Law no. 219/1998 regulates the regime of the concession of goods that are public or private property of the state, county, city or commune on the basis of a contract the duration of which may not be longer than 49 years, under which contract the concessionaire transfers to the concessionee, which acts on its own risk and responsibility, the right and obligation to exploit a certain good, in exchange for a royalty.
The concession contract
The capacity of concessionaire is held by the holders of the right of ownership over goods that represent public property. The capacity of concessionee is held by any individual or legal entity of private law, either Romanian or foreign.
The duration of the concession is set depending upon the period of repayment of the investments that are to be made by the concessionee. Romanian law, while imposing a time of 49 years, also provides for the possibility of extension of the same by means of the mere agreement of the parties, for a period equal to a maximum of half the initial period. Upon the expiration of the concession term, the concessionee is obligated to return the concessioned good unencumbered, including the investments made.
The contractual relation between the concessionaire and the concessionee is based upon the principle of financial balance of the concession, and upon the achievement of a potential equality between the advantages granted to the concessionee and the charges imposed upon the same.
The concession contract contains:
- a statutory part (which contains the clauses set out in the tender book),
- a conventional part (which contains the clauses agreed upon by the parties in addition to the tender book and without contradicting the objectives of the concession, as set forth in the tender book).
It is important to note that this contract is concluded in compliance with, and governed by, Romanian law, regardless of the concessionaire's nationality or citizenship.
The two concession methods set out by Law no. 219/1998 are public tender (either open or open, with pre-selection) or direct negotiation (applicable in the event that the public tender failed to result in the designation of any winner, the concessionaire appointing the concessionee by direct negotiation, in certain conditions).
Romanian legislation also contains provisions that are applicable in particular situations, such as:
- the concession of lands and buildings located in vacant areas;
- the concession of lands for construction, provided for under Law no. 50/1991 regarding
- the authorization of construction erections;
- the concession of the lands with agricultural destination, as provided for under Law no. 268/2001.