��������Ƶ

A Concession Agreement gives private companies the right to operate public assets or provide public services for a set period. In the Philippines, these contracts are common for infrastructure projects like toll roads, airports, and power plants under the Build-Operate-Transfer Law (RA 6957, as amended by RA 7718).

The government keeps ownership while letting private partners manage and profit from the asset. The agreement spells out key terms like fees, maintenance standards, and service levels. After the concession period ends - usually 25 to 50 years - the asset returns to government control. This setup helps the Philippines develop infrastructure without spending public funds upfront.

Use a Concession Agreement when your private company aims to operate major public infrastructure in the Philippines. This arrangement works especially well for capital-intensive projects like airports, seaports, highways, or power plants where the government lacks immediate funding but wants to maintain long-term ownership.

The timing is right when you're ready to invest substantial resources into developing and managing public assets over decades. Under the PPP framework, these agreements become essential for projects exceeding ₱2 billion, particularly when you need clear terms for revenue sharing, performance standards, and eventual asset transfer back to the government. Consider this path when traditional procurement or privatization doesn't align with public interest requirements.

• BOT Concessions: Used for major infrastructure like highways or airports, where private partners build and operate facilities before transferring them back
• ROT Concessions: Focuses on rehabilitating existing infrastructure, common for upgrading ports or power plants
• Service Concessions: Grants rights to provide public services like water distribution or waste management
• Natural Resource Concessions: Used for mining or forestry rights, with specific environmental protection requirements
• Hybrid Concessions: Combines multiple features, often used for complex projects involving both infrastructure development and service delivery

• Government Agencies: The PPP Center, Department of Public Works, or local government units that own the assets and grant concession rights
• Private Concessionaires: Companies or consortiums investing in and operating the public infrastructure projects
• Legal Teams: Government and private sector lawyers who draft and negotiate detailed concession terms
• Financial Institutions: Banks and lenders providing project financing, often requiring specific provisions in the agreement
• Regulatory Bodies: Agencies like NEDA and ICC that review and approve major infrastructure concessions

• Project Scope: Define the infrastructure asset, service area, and operational requirements clearly
• Financial Model: Prepare detailed revenue projections, cost estimates, and proposed tariff structures
• Technical Studies: Gather feasibility studies, environmental impact assessments, and engineering plans
• Regulatory Clearance: Check required permits and secure necessary approvals from NEDA and other agencies
• Performance Standards: Establish clear metrics for service quality, maintenance, and operational efficiency
• Risk Allocation: Map out which party handles specific risks like construction delays or force majeure events

• Parties and Assets: Clear identification of the government agency, private concessionaire, and infrastructure covered
• Grant of Rights: Specific rights, responsibilities, and operational scope transferred to the concessionaire
• Term and Extensions: Duration of the concession, conditions for renewal or early termination
• Financial Terms: Revenue sharing, tariff mechanisms, performance bonds, and government guarantees
• Performance Standards: Measurable service levels, maintenance requirements, and reporting obligations
• Risk Allocation: Clear distribution of operational, financial, and force majeure risks
• Handover Terms: Conditions for asset transfer back to government at concession end

A Concession Agreement differs significantly from a Business Acquisition Agreement in several key ways. While both involve transferring operational control, they serve distinct purposes in Philippine business law.

• Ownership Structure: Concession Agreements maintain government ownership while temporarily transferring operational rights. Business Acquisition Agreements involve complete transfer of ownership and control
• Duration: Concessions have fixed terms (typically 25-50 years) with clear return provisions. Acquisitions are permanent transfers with no built-in reversion rights
• Regulatory Oversight: Concessions require continuous government supervision and compliance with public service standards. Acquisitions face standard corporate regulations only
• Purpose: Concessions focus on public infrastructure and service delivery while maintaining state interests. Acquisitions primarily serve private business objectives and market expansion