Contracts for the concession of works and services are complex contracts that lend themselves to considerable conflict.
As is known, concessions are essentially characterized because the concessionaire is not remunerated through a certain price, but rather by granting him the right to exploit the work or service and, therefore, transferring the operational risk over them. Given that it is necessary for the concessionaire to have sufficient time to recover the investments made and obtain benefits through the exploitation of the works or services, concessions are usually long-term contracts, which implies that the execution of the contract is especially exposed to problems arising between the parties.
There are many circumstances that can lead to conflicts between the contracting Administration and the concessionaire during the extensive period in which a concession is executed. Conflicts arise routinely, for example, in the application of deductions in the concessionaire’s remuneration, in procedures for imposing penalties or in the approval of contract modifications. Furthermore, the appearance of extraordinary situations that may cause rebalancing of the concession (derived, for example, from unforeseeable risks orfactum principi, among others) or termination of the contract, are also sources of tension between the parties, since the interests at stake are usually important and especially conflicting.
Therefore, it is advisable that both the contracting Administrations and the Concessionaire Companies have specialized legal advice not only in public procurement, but specifically in concession contracts. This is essential not only for the correct protection of the specific interests of the parties in conflict situations, but also for the adequate maintenance of the long-term contractual relationship.
At Araújo&Benetti, based in Palma de Mallorca, we have top-level professionals in public procurement, with extensive experience in legal advice specifically linked to the execution of concession contracts. Our experts advise concessionaires in various sectors (hospital, water supply, infrastructure, etc.) and have participated in numerous penalty proceedings, concession rebalancing claims and resolution proceedings. In addition, they have multiple publications in this field.
