concession is prepared by the mayor of the relevant municipality, and in the cases where the object constitutes property of a body governed by public law (public concession) - by the person who manages this body.
Within seven days following the entry into force of the decision to initiate a concession award procedure, an order is issued on approval of: a notice of conduct of the procedure, bidding documentation for an open and restricted procedure or, respectively, a descriptive document for a competitive interview procedure, and a draft concession agreement. The notice is sent in an electronic form for publication on the Internet site of the State Gazette (http://dv.parliament.bg) and for entry in the National Concessions Register (www.nkr.government.bg). The notice is published within five days after its dispatch and is entered in the National Concessions Register within three days after its publication. After that, an announcement of the concession award procedure is published in the mass communication media and/or on the Internet, stating as a minimum the object of the concession and the date and State Gazette issue in which the notice was published.
In the cases of a public works concession of a value of EUR 5,278,000 before VAT, or where the investments envisaged for public works are less than EUR 5,278,000 before VAT, but this threshold can presumably be exceeded on completion of the procedure, the notice is sent electronically to the service publishing the Official Journal of the European Union at the same time as it is sent to the State Gazette.
The concession award procedure is conducted by a commission that is appointed by the Prime Minister (applicable to State concessions), the municipality mayor (applicable to municipal concessions) and the authority managing the body governed by public law (applicable to public concessions). The commission consists of a chairperson, a deputy chairperson and not fewer than three members.
Concession period
A concession is awarded for a period of up to 35 years, without an option for extension.
Appeals
Any decision, action or omission by an authority, by the commission or by an official in the commission award procedure can be appealed by the interested parties regarding its legal conformity before the Commission on Protection of Competition. An appeal does not suspend the concession award procedure, unless an interim measure is imposed. The appeals procedure is established in Chapter Eleven of the Concessions Act.
