REPUBLIC OF LITHUANIA
LAW ON CONCESSIONS
10 September 1996 No I-1510
(As last amended on 16 June 2009 – No XI-302)
Vilnius
CHAPTER I
GENERAL PROVISIONS
Article 1. Purpose of the Law
1. This Law defines the concept of concession in the Republic of Lithuania, the subject of concession contract, the procedure for choosing the concessionaires and the award procedure, the powers, rights and duties of the awarding authorities and concessionaires, the contents of concession contracts and establishes the relations pertaining to that.
2. The regulation of the public works concession has been harmonised by this Law with the legal acts of the European Union specified in the Annex to this Law.
Article 2. Definitions
1. ”Concession” means the authorisation granted under this Law by the awarding authority to the concessionaire in compliance with the concession contract under the terms and conditions set forth therein to engage in the economic activity and commercial connected with the design, construction, development, renovation, transformation, repairs, management, use and/or maintenance of infrastructure objects, to provide public services, manage and/or use state-owned, municipal property (including the exploitation of mineral resources) where the concessionaire assumes under the concession contract all or part of the operating risk and undertakes the relevant rights and duties, while the consideration of the concessionaire for the activity consists solely of the granting of the right to engage in the relevant activity and income from the activity or the granting of the right and income from the activity together with a consideration paid to the concessionaire by the awarding authority in light of the risk assumed by the latter.
2. “Concession contract” means a written contract concluded between the awarding authority acting on behalf of the state or municipality and the concessionaire, establishing the rights and duties of the awarding authority and the concessionaire pertaining to the concession.
3. “Subject of concession contract” means the economic and commercial activities carried out by the concessionaire in the areas specified in Article 3 of this Law, relating to the design, construction, development, renovation, transformation, repairs, management, use and/or maintenance of infrastructure objects, provision of public services, management and/or use of the property managed and/or used by right of ownership or trust by the state or a municipality or the persons controlled by the state or the municipality (including the exploitation of mineral resources).
4. “Concessionaire” means any entity of the Republic of Lithuania or a foreign state awarded a concession by the appropriate awarding authority in compliance with this Law. The following shall be considered as entities: an enterprise of any type, a consortium, an association, an agency, an organisation or an entity of another legal form or type established and operating under the applicable laws of the Republic of Lithuania or a foreign state. A natural person shall not be considered as an entity.
5. “Tenderer” means any entity or entities who have expressed interest, in the manner prescribed by Section Two of Chapter III of this Law, in participation in the tender and/or have submitted preliminary non-binding or detailed binding tenders under the appropriate tendering conditions.
6. “Tendering conditions” means, according to Section Two of Chapter III of this Law, the conditions for the award of a concession worked out, approved and published by the awarding authority.
7. “Awarding authority” means the authority which, within the remit of its competence and powers established by the legal acts of the Republic of Lithuania, is responsible for the appropriate functions or fields of activities that may be exercised and ensured by awarding concessions: the Government of the Republic of Lithuania or an institution authorised by it where the concession is awarded on behalf of the state or the municipal executive authority where the concession is awarded on behalf of the respective municipality.
8. “Public works concession” means the concession for the award whereof a concession contract for works indicated in Article 2(26) of the Republic of Lithuania Law on Public Procurement is concluded between the concessionaire and the awarding authority which meets the requirements of subparagraphs 1, 2 or 3 of Article 4(1) of the Republic of Lithuania Law on Public Procurement. According to the contract the consideration for the concessionaire for the works to be carried out shall consist either solely of the right to exploit the infrastructure object which is the result of such works or of this right together with payment. For the purposes of this Law public works concession shall only be the concession whose estimated contract value established under Article 9 of the Republic of Lithuania Law on Public Procurement is not less than the international works procurement value established under Article 11(1)(5) of the Republic of Lithuania Law on Public Procurement which may be adjusted in accordance with the procedure laid down in Article 11(3) of the Republic of Lithuania Law on Public Procurement.
9. “Affiliated undertakings” means any undertakings over which the concessionaire may exercise a dominant influence or which may exercise a dominant influence over the concessionaire or which, in common with the concessionaire, are subject to the dominant influence of another undertaking by virtue of ownership, financial participation or the rules which govern it.
10. “Persons controlled by the state or a municipality” means the legal persons of any leg1al form over which the state or the municipality may exercise, directly or indirectly, a dominant influence.
11. “Control” means the relations whereby a person exercises a dominant influence over another person, that is, when, directly or indirectly in relation to another person, it:
2) holds the majority of the votes attaching to shares or other equities issued by the controlled person , or
Article 3. Subject of the Concession Contract
1. The subject of concession contracts may be any of the activities and functions listed in paragraphs 2 and/or 3 of this Article.
2. Pursuant to the concession contract the concessionaire shall be granted an authorisation to engage in the economic and commercial activity connected with the design, construction, development, renovation, transformation, repairs, management, use and/or maintenance of infrastructure objects or to provide public services in the following areas:
1) energy, including heat and electric energy, oil and natural gas extraction, transmission, distribution, supply;
4) waste water, including waste water collection, transportation and treatment, and sludge treatment;
5) utilisation, recycling and management of waste as provided for in the Law of the Republic of Lithuania on Waste Management;
3. Under concession contracts the concessionaires may be transferred for management and/or use the property managed and/or used by the right of ownership or trust by the state, a municipality and/or the persons controlled by the state or the municipality, including property which under the Constitution of the Republic of Lithuania belongs by the right of exclusive ownership to the State, i.e. subsoil, as well as internal waters, forests, parks, roads, historical, archaeological and cultural objects of national significance. Rights to the use of the continental shelf and/or economic zone in the Baltic Sea to which the state has exclusive rights as well as the underground resources provided for in the Republic of Lithuania Underground Law (including mineral resources), underground caves and other natural resources may be granted under concession contracts. Where state-owned land or municipal land and/or another state-owned or municipal property is necessary for executing the project of concession awarded by way of an open procedure and this is provided for in the concession tendering conditions, the concessionaire may be granted the right to the lots of land referred to above and/or another state-owned or municipal property without an auction, by concluding with the concessionaire land lease contracts or other contracts provided for by laws. Short- and long-term movable assets of the state, a municipality and/or the persons controlled by the state or the municipality which is managed and/or used by the right of ownership or trust and which will be subject to complete depreciation during the period of validity of a concession contract according to the established procedure may under the concession contract be sold to the concessionaire at a price corresponding to the value of the property established according to the procedure laid down by the Republic of Lithuania Law on Basics of Property and Business Valuation. The right of ownership to another property of the state, a municipality and/or the persons controlled by the state or municipality may not be transferred to the concessionaire. Under the concession contract the concessionaire may be transferred the rights and duties of the persons controlled by the state and/or a municipality arising from the transactions concluded by these persons under the terms and conditions and according to the procedure laid down in the concession contract.
4. The concession contract may provide for the concessionaire’s commitment to create new property or to manage and/or use the existing property held by the concessionaire by the right of ownership or trust. The terms and conditions of management and/or use of such property as well as of transferring the title thereto to the awarding authority or the persons controlled by the state or a municipality and of retention of such title shall be established by the parties in the concession contract taking into consideration the terms and conditions of the concession tender.
5. The title to or the right to manage and/or use state-owned or municipal property entered on the list of objects subject to privatisation under the Republic of Lithuania Law on the Privatisation of Property Owned by the State or Municipality shall not be transferable to the concessionaire under the concession contract. State or municipality owned property, for the management and/or use whereof concession contracts have been concluded, shall not be subject to privatisation during the contract validity period, unless the concession contracts establish otherwise.
6. In the cases when the concessionaire is transferred the property managed and/or used by the right of ownership or trust by the persons controlled by the state or a municipality, a decision must be taken by the controlled person prior to the publication of tendering conditions on the participation in the concession contract and transfer to the concessionaire of a certain property managed and/or used by it by the right of ownership or trust. Where the concession is awarded without the tendering procedure, this decision must be taken at any time prior to the signature of the concession contract.
7. In the cases specified by this Article, the property managed and/or used by the right of ownership or trust by the state, a municipality and/or the persons controlled by the state or municipality and taken over by the concessionaire for management and/or use must be insured under the terms and conditions laid down in the concession contract.
8. The property managed and/or used by the right of ownership or trust by the state, a municipality and/or the persons controlled by the state or the municipality and transferred to the concessionaire under the concession contract for management and/or use must be managed and/or used in order to meet the interests or needs of more than one social group or individual and for the property to serve public needs.
9. Upon the expiry of the validity of the concession contract, the property managed and/or used by the right of ownership or trust by the state, a municipality and/or the persons controlled by the state or municipality and managed and/or used by the concessionaire under the concession contract must be returned in a condition which is not worse than the one in which the concessionaire received it allowing for normal depreciation or in a condition specified in the concession contract.
Article 4. Limiting Concessions in Certain Sectors of Economic and Commercial Activity
Entities who are prohibited to invest in the sectors specified in Article 8(2) of the Republic of Lithuania Law on Investment shall not be awarded concessions to carry out economic and commercial activities in the above areas.
Article 5. Principles of Awarding Concessions
1. Concessions shall be awarded following the procedure set forth in this Law, the Civil Code and other laws of the Republic of Lithuania.
2. The awarding authority which under the laws of the Republic of Lithuania and in accordance with its competence and remit is responsible for a relevant function or sphere of activity that may be the subject of concession contract shall be hereunder granted the right to award the concession by concluding the concession contract (as well as other ancillary and relating contracts, including contracts with the entities financing the concession project) for the performance of the function or for carrying out activities in the relevant area. Decisions relating to concessions whereunder the Republic of Lithuania assumes material property obligations shall be taken by the Seimas of the Republic of Lithuania on the recommendation of the Government of the Republic of Lithuania. For the purposes of this Law any property obligation (including potential civil liability arising under the concession contract) which exceeds LTL 200 million shall be deemed as material.
3. The awarding authority must form a commission for the organisation of the awarding of the concession and procedures of the awarding of the concession. The awarding authority forming the commission shall have the right to invite experts who could advise on the issues related to the awarding of the concession and requiring special knowledge. Only persons with impeccable reputation may be the chairperson of the commission and commission members. Members of the commission may not disclose any information in relation to procedures of the awarding of the concession, where disclosure of such information would be contrary to the laws, would incur losses or precludes fair competition. In carrying out procedures of the awarding of the concession, the commission shall draft tendering conditions and the concession contract, receive, evaluate and compare the tenders submitted by tenderers, conduct negotiations with concession tenderers, draft the decisions related to the awarding of the concession and apply to the awarding authority which has formed the commission regarding the taking of the decisions as well as perform other functions assigned to it. The awarding authority which has formed the commission shall be liable for actions of the commission.
4. All the obligations assumed by a municipality under the concession contracts concluded on behalf of the municipality regarding the payment of consideration to concessionaires shall be met from funds of the municipality in conformity with the limits on borrowing as established by the Seimas of the Republic of Lithuania for municipalities for the relevant year. The property, rights and obligations of the awarding institution and the concessionaire shall be accounted in conformity with requirements of the legal acts applicable to accounting, State debt and government statistics.
5. The awarding authority must, prior to the publication of a concession tender notice, and where the concession is awarded without tendering – prior to concluding the concession contract, consider the expediency of the concession and assess its potential benefit for public needs. When considering and assessing the expediency of the concession and its potential benefit for public needs, the awarding authority must perform a thorough analysis of the economic and social benefit of the specific concession to be awarded for public needs, prepare the quantitative and qualitative conclusions based on calculations and comply therewith when taking decisions on the awarding of the concession.
Article 6. Procedure for Awarding Concessions
Concessions shall be awarded following open public tendering procedure provided for in Section Two of Chapter III of this Law except in cases provided for in Section Three of Chapter III of this Law when concessions may be awarded without the tendering procedure.
Article 7. Information about Authorisations and Licences
During the concession contract negotiations the awarding authority shall submit information about the authorisations or licences issued by state and/or municipal authorities necessary for implementing the concession contract.
Article 8. Phases of Tendering
1. Tendering for the award of the concession shall be held in the following phases:
2. 2. Tender notice for the award of a concession may be published and the tendering procedure may be carried out exclusive of the tendering phases provided for in subparagraphs 2 and/or 3 and 4 of paragraph 1 this Article only by a decision of the Government of the Republic of Lithuania where the concession is awarded on behalf of the state or a municipal council where the concession is awarded on behalf of the appropriate municipality.
Article 9. Tendering Conditions
1. In every case of tendering for a concession the awarding authority shall draw up and approve, in compliance with paragraph 2 of Article 6.947 of the Civil Code of the Republic of Lithuania, the conditions of tendering where the following shall be specified:
1) the subject of the proposed concession and characterisation of the concession project, including description of technical conditions of the concession project and requirements for its performance, security and environmental protection requirements, specification of the basic contract conditions, including the risk assumed by the concessionaire under the concession contract and related to such activity, appropriate rights and duties, requirements securing the performance of the concession contract, grounds for termination of the concession contract;
2) whether or not the pre-selection of tenderers will be held and in case it will, where, when and what documents they have to submit as well as the qualification requirements the potential tenderers have to comply with in order to be selected for the submission of tenders, as provided for in Article 10 of this Law, the pre-selection period and method, time and place of notification of the pre-selection results;
3) whether the tenderers must submit preliminary non-binding tenders and, if yes, the time and place when and where they shall submit such tenders and the required contents of the tenders as specified in Article 11 of this Law;
4) the time and place of the submission of detailed binding tenders and the required contents as specified in Article 13 of this Law;
5) time of evaluation of the tenderers’ tenders and the evaluation criteria as indicated in Article 14 of this Law;
6) cases when the tenders may be considered as failing to meet the requirements of tendering conditions;
2. Unless tendering conditions provide for the pre-selection of tenderers, the publication of tendering conditions shall be an invitation to submit detailed binding tenders; where tendering conditions provide for the submission of preliminary non-binding tenders – an invitation to first submit preliminary non-binding tenders.
3. Tendering conditions shall be published in the supplement Informaciniai pranešimai to the official gazette Valstybės žinios. By the decision of the awarding authority notice of the tendering conditions may be additionally published in the international, Lithuania’s national or regional press or other mass media. Full text of the tendering conditions approved by the awarding authority or clear and accurate reference as to the place and time when and where the relevant parts of the tendering conditions will be accessible to any interested person shall be published in such notice and the purchasing price (where set) of the documents referred to in the notice and specifying the tendering conditions shall be indicated, provided, however, that the text of the notice always contains a short characterisation of the subject and project of the proposed concession.
4. Should the awarding authority decide to change the tendering conditions or to cancel the tendering procedure, it shall have the right to do so during the first half of the period following the publication of the tendering conditions in compliance with paragraph 2 of this Article until the date of submission of the detailed binding tenders. The awarding authority shall have the right to extend the time limit for submission of documents to participate in the pre-selection of tenderers and preliminary non-binding and/or detailed binding tenders at any time prior to the expiry of the established time limit and after the expiry thereof subject to an authorisation of the controlling authority, where no tender is received. Notice of the change of the tendering conditions and/or extension of the fixed time limits shall be published in conformity with the requirements specified in paragraph 2 of this Article in the same manner as the tendering conditions.
Article 10. Pre-selection of Tenderers
1. Where the pre-selection of tenderers is provided for in the tendering conditions, the tenderers must express interest in participating in the tendering procedure indicating that they fulfil the pre-selection criteria which have been established by the awarding authority and which may be all or part of the following conditions:
2) possession, during the pre-selection procedure, of equipment and other means necessary for all phases of activities to be carried out under the proposed concession contract or feasible possibility of possession thereof after the conclusion of the concession contract;
3) possession, during the pre-selection, of financial resources (own or borrowed funds) for all phases of activities to be carried out under the proposed concession contract or feasible possibility of possession thereof after the conclusion of the concession contract;
2. Upon establishing that the tenderers fulfil the pre-selection criteria, the awarding authority shall compile an alphabetical list of the tenderers to be invited to submit detailed binding tenders or, where this is provided for by the tendering conditions, to submit preliminary non-binding tenders. The list shall be published in the supplement Informaciniai pranešimai to the official gazette Valstybės žinios and otherwise if provided for by the tendering conditions.
3. Except where the conditions of the tendering procedure provide otherwise in respect of the pre-selection of tenderers, in case only one tenderer fulfils the pre-selection criteria, the awarding authority shall invite the tenderer to submit a detailed binding tender according to the procedure laid down in the tendering conditions, omitting the submission of a preliminary non-binding tender.
4. The awarding authority shall reject requests and tenders where:
1) the tenderer has an unspent or unexpunged conviction for the criminal acts defined in Chapters XXXI and XXXII of the Criminal Code of the Republic of Lithuania;
2) the tenderer is bankrupt, is being wound up, has entered into an arrangement with creditors or has suspended or limited business activities or who is in any analogous or similar situation under the laws of the country of registration;
3) the tenderer is the subject of court or out of court proceedings for a declaration of bankruptcy or for compulsory winding up or for an arrangement with creditors or of any analogous proceedings under the laws of his country of registration;
4) the tenderer has been guilty of grave professional misconduct proven by any legal means which the contracting authority can justify;
5) the tenderer has not fulfilled obligations relating to the payment of social insurance contributions in accordance with the legal provisions of the country of registration or the country in which the contracting authority is established;
6) the tenderer has not fulfilled obligations relating to the payment of taxes in accordance with the legal provisions of the country of registration or the country in which the contracting authority is established;
Article 11. Submission of Preliminary Non-binding Tenders
1. Where the concession project is of a very complex nature or of importance to the state or the respective municipality as well as in other cases, the awarding authority may, at its own discretion, lay down in the tendering conditions that the tenderers must first submit preliminary non-binding tenders and only thereafter detailed binding tenders.
2. The requirements for the content of the preliminary non-binding tenders shall be specified in the tendering conditions. Such requirements shall be drawn up in compliance with the requirements set for the content of detailed binding tenders as prescribed in Article 13(2) of this Law and in the tendering conditions, except that the extent required by the preliminary non-binding tenders may be lower than that of detailed binding tenders.
Article 12. Evaluation of Preliminary Non-binding Tenders
1. The awarding authority shall assess whether or not the tenderers’ preliminary non-binding tenders meet the requirements set for them in the tendering conditions and shall give the tenders which meet the requirements a favourable evaluation without ranking them.
2. The awarding authority shall compile an alphabetical list of the tenderers whose preliminary non-binding tenders have been given a favourable evaluation and shall invite them to submit detailed binding tenders. The list of the tenderers shall be published in the supplement Informaciniai pranešimai to the official gazette Valstybės žinios.
3. If the awarding authority favourably evaluates only one tenderer’s preliminary non-binding tender, it may open negotiations with the tenderer according to the procedure established in Article 16 of this Law provided that the tenderer agrees that his preliminary non-binding tender be considered as a detailed binding tender. In such case the tenderer shall be considered to have submitted a detailed binding tender and the tender shall be considered to have been recognised as the successful tender in the manner set forth in the tendering conditions. In case the tenderer refuses to give his consent to his preliminary non-binding tender being considered as a detailed binding tender, he shall be invited to submit a detailed binding tender according to the procedure prescribed by the tendering conditions.
Article 13. Submission of Detailed Binding Tenders
1. Detailed binding tenders must address the technical, financial and commercial issues formulated in the tendering conditions and present the information required under the conditions of tendering which in all cases must cover:
1) proposals and comments with regard to the technical specifications of the concession project and requirements to its implementation, including the safety and environmental protection requirements provided for by the awarding authority in the tendering conditions;
2. The tenderers shall have the right to request that the awarding authority explain the tendering conditions and present any other additional information relating to tendering. The awarding authority must immediately respond to the requests and supply as much information as permitted under the tendering conditions and provisions of laws. The awarding authority must ensure that all tenderers are provided an opportunity to receive the same information in good time and that the manner of supply of such information is identical for all the tenderers. All the tenderers must be set an equal time limit for submitting their tenders and this must be specified in the tendering conditions.
3. As necessary, the awarding authority may hold meetings with the tenderers in order to explain or discuss questions relating to tenders. When organising such meetings the awarding authority must ensure that all tenderers are supplied identical information.
4. Where the tendering conditions provide for the submission of preliminary non-binding and detailed binding tenders, the conditions proposed in the tenderers’ detailed binding tenders shall not be worse, according to the criteria of evaluation established in the tendering conditions, than those proposed in the preliminary non-binding tenders, unless otherwise provided by the tendering conditions.
Article 14. Evaluation Criteria
1. The awarding authority shall, taking into account the requirements set forth in this Article, the objectives to be reached as set in the proposed concession contract and other material circumstances, set in the tendering conditions the criteria for evaluation and comparison of the tenderers’ detailed binding tenders. The awarding authority must apply the criteria fairly, without discrimination against any tenderer.
2. The criteria for evaluation and comparison of technical aspects of the tenders submitted by the tenderers may include the following requirements:
3. The criteria for evaluation and comparison of financial and commercial aspects of the tenders submitted by the tenderers may include the following requirements:
1) the value of the amounts which the concessionaire proposes to set and collect as remuneration for the provided public services or to collect as local fees and charges under the concession contract, taking into account the planned time and periodicity of payment of such amounts;
2) the value of any payments to be made by the awarding authority under the concession contract, taking into account the planned time and periodicity of payment of such amounts;
3) the value of any payments to be made by the concessionaire under the concession contract, taking into account the planned time and periodicity of payment of such amounts;
4) the costs related to design and construction activities, annual exploitation and maintenance costs, costs of proposed financial arrangements;
5) the extent of financial support requested from the state or the appropriate municipality by the awarding authority or any other state or municipal authority, should any be requested;
6) the feasibility and specifics of the proposed financing in accordance with the submitted documents relating thereto;
Article 15. Evaluation of Detailed Binding Tenders
The awarding authority shall assess the received tenderers’ detailed binding tenders according to the evaluation criteria set in the tendering conditions and compile a list of tenderers ranking them according to the given evaluation. The list shall be published in the supplement Informaciniai pranešimai to the official gazette Valstybės žinios and otherwise if provided for by the tendering conditions. If only one detailed binding tender meeting the requirements set in the tendering conditions is received, a notice of the tenderer who submitted the tender shall be published in the manner prescribed by this Article and the awarding authority shall commence negotiations with the tenderer following the procedure established in Article 16 of this Law.
Article 16. Negotiations and Conclusion of a Concession Contract
1. The awarding authority shall invite the tenderer recognised as highest ranking in the manner set in Article 15 of this Law to take part in negotiations. During the negotiated procedure there may be no derogations from the requirement that the concessionaire fulfil the conditions of technical, financial and commercial nature prescribed by the tendering conditions. Upon successfully completing negotiations with the tenderer recognised as highest ranking, the awarding authority shall award the tenderer the concession contract (and, as necessary, awarding the contract to the undertaking established by him for the purpose) as necessary concluding other ancillary and relating contracts, including contracts with entities funding the concession project.
2. In addition to the tenderer whose tender has been recognised as highest ranking, the awarding authority may also invite the tenderer ranking second to take part in the negotiations, provided that its tender is similar to that of the tenderer whose tender has been recognised as highest ranking. In such case, upon completion of negotiations with both tenderers, the awarding authority shall award the concession contract (as necessary, concluding other ancillary and relating contracts, including contracts with entities funding the concession project) to the tenderer (and, as necessary, to the undertaking established by him for the purpose) with whom more favourable terms, judging by the tender evaluation criteria set by the tendering conditions, have been agreed.
3. Should the negotiations with the highest ranking tenderer cease and if the second ranking tenderer is not invited, according to paragraph 2 of this Article, to take part in the negotiations, the awarding authority may invite other tenderers to participate in the negotiations according to their ranking in the manner set by Article 15 of this Law; however only one tenderer shall be at a time invited to take part in the negotiations. Upon successfully completing negotiations with such tenderer, the awarding authority shall award the concession contract to the tenderer (and, as necessary, to the undertaking established by him for the purpose), if necessary concluding with the tenderer other ancillary and relating contracts, including contracts with entities funding the concession project.
4. The awarding authority shall ensure that the tenderer/tenderers who takes/take part in the negotiations for the award of the concession contract is/are aware of the manner in which negotiations for and awarding of the concession contract shall be performed.
5. The awarding authority shall be authorised to make all such arrangements and take all such actions as may be appropriate, even though directly not provided for by the tendering conditions, in order to fully harmonise the provisions of the concession contract and any other ancillary relating documentation, provided that all tenderers taking part in the negotiations are treated fairly and without discrimination.
Article 17. Circumstances under which Concessions may be Awarded without the Tendering Procedure
The awarding authority may award a concession without the tendering procedure without observing the procedure set in Section Two of Chapter III of this Law in the presence of at least one of the following circumstances:
1) where there is an urgent need for infrastructure which could not have been foreseen in advance and/or a need for ensuring continuity in the provision of public services, and under the unforeseen circumstances it is not possible to hold a tendering procedure for awarding the concession;
3) where, due to the possessed exclusive rights to provide public services as granted by a legal act which is compliance with the Treaty establishing the European Community, there is only one source reasonably capable of providing the public services in relation to which the concession is to be awarded and there is no other alternative;
4) where the tendering procedure has already been launched but no tenders satisfying the tendering conditions have been received and, in the opinion of the awarding authority, the use of a further tendering procedure would not result in the award of the concession contract. In such case the decision to award the concession without an invitation to tender must be taken not later than within 6 months after the completion of the tendering procedure and the concession shall be awarded without the tendering procedure under the same conditions as those of the previously held tendering;
5) where a valid concession contract is terminated due to the non-performance or improper performance of the concession contract by the concessionaire, which constitutes a material breach of the contract, and a new concession contract is awarded with respect to the subject matter of the concession to a different concessionaire invited by the banks or other financial institutions who have advanced loans to the defaulting concessionaire and one of the principal purposes for such new contract is to enable such loans to be discharged from revenues payable to the new concessionaire under the concession contract;
6) where at least 50 % of the concession project shall be financed by a foreign institution or state on the terms more favourable than the market terms valid in Lithuania at the moment the of the award of the concession and the financing institution or state has set requirements for the potential concessionaires that are met only by a certain category of entities as well as requirements for the selection of the concessionaire which differ from the tendering procedure prescribed by this Law;
7) for additional works or services not included in the project initially considered or in the concession contract first concluded but which have, through unforeseen circumstances, become necessary when such additional works or services cannot be technically or economically separated from the original concession contract without great inconvenience to the awarding authority, or where such works or services, although separable from the execution of the original concession contract, are strictly necessary for the completion of the concession contract. Such contract for additional works or services may only be concluded with the concessionaire to whom the original concession contract was awarded and the aggregate amount of ancillary contracts may not exceed 30 % of the amount of the main concession contract.
Article 18. Requirements Applicable when Concessions are Awarded Without the Tendering Procedure
1. The awarding authority which intends to award the concession without the tendering procedure shall make known its intention by means of a notice published in the supplement Informaciniai pranešimai to the official gazette Valstybės žinios, at the same time notifying of the reasons for awarding the concession without tendering. Information shall not be published if it constitutes a state or official secret.
2. When awarding a concession and concluding the concession contract (as well as concluding other ancillary and relating contracts, including contracts with the entities funding the concession project) without the tendering procedure, the awarding authority shall take all appropriate measures to secure in the contract the best possible protection of the public interest and the most favourable terms of the concession contract for the awarding authority, taking into account all relevant factors, including the degree of risk to be assumed by the concessionaire, the possibility to receive alternative tenders from other potential concessionaires, complexity of the concession project, any concerns of confidentiality, national security and defence and other issues related to the circumstances provided for in Article 17 of this Law.
Article 19. Notice of the Decision to Award a Concession Contract
The awarding authority must ensure that the notice of the decision regarding the award of any concession be published in the supplement Informaciniai pranešimai to the official gazette Valstybės žinios. The notice shall indicate the concessionaire’s name and the essential characteristics of the concession contract, however, no notice shall be published of the information constituting a state or official secret. The awarding authority shall send the text of the notice for publishing in the publication indicated in this Article not later than within 3 working days after the award of the concession contract.
Article 20. Settlement of Disputes Relating to the Award of Concessions
Any tenderer in the tendering procedure held according to this Law to which the award of the concession contract was refused as well as other persons who believe that their rights were violated in the award of the concession shall be entitled to defend their rights in court in accordance with the laws of the Republic of Lithuania. Such claims must be submitted to the court within one-month period of limitation from the day of publication of the notice of the decision to award the concession contract, as provided for in Article 19 of this Law.
Article 20(1). Specific Features of the Award of Public Works Concession
1. Where the subject of a concession contract is works and provision of public services, the concession shall be deemed to be a public works concession provided that the main subject of the concession is works while the provision of services is only ancillary to the concessionaire’s commitment to perform works. A concession the main subject of concession contract whereof is provision of public services, while works are ancillary to the concessionaire’s commitment to provide public services, shall not be deemed to be a public works concession.
2. When awarding a public works concession the awarding authority shall organise the tendering procedure in the manner set forth in Section Two of Chapter III of this Law and publish a tender notice in the Official Journal of the Office for Official Publications of the European Communities and in the supplement Informaciniai pranešimai to the official gazette Valstybės žinios as well as in the Central Portal of Public Procurement. When awarding a public works concession the awarding authority shall fix a time limit for submitting tenders that shall not be shorter than 52 days from the date of dispatch of the notice from the Public Procurement Office; however, where notices are drawn up and transmitted by electronic means in accordance with the established format, the time limit for receipt of a tender may be reduced by seven days. Where, for whatever reason, the contract documents or part thereof, although requested in good time, have not been supplied within the time-limits fixed in Article 27 of the Republic of Lithuania Law on Public Procurement, or where it transpires after the submission of contract documents that tenders can be made only after a visit to the site or after on-the-spot inspection of the information contained in the contract documents, the awarding authority shall extend the time limits for the receipt of tenders so that all interested entities are aware of all the information needed to produce a tender. The information which must be indicated in notices and the model notice as well as requirements of the notice shall be determined by Commission Regulation (EC) No 1564/2005 of 7 September 2005 establishing standard forms for the publication of notices in the framework of public procurement procedures pursuant to Directives 2004/17/EC and 2004/18/EC of the European Parliament and of the Council. The notices shall be drawn up and published in conformity with the requirements set in Article 23 of the Law of the Republic of Lithuania on Public Procurement.
3. When awarding the public works concession the awarding authority may set one of the following requirements in the public works concession contract notice:
1) that the concessionaire award contracts representing a minimum of 30% of the total value of the work for which the concession contract is to be awarded to third parties. The tenderers of the tendering procedure for the award of a public works concession must be provided the option to propose that third parties perform the works the value whereof exceeds 30% of the works for which the concession contract is to be awarded. This minimum percentage must be specified in the concession contract; or
4. Requirements of this Article shall not apply where additional services or works not included in the project initially considered or in the public works concession contract first concluded have, through unforeseen circumstances, become necessary for the performance of the services or works described therein, when such additional services or works cannot be technically or economically separated from a first public works concession contract without major inconvenience to the awarding authority, or where such works, although they may be separate from the first public works concession contract, are necessary for the completion of the contract. Such contract for additional works may only be concluded with the concessionaire to whom a first public works concession contract was awarded and the total value of all other ancillary contracts may not exceed 30% of the amount of the main public works concession contract.
5. Where the concessionaire meets the requirements set in Article 4(1) of the Law of the Republic of Lithuania on Public Procurement, set for the purchasing organisation, it must procure all works required for the performance of the concession contract in accordance with the provisions of the Law of the Republic of Lithuania on Public Procurement regulating public procurement of works.
6. In case the concessionaire does not meet the requirements of Article 4(1) of the Law of the Republic of Lithuania on Public Procurement set for the procuring organisation, when awarding contracts for works required for the performance of the concession contract for which the concessionaire intends to subcontract third parties provided that the intended value of such contracts, estimated in accordance with Article 9 of the Law of the Republic of Lithuania on Public Procurement, is not less than the international threshold value specified in 11(1)(5) of the Republic of Lithuania Law on Public Procurement that may be revised in accordance with the procedure laid down in Article 11(3) of the Republic of Lithuania Law on Public Procurement, the concessionaire must make a prior publication of a contract notice, performing procurement procedures and determining the successful tenderer in compliance with the principles of equality of rights, non-discrimination and transparency. The information which must be indicated in notices and the model notice as well as requirements of the notice shall be determined by Commission Regulation (EC) No 1564/2005 of 7 September 2005 establishing standard forms for the publication of notices in the framework of public procurement procedures pursuant to Directives 2004/17/EC and 2004/18/EC of the European Parliament and of the Council. The notices shall be drawn up and published in conformity with the requirements set in Article 23 of the Law of the Republic of Lithuania on Public Procurement. The concessionaire shall fix and indicate in the notice the time limits for receipt of requests to participate and for submission of tenders. The time limit for receipt of requests to participate shall be not less than 37 days, and the time limit for receipt of tenders not be less than 40 days. Where notices are drawn up and transmitted by electronic means in accordance with the established format, the time limit for the receipt of a tender may be reduced by seven days. Where the concessionaire offers unrestrained and direct access by electronic means to all contract documents and any supplementary documents from the date of publication of a works procurement notice, the time limit for the receipt of tenders may be reduced by five more days. The notice shall specify the internet address at which this documentation is accessible. Where, for whatever reason, the contract documents or part thereof, although requested in good time, have not been supplied within the time-limits fixed in Article 27 of the Republic of Lithuania Law on Public Procurement, or where it transpires after the submission of contract documents that tenders can be made only after a visit to the site or after on-the-spot inspection of the information contained in the contract documents, the concessionaire must extend the time-limits for the receipt of tenders so that all interested entities are aware of all the information needed to produce a tender. In the cases which justify the use of a negotiated procedure without prior publication of a contract notice as set forth in Article 56 of the Republic of Lithuania Law on Public Procurement publication of a contract notice shall not be mandatory.
7. The following shall not be regarded as third parties within the meaning of this Article:‑{}‑
1) two or more undertakings which have formed a consortium or any other group in order to obtain the concession contract as one undertaking under this Law;
8. Before the award of a public works concession every tenderer for the award of the public works concession must submit to the awarding authority a comprehensive list of undertakings affiliated to it. In the event of change of the undertakings affiliated to the concessionaire the list must be modified accordingly.
9. The requirements for the award of public works concessions specified in this Article shall not apply to the public works concessions awarded in the cases indicated in Article 10(1)(1), (2), (4), (5) and (7) of the Republic of Lithuania Law on Public Procurement when contracts are concluded on the public procurement of works, also to the procurements performed by the procurement organisations pursuing the activities indicated in Article 70(2) of the Republic of Lithuania Law on Public Procurement when concessions are awarded for the pursuit of such activities.
Article 20(2). Reviewing of Claims and Complaints, Reconciliation, Compensation for Damages
The issues relating to the filing of a claim or lodging of a complaint about the actions or decisions of the procurement organisation, the procedure and time limits for filing and review of claims, the procedure for filing complaints, the issues regarding compensation for damages, reviewing complaints about violations of the EU legislation, reconciliation, attestation and liability of the executives or other authorised persons of the procurement organisation shall be settled in accordance with the provisions of Chapter V of the Republic of Lithuania Law on Public Procurement.
Article 21. Application to a Concession Contract of the Principles of Participation by the Awarding Authority on Equal Grounds and of Freedom of Contract
When awarding a concession contract the awarding authority shall act pursuant to this Law, the Civil Code of the Republic of Lithuania and other laws. All the conditions of the concession contract shall be the object of negotiations between the parties to the contract, however, the concession award requirements set in Chapter III of this Law must be complied with. The awarding authority shall have the same right to agree on the subsequent alteration of the awarded concession contract as when negotiating on the original terms of the contract without altering the main conditions of the contract, provided that the alterations meet the public interests.
Article 21(1). Parties of the Concession Contract
The concession contract shall be concluded by the awarding authority acting on behalf of the state or a municipality and the concessionaire. Where necessary, the concessionaire may, specially for the implementation of a concession project, set up a legal person which must be controlled during the entire period of validity of the concession contract, and the setting up of the legal person must be included in the conditions of the concession tender.
Article 22. Contents of the Concession Contract
1. The concession contract shall comprise the following terms, unless otherwise established by the awarding authority and/or agreed by the parties:
1) nature and scope of works to be performed and/or public services to be provided by the concessionaire as well as other terms characterising the subject of the concession contract;
3) duration of the concession contract and a mechanism, if agreed upon, for its extension; The duration of the concession contract must be such as would ensure the recouping of investment and a reasonable return of investment. The concession contract may be extended, but the total duration of the concession contract may not exceed 25 years;
4) sharing of the risk of the concessionaire and the awarding authority related to obligations of the parties under the concession contract;
6) property rights of the parties to the assets which are to be created, used, modified, managed, maintained or provided (if provided for by the concession contract) or which are the subject of any works or services to be provided pursuant to the concession contract;
7) the period/periods within which any works have to be completed and the terms of extension of the period/periods;
8) such restrictions or conditions as may be agreed on the transfer of a controlling interest in the capital of the concessionaire (or any other changes in the controlling entities of the concessionaire);
9) any payments that any of the parties is required under contract to make to the other (including payments made by the awarding authority in consideration for services provided or work done by the concessionaire) and methods for the adjustment of payments;
10) the rights, if any, of the concessionaire to charge third parties – natural and legal persons the remuneration or any other payment due to the concessionaire for the public services provided under the concession contract, the appropriate methods for the adjustment of the amount of such fixed remuneration or other payment, agreement on collection of the local fees and charges fixed by the respective municipality and the effect of the fixed or adjusted amount of such fees and charges on the rights and duties of the parties to the concession contract;
11) the obligations, if any, of the concessionaire to ensure continued and non-discriminatory access for third parties – natural and legal persons – to the facilities and /or services provided pursuant to the concession contract;
12) the right of the parties to assign their rights under the concession contract, whether by way of security or otherwise and any conditions applicable thereto;
13) any requirements concerning guarantees of performance that the concessionaire may be required to provide;
14) any insurance policies that the concessionaire may be required to maintain in connection with the execution of the concession project;
16) obligations of the parties to provide for use, assign and/or acquire a land plot and/or any other assets necessary for the execution of the concession project and other conditions relating to the obligations;
17) any rights of the awarding authority to monitor the performance of the concessionaire’s obligations, including the right to inspect the assets used and/or created by the concessionaire;
18) any applicable provisions on force majeure and the consequence of changes in law or other changes provided for in the contract, including the parties’ right to seek renegotiation or termination of the concession contract or compensation for damages resulting from such changes, provided such compensation has been agreed upon;
21) the circumstances whereunder the awarding authority or a third party may (temporarily or otherwise) take over the fulfilment of any obligation of the concessionaire for the purpose of ensuring the effective and uninterrupted supply of services in the event of material default by the concessionaire on its obligations under the concession contract;
22) taxation and fiscal matters (to the extent such agreements are allowed under the laws of the Republic of Lithuania and international treaties of the Republic of Lithuania;
23) the relationship between the concession contract (or the parties thereto) or any relating or ancillary contracts (or the parties thereto);
26) in case of a concession contract relating to exploitation of natural resources, provisions relating to description of the geographical area covered by the concession contract, provisions on the determination or payment of royalties and other fees payable for the quantities of natural resources extracted or shared by the concessionaire (to the extent such agreements are permitted by the laws of the Republic of Lithuania and the international treaties of the Republic of Lithuania), the ownership right to the relevant natural resources and arrangements regarding sale of the relevant natural resources;
2. In all cases, the conditions indicated in subparagraphs 1, 3, 4, 6, 9, 13, 14, 15, 16, 17, 18, 19, 20, 21 of paragraph 1 of this Article must be considered in the concession contract.
Article 23. Security Interests
The concessionaire may, subject to consent of the awarding authority, create security over its rights to any payments by way of pledge of the property rights it has or will acquire under the concession contract, including any payments receivable under the concession contract as well as its other property as well as creating security over its rights in ay other manner provided for by law.
Article 24. Repealed on 27 July 2006.
Article 25. Settlement of Disputes
1. The awarding authority and the concessionaire shall have the right to agree on the procedures for the settlement of disputes arising from or related to the concession contract, including dispute settlement by international or national commercial arbitration, depending on the nature of the concession contract. Where the laws of the Republic of Lithuania so require, the awarding authority must obtain the incorporator’s prior consent to the agreement to settle disputes by arbitration. Where the dispute settlement procedure is not provided for in the concession contract, the disputes of the parties to the concession contract shall be settled by the courts of the Republic of Lithuania in accordance with the Code of Civil Procedure of the Republic of Lithuania.
2. In the event of a dispute between the awarding authority and the concessionaire considered as a foreign investor under the Republic of Lithuania Law on Investments the concessionaire shall be entitled to exercise the rights provided for in Article 6(3) of the Republic of Lithuania Law on Investments.
Article 26. Termination of the Concession Contract
1. Unless the concession contract provides otherwise, either of the parties to the contract may unilaterally terminate the concession contract under the following circumstances:
1) if the other party defaults on the contract, which constitutes a material breach of the contract, whereas the terminating party has made a prior notification of the default on the concession contract to the other party but the defaulting party has not remedied the material breach of the contract in the manner and within the time limit provided for in the concession contract and/or in the notification;
2. Unless the concession contract provides otherwise, in addition to the grounds specified in paragraph 1 of this Article, the awarding authority may unilaterally terminate the concession contract if:
1) the concessionaire submitted materially incorrect data pertaining to its financial position and/or economic and commercial activities to the awarding authority for the concession award and this is disclosed only after the award of the concession contract;
Article 27. Payments under the Concession Contract
1. All payments due to the concessionaire for the services provided under the concession contract and the procedure for effecting the payments shall be provided for or agreed upon in the concession contract in compliance with the requirements of the laws of the Republic of Lithuania.
2. When the subject of the concession contract is provision of public services which are or may be subject to local fees and charges according to the Law of the Republic of Lithuania on Local Fees and Charges, the awarding authority may grant or transfer to the concessionaire the right of collection of such fees and charges from natural and legal persons. In such event the awarding authority shall ensure that the municipal institutions take all the decisions necessary for the implementation of such right.
Article 28. Equality of Concessionaires
Both Lithuanian concessionaires and concessionaires regarded as foreign investors under the Republic of Lithuania Law on Investments shall be equal under law and may not be discriminated against in performing their activities in accordance with this Law and other laws of the Republic of Lithuania.
Version of Article 28(1) before 1 January 2010:
Article 28(1). Authorities in Control of the Awarding of Concessions
Control of the awarding of concessions shall be exercised and execution of concession contracts shall be supervised by an institution authorised by the Government of the Republic of Lithuania and the state and municipal institutions authorised by law within the remit of their competence. The rights and duties of the institution authorised by the Government when performing the functions stipulated in this Article shall be established by the Government. The institution authorised by the Government must provide methodological assistance to awarding authorities on the issues of awarding of concessions.
Version of Article 28(1) after 1 January 2010:
Article 281. Authorities in Control of the Awarding of Concessions
1. Conclusion of the concession contract and compliance with the terms and conditions thereof shall be the responsibility of the awarding authority, which must, in accordance with the procedure laid down by the Rules for Drafting and Implementation of Partnership Projects in the Public and Private Sectors as approved by the Government of the Republic of Lithuania:
1) obtain approval of the Ministry of Finance regarding the financial conditions of the concession contract where a concession is awarded on behalf of the state. Where the concession is awarded on behalf of a municipality, the Ministry of Finance shall provide a separate opinion to the awarding authority of the municipality regarding the envisaged financial conditions of the concession;
2. The Ministry of Finance shall systemise, accumulate and store data on the concessions awarded on behalf of the state and municipality and submit reports to the Government of the Republic of Lithuania on the concluded concession contracts and implementation thereof.
3. The use of the state or municipal funds and property required for implementation of concession contracts, also conclusion of concession contracts and implementation thereof in accordance with the procedure laid down by legal acts shall be verified by state and municipal control institutions.
Article 29. International Treaties
If international treaties of the Republic of Lithuania lay down rules other than those provided for in this Law, the rules of international treaties shall apply.
I promulgate this Law passed by the Seimas of the Republic of Lithuania.
PRESIDENT OF THE REPUBLIC ALGIRDAS BRAZAUSKAS
Annex to the Republic of Lithuania
Law on Concessions
EU LEGAL ACTS IMPLEMENTED BY THE REPUBLIC OF LITHUANIA LAW ON CONCESSIONS
1. Council Directive of 21 December 1989 on the coordination of the laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts (as last amended by Council Directive 89/665/EEC of 18 June 1992) (OJ No L 395, 30. 12. 1989, p. 33; OJ No L 285, 29. 10. 2001, p.1).
2. Council Directive 93/37/EEC of 14 June 1993 concerning the coordination of procedures for the award of public works contracts (as last amended by Directive of the Commission 2001/78/EC of 13 September 2001) (OJ No L 199, 09. 08. 1993, p. 54; OJ No L 285, 29. 10. 2001, p.1).
3. Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors (OJ L 134, 30/04/2004, P.1);
4. Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (OJ No L 134, 30. 04. 2004, p. 114).
5. Commission Regulation (EC) No 1564/2005 of 7 September 2005 establishing standard forms for the publication of notices in the framework of public procurement procedures pursuant to Directives 2004/17/EC and 2004/18/EC of the European Parliament and of the Council (OJ No L 257, 01. 10. 2005, p.1).