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Legislative Know-How: Other Considerations
 
  1. Doubts about the substance of public works concessions and service concessions.

  2. Doubts about the relationship of the Law on concessions for works or services to other law governing the delegation of public functions.

  3. Doubts about the scope of exemptions relating to telecommunications activities.

  4. The issue of exclusive rights to use, the transfer of the telecommunications network after the expiration of the concession and the concessionaire payments to the grantor.

(1) Doubts about the substance of public works concessions and service concessions.

Contract concession lies in the fact that an entrepreneur builds a certain building structures, and then uses these objects and derives revenue from the title (eg.: construction of the stadium and the revenue from ticket sales, the construction of a telecommunications network and revenues from the provision of the services). This concessions may be accompanied by the concessionaire to provide public access other than the assets built by the facility, where such components are necessary to comply with the subject of concession, or how it may be assumed of works (the Law does not, unfortunately, the definition of "subject of concession"). It should be noted that Article 2 paragraphs 2 point 1 of the Act is worded very vaguely and prima facie also permits such an interpretation, that in return for concessions to carry out the subject (the execution of works and their specific effect of the work), the concessionaire may be entitled to use the work of another, as in Article 2 paragraphs. 2 point 1 of the Act is not claimed that this law has affected the construction work, which is the subject of a concession, or the result of the execution of works subject to concessions.

Concerning the concession contract for services from the text of the law, it is not clear what such an agreement should be about, because what is clear from the wording of the language, is not the same from the purpose and the essence of this type of concession. However, in the Article 1, paragraph 2 point 2 of the Act, it is said that the remuneration of the concessionaire is "the right to use the service," which seems to be a misleading translation of the expression "right to exploit the service" used in the Directive 2004/18/EC. The wording of the provision assumpted that the concessionaire as a reward for service concession is replaced by "the right to use the service," which suggests that it is a service provided to it by the grantor. It seems that the intention of the legislature and the actual nature of such a concession is different, namely, the grantor does not provide for the concessionaire of any service for which the latter would have the right to use, but is entrusted to the concessionaire set the task of providing services to third parties, and only in this sense it is the right to use the service by the concessionaire (ie, drawing revenue from certain services that would otherwise be executed by the grantor).

Doubt as to the nature of service concessions are not purely theoretical, as seen in the area of telecommunications. If the interpretation of this provision in the first example of the ways indicated wholesale service would be provided by the grantor, of which the licensee uses in such a way that provides retail services to third parties. While the second would involve the interpretation of such a case in which the grantor to the concessionaire is entrusted with the task of providing retail services to third parties and does not provide any services to the concessionaire.

(2) Doubts about the relationship of the Law on concessions for works or services to other law governing the delegation of public functions.

The Article. 1 paragraph 1 of the Act set out the rules and procedures for the conclusion of the concession contract for works or services to which structural elements indicated in the Article. 1 paragraph 2 of the Act. It seems that the intention of the legislature was that if the entities listed in the Act shall include an agreement corresponding to these elements, it is a concession agreement should be concluded on the principles and procedures of that Act.

The two fundamental relationships of the Act with other provisions relating to the allocation of duties by public entities - first, the law on public procurement and, second, the Act on PPP, need consideration.

The first area would seem that the legislature has sufficiently separated fields of application of both laws, as predicted, that the Public Procurement Act does not apply to public works concessions and service concessions in the meaning of the Act (added paragraph 12 to Article 4 of the Act procurement). Meanwhile the problem and a substantial risk for concessionaires is to determine when an arrangement is referred to the concessions under the Act. It should be noted that one of the three components is extremely indeterminate element described as follows: "The concessionaire shall bear the economic risk of an essential part of the exercise of the concession." In each case, therefore, will be rested  on concessionaires extremely difficult problem concerning to decide, which in this case - including the provisions of the agreement - is the risk of economic performance of the concession (the legislature did not give further guidance here), and whether, in principle, (the question of evaluative) part borne by the concessionaire. And the consequences of mistakes are very compelling, because the applicable law on concessions, instead of the Public Procurement Act may result in a fine of Article. 200 Public Procurement Act and caused a violation of public finance discipline.

The second area is regulated even worse, as not separated fields of application of the Law on concessions with the Law on PPP, and the regulations of these laws largely overlap. Therefore, there are several possible interpretations, including such that the PPP Act does not apply at all to the concession contract, as well as such that complementing these laws, in particular as regards the obligations under the Act on PPP. Difficult problem of delimitation of the scope of these laws and the associated risks, in particular, was smuggled by local government units, adding to the communal economy of the Act ambiguous provision that reads: "Local government units may delegate tasks related to municipal management to individuals, legal persons or agencies who do not have unincorporated, by an agreement on general principles - including the provisions on public finances or, respectively, of a public-private partnership, the provisions of the concession contract or service procurement rules and regulations on public benefit activity and volunteerism. " Such a record does not determine whether the acts listed after the word "appropriately" to be used separately, or are complementary to each other and, more importantly it shows that using any of these laws is not the local authority must take account of provisions on public finances.

The interaction between the various laws governing the principles of public delegation must be clearly defined and must arise from a clear vision of the legislature. Any ambiguity as to which law applied, it creates problems for individuals entrusting these tasks and limits the use of more flexible solutions, leading these individuals to the traditional and safe wyboru least effective of the Law on Public Procurement. This applies in particular local government units, which should play a key role in the development of broadband infrastructure in the areas of digital exclusion.

(3) Doubts about the scope of exemptions relating to telecommunications activities.

Act on the concession does not apply to such (Article 4 paragraph 1 pt 2) "when concluding a contract by confessionaires performing at least one of the following activities:

  1. the provision of a public telecommunications network,

  2. the operation of public telecommunications network,

  3. the provision of publicly available telecommunications services through public telecommunications networks or electronic mail services through such networks - If the contract is to be concluded only for the performance of such activities. "

Almost identical to the exclusion contained in the Act on Public Procurement (Article 4 paragraph 10), which does not apply to:
"contracts awarded by entities carrying out at least one of the following activities:

  1. the provision of a public telecommunications network,

  2. the operation of public telecommunications network,

  3. the provision of publicly available telecommunications services through public telecommunications networks or electronic mail services through such networks - if the contract is awarded only to perform one of these types of activities. "

The main drawback of both of these provisions of fundamental importance, iwhich determines the need for appropriate public procurement law or the law on concessions, lies in their formulation such that the customer / grantor must, before granting the contract / concession to exercise one of the following types of telecommunications activities. This eliminates the exemption from the law on concessions the most common situations, namely a) the preparation by a public telecommunications network, and the concession of services in the field of ac above, provided with its use, and b) a public body entrusted by the construction of public telecommunications networks and the right to use this network, in particular to provide it publicly available telecommunications services. Both of these situations are subject to the law on concessions, and would not be public entity if he began to do at least one kind of point ac). Such a distinction has no rational justification, nor is it required by the Articles 13 of Directive 2004/18/EC, which both the Polish regulations are very strict implementation.

As a result, public contracts and concessions relating to the telecommunications activities of public bodies (particularly local government units), there is chaos and a somewhat random distribution of what is subject to the Law on Public Procurement, Law on Concessions, or not subject to any of these laws. In addition, it increases the use of chaos in the terminology of these two provisions inconsistent with the provisions of the Law - Telecommunications Law.

What's more, it seems equally wrong to treat the two provisions, because the law on public procurement is essentially a different perspective than the law on concessions - in the first case is more about the telecommunications services provided to the customer, and the second for such services provided to third parties. The specificity of the concession is also in the fact that an important element is to provide the right to use the telecommunications network built or the right to perform the task in the form of provision of publicly available telecommunications services, which can have a huge impact on competition. The granting of such rights under the concession, as well as inside and outside the concession, should be governed by the fundamental principles governing intervention in the competitive telecommunications market.

(4) The issue of exclusive rights to use, the transfer of the telecommunications network after the expiration of the concession and the concessionaire payments to the grantor.

Concessions Act provides that the remuneration of the concessionaire may only be entitled to use the facility or service, or only such right together with payment of the grantor. The Act does not state whether this right should be granted as an exclusive right, or the grantor may grant more concessions. However, it seems that the intention of the legislature was to grant the concession of the exclusive right to use, as evidenced by the following piece of reasoning to the law: "The concession is related in principle to the concessionaire the exclusive right to use the leased concessions, which may adversely affect the maintain competition in the market. " This should be more clearly defined rules, when a public body may grant the right to use in the telecommunications business on an exclusive basis, so as not to distort competition and not to create a local monopoly. Whenever such a decision must be associated with the analysis of competition in the market potential of the area and available to regulatory solutions.

Law on concessions is not allowed under the concession agreement transfers ownership - Art. 22 of the Act only allows access to the concessionaire of the assets necessary to perform the object of the concession. This is important especially for concessions on a publicly available telecommunications services performed using the public telecommunications network and shared for this purpose by the grantor or built by the concessionaire, because very often the concessionaire is interested in acquiring the network after the expiry of the concession. What is more, many joint investments of this type is a very important condition: first, to encourage the expansion of the public network by a concessionaire who, without a systematic network of investment gradually loses its value and usefulness (eg.: subject to availability of passive infrastructure, and the concessionaire to invest in equipment active), and secondly, after the concession period remains unresolved concessionaire subscribers and provide them with continuity of service (hard to imagine that the grantor provides a network for a further period to another concessionaire, or an invitation to tender to sell the network to another entity, which would prevent the provision of the original concessionaire services for subscribers acquired in the period of the concession - the only solution to this problem would be to conclude contracts with subscribers on behalf of the grantor and after the concession period "returns" to the grantor, they along with the infrastructure to "go" for another concession - such a solution, however, seem totally unattractive for the original concessionaire), third in the event that the network was available at the end of the concession period to return to the grantor, the practical problem is the emergence of devices connected to the network by the concessionaire in the network expansion or settlement amounts incurred by him on the network.

Thus, if the Act does not permit the assignment of the concession ownership of the network to the concessionaire after the concession period, it created doubt as to whether the agreement meets the characteristics of the concession agreement referred to in Article. 1 of the Act, it can not embed it in general clause on transfer of ownership, or whether it is acceptable, but then no longer apply the law on concessions? It seems that there is significant risk that the entrenched practice, the first of these options will reduce the scope for joint ventures in the area of telecommunications.

Important problem in the context of operational programs, in particular currently being implemented in the framework of projects to build broadband networks, it is also that if in thr situation when a public entity has built a network and intends to lease fee to the operator to provide services to telecommunications companies, what is related to "the right to use the services" (for the provision of services to third parties - here: telecommunications companies) and providing for the purpose of the assets of a public entity, whether it is a "standard" lease or concession agreement, or, services, which should be the law? This question seems even more difficult to resolve, when considering that the typical contractual clause is to exempt from rent for an initial period of 3-5 years, and then downloading the rent is often a reduced amount. The fact of the payment for rent does not seem to prevail in this situation, because the provisions of the Act does not preclude the provision of payment for the assets, necessary to perform the object of the concession.

 

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Updated : 2011-06-24