LAW on the system of concessions

no. 219 of 1998

 

CHAPTER I
General provisions

 

            Art. 1. - (1) Object of the present law is the regulation and organization of the granting of concessions for:
            a) private or public property goods of the State, county, town, or commune;
            b) public services and activities of national or local interest.
            (2) The granting of concessions shall be made on the basis of a contract by which a person, called conceder, transmits for a determined period of not more than 49 years to another person, called concessionaire, acting on its own risk and responsibility, the exploitation obligation and right of a good, an activity or of a public service in exchange for dues.

            Art. 2. - (1) Public property goods shall be inalienable. Under the terms of the law they may be placed under the administration of self-managed public companies or public institutions, or they may be conceded or leased.
            (2) Public services, activities, or goods from the following domains may form the object of a concession:
            a) public transports;
            b) motor highways, road tunnels and bridges with toll through;
            c) civilian airports, ports, railways and road infrastructures;
            d) the construction of new hydro-electric power plants and their exploitation, of those in conservation inclusive;
            e) postal services;
            f) the frequency range and telecommunications distribution and transport networks;
            g) economic activities linked to artificial and natural waterways, water management works related to them, water quality, meteorological and hydrological measurement installations and stations, fish protection works;
            h) public property real estates, beaches, wharfs, and free zones;
            i) thermal and electric energy distribution and transport networks;
            j) combustible gas and petroleum distribution and transport pipeline networks;
            k) drinking water public distribution and transport networks;
            1) exploitation of mineral deposits and of fluid and solid substances;
            m) exploitation of thermal sources;
            n) natural resources of the maritime economic zone and of the continental shelf;
            o) sports grounds, recreation grounds, and professional show institutions;
            p) medico-sanitary units, sections or laboratories from their structure as well as auxiliary medical services;
            r) economic activities linked to the turning to account of historical sites and monuments;
            s) waste collecting, storage and turning to good account;
            t) any other public services, activities or goods which are not prohibited by special organic laws.
            (3) Public services, activities or goods in whose regard there are no regulation authorities whose advice is compulsory with reference to tariffs or prices practiced by the concessionaires.

            Art. 3. - The Government, and the local or county councils may approve by decision the conceding of other services, activities or goods belonging to the state's private property, which are not provided under Article 2.

            Art. 4. - (1) The dues obtained by the granting of concessions shall be made revenue to the state budget or local budgets, as the case may be.
            (2) The mode of calculation and the mode of payment of the dues shall be established by the competent ministries or by the local public administration authorities, as the case may be.

            Art. 5. - (1) The quality of conceder in the name of the state, county, town, or commune shall have:
            a) the ministries or other specialist bodies of the central public administration for the state's private or public property goods or for public services and activities of national interest;
            b) the county councils, local councils, or public institutions of local interest for the private or public property goods of the commune, town, or county, or for public services and activities of local interest.
            (2) The quality of concessionaire may have any foreign or Romanian, natural person or juristic person of private law.

 

CHAPTER II
Initiation of the conceding

 

            Art. 6. - The conceder or any interested investor may have the initiative of the conceding.

            Art. 7. - The initiation of the conceding shall be based on an opportunity study previously carried out by the conceder, which shall mainly contain the following elements:
            a) the description of the public service, activity, or good which is to be conceded;
            b) the motives of environmental, social, financial and economic nature justifying the granting of the concession;
            c) the necessary investments for modernization or extension;
            d) the minimum level of the dues;
            e) the granting modality of the concession considered: the reason shall be stated on whether the open public bid with preselection procedure or the direct negotiation procedure shall be the option resorted to;
            f) the estimated duration of the concession;
            g) the predictable terms for the realization of the conceding procedure;
            h) the compulsory advice of the Central State Office for Special Problems and of the General Staff with regard to the framing of the object of the concession in the infrastructure of the national defence system, as the case may be.

            Art. 8. - The conceding of the state private or public property goods, of public service or activities shall be approved on the basis of the technical conditions of the concession by decision of the communal, town, or county council or of the Government, as the case may be.

            Art. 9. - (1) On receiving the conceder proposal couched by an interested investor, the conceder shall have the obligation to proceed to the drawing up of an opportunity study within 30 days, unless the parties agree on a different term, for the purpose of making a decision with regard to the conceding. (2) In case the conceder and the concessionaire agree that the opportunity study be drawn up by an independent consulting firm, its cost shall be borne by the concessionaire.

 

CHAPTER III
Conceding procedures

 

            Art. 10. - The conceding of a public service, activity or good shall be achieved by public bid or by direct negotiation, conformably to the provisions under the present law.

 

Section 1
Conceding by public bid procedure

 

            Art. 11. - (1) The public bid may be open with preselection.
            (2) The open public bid shall be an auction by which any Romanian or foreign private law juristic person or natural person may present a tender.
            (3) The open public bid with preselection shall be an auction by which any Romanian or foreign private law juristic person or natural person selected by the conceder on the basis of previously elaborated criteria have the right to present tenders.

            Art. 12. - (1) In the case of the public bid procedures, the conceder shall have the obligation to elaborate the technical conditions of the concession and instructions with regard to the organization and the deployment of the conceding procedure.
            (2) The technical conditions shall compulsorily include the exploitation conditions of the concession, the investments that are to be consequently achieved by the concessionaire, the financial and insurance clauses, the regime of the goods used by the concessionaire and his obligations with regard to environmental conservation.
            (3) The framework-contents of the documentation mentioned under para. (1) shall form the object of methodological standards that shall be approved by the Government.

            A. Conceding procedure by open public bid

            Art. 13. - In the case of the open public bid procedure, the conceder shall have the obligation to publish in the "Monitorul Oficial" (Official Gazette of Romania), Part IV, in a daily of national circulation and in one of local circulation an advertisement of the open public bid, which shall compulsorily contain:
            a) the name and headquarters of the conceder;
            b) the object and duration of the concession;
            c) the place where the documentation mentioned under Art. 12 para. (1) can be studied;
            d) the conclusive deed with regard to the qualities and capacities requested from the bidders;
            e) the date and place where tenders shall be received;
            f) the duration in which the bidders remain engaged by the terms of their tenders;
            g) the place, hour, and date of opening of the tenders.

            Art. 14. - The receiving term of the tenders shall not be shorter than 20 calendar days and shall not exceed 60 calendar days, beginning from the date of publication of the advertisement of the open public bid.

            Art. 15. - (1) The bidders shall transmit their tenders in two sealed envelopes, an outer and an inner one, which shall be registered in the order of their reception, in a special register to be kept by the conceder at his headquarters.
            (2) On the outer envelope shall be recorded the open public bid for which the tender is deposited. The outer envelope shall have to contain:
            a) a card with information with regard to the bidder and a declaration of participation signed by the bidder, without thickenings, erasures, or modifications;
            b) the conclusive deeds with regard to the qualities and capacities of the bidders, conformably to the conceder's solicitations as well as the participation guarantee in the open public bid.
            (3) On the inner envelope shall be inscribed the name or appellation of the bidder and his home address or that of his registered office, as the case may be. This envelope shall contain the tender proper.
            (4) The sealed envelopes shall be handed in to the evaluation commission on the day appointed for their opening.

            Art. 16. - (1) The evaluation commission shall be formed as follows:
            a) in the case in which the conceder is one of the ministries provided under Art. 5 para. (1) letter a), from representatives of the respective ministries and of the Ministry of Finance, appointed to this end;
            b) in the case in which the conceder is a specialist body provided under Art. 5 para. (1) letter a), from representatives of the respective body and of the Ministry of Finance, appointed to this end;
            c) in the case in which the conceder is one of the local councils or county councils provided under Art. 5 para. (1) letter b), from representatives of the local council or county council, and of the general directorates of public finance and financial state control of the counties or of the Municipality of Bucharest, appointed to this end;
            d) in the case in which the conceder is one of the institutions provided under Art. 5 para. (1), letter b), from representatives of the respective public institutions, of the local council or county council, and of the general directorates of public finance and financial state control of the counties or of the Municipality of Bucharest, appointed to this end.
            (2) In the case in which the service, activity, or good subject to the conceding shall release the environmental procedures, according to the legislation in force, the evaluation commission shall include in its composition a representative of the competent authority for environmental conservation, too.
            (3) The composition of the evaluation commission shall be established by decision of the conceder. The conceder shall, at the same time, appoint the chairman of the evaluation commission who shall, in his turn, appoint the secretary of the commission in charge of the drawing up of the written report of proceedings.
            (4) At the sittings of the evaluation commision, its chairman may invite personalities recognized for their experience and competence in the matter forming the object of the open public bid. These personalities shall benefit by an advisory vote.

            Art. 17. - (1) The sitting for the opening of the envelopes shall be public.
            (2) After opening the outer envelopes, the evaluation commission shall eliminate tenders which do not contain all the documents and data requested under Art. 15 or the instructions with regard to the organization and deployment of the conceding procedure, and draw up a written statement of the proceedings in which the result of the opening of the respective envelopes shall be mentioned.
            (3) The opening of the inner envelopes of the tenders retained shall be made only after the written statement of the proceedings shall have been signed by all members of the evaluation commission and by the bidders.

            Art. 18. - (1) The evaluation commission shall analyse the tenders from the inner envelopes, and may, if it considers necessary, request specifications with regard to the content of their tender.
            (2) The evaluation commission shall choose the tender it considers the best from the point of view of meeting the selection criteria stated in the instructions with regard to the organization and deployment of the conceding procedure. These criteria have in view the economic efficiency, the sum of the proposed investments, the price of the accomplishments, their utilization cost, their technical value, the mode of solving the obligations with regard to the environmental conservation and the control of the social problems, the financial and professional guarantees proposed by each bidder and the achievement terms of the investment works.

            Art. 19. - (1) On the basis of the evaluation of the tenders, the evaluation commission shall draw up a report including the description of the conceding procedure and of the evaluation operations, the essential elements of the tenders deposited and the reasons for the choice of the winning bidder or, in the case in which no bidder was designated as winner, the cause of the rejection.
            2) In the case in which the open public bid should have failed to designate a winner, this situation shall be recorded in a written statement, and a new bid shall be organized within 45 days.
            (3) If the second bid should also have failed to designate a winner, this shall be recorded in a written statement which will form the basis of the decision of having recourse to the direct negotiation procedure.
            (4) The conditions of the conceding by direct negotiation may not be inferior to those of the best tender rejected by the open public bid.

            Art. 20. - (1) The report drawn up by the evaluation commission and the tenders presented shall forthwith be transmitted to the conceder.
            (2) After receiving the report of the evaluation commission, the conceder shall, within five calendar days, proceed to inform the winning tenderer about his selection, and the otber tenderers about the rejection of their tenders. At the written request of the rejected tenderers, the conceder shall transmit a copy of the written evaluation statement of their tenders within ten calendar days after the receipt of the rejection communication of their tenders.

            Art. 21. - (1) The tenderers may dispute the mode in which the legal provisions regulating the conceding by open public bid procedure was observed.
            (2) The communication term, the disputing term, the competent authorities to solve them, and their operating procedure shall be established by methodological norms of organization and deployment of the conceding procedure.

            B. Conceding procedure by open public bid with preselection

            Art. 22. - (1) In the case of the open public bid procedure with preselection, the conceder shall have the obligation to elaborate an advertisement of receipt of candidatures mentioning:
            a) the object of the concession;
            b) the objectives aimed by the conceder;
            c) the conclusive deeds with regard to the qualities and capacities solicited from the candidates;
            d) the reception term of the candidatures;
            e) the selection criteria of the candidates.
            (2) The advertisement of candidatures reception shall be published in the same conditions as those provided under Article 13, and the reception term of the candidatures shall be the same as that provided under Art. 14.

            Art. 23. - (1) The candidatures shall be forwarded in sealed envelopes to the evaluation commission instituted conformably to Art. 16.
            (2) The evaluation commission shall analyse the documents presented and draw up the list of the candidates admitted to the presentation of a tender, taking into account the selection criteria stated precisely in the advertisement of reception of candidatures.

            Art. 24. - The conceder shall, within five calendar days, inform the rejected candidates about the non-acceptance of their candidatures. At the written solicitation of the rejected candidates, the conceder shall convey to them a copy from the written statement within ten calendar days after the reception of the communication of the rejection of the candidatures.

            Art. 25. - (1) The conceder shall inform the candidates whose candidatures were selected about the place and period where and when they can study the presentation file of the conceding.
            (2) For presenting their tenders, candidates shall dispose of a term, which cannot be smaller than 20 calendar days, nor exceed 60 calendar days after the date established according to the criteria provided under para. (1).
            (3) After handing in their tenders, the open public bid with preselection procedure shall unfold according to the provisions under Art. 15 and articles 17-21.

 

Section 2
Conceding by direct negotiation procedure

 

            Art. 26. - (1) The procedure of direct negotiation shall be applicable in the case in which the public bid has not led to the designation of a winner.
            (2) Following on the direct negotiation procedure, the conceder shall grant the concession to the foreign or Romanian private law juristic person or natural person which he selects.

            Art. 27. - (1) The conceder shall have the obligation to publish in the "Monitorul Oficial" (Official Gazette of Romania), Part IV, in a daily of national circulation and in one of local circulation his intention to have recourse to the direct negotiation procedure.
            (2) The advertisement, published according to the provisions under para. (1), shall have to state precisely:
            a) the name and headquarters of the conceder;
            b) the object of the concession;
            c) the modality by which the conceder shall organize the deployment of negotiations.

 

CHAPTER IV
Provisions regarding the concession contract

           

            Art. 28. - (1) The concession contract shall be concluded within 30 days after the date at which the conceder has informed the tenderer on the acceptance of his tender, unless it was otherwise established by the technical conditions.
            (2) Non-observance of the term established under para. (1) may involve the payment of damages by the guilty party.
            (3) The refusal of the tenderer declared winner to conclude the concession contract involves the loss of the guarantee deposited for participation, and the payment of damages, if such be the case.
            (4) The concession contract shall include the clauses provided in the technical conditions and the clauses agreed by the contracting parties supplementing those in the technical conditions and without running counter to the objectives of the concession provided in the technical conditions.
            (5) At the conclusion of the concession contract the parties shall agree on the cases of cessation of the contract. In the contract the parties may inscribe specific clauses referring to the unilateral determination or to the redemption.
            (6) In all cases the concession contract shall mention the interdiction for the concessionaire to subconcede totally or in part to another person the object of the concession.
            (7) The concession contract shall also include contractual clauses referring to the sharing out of the environmental responsibilities between the conceder and the concessionaire.

            Art. 29. - (1) At the expiry of the concession term, the concessionaire shall be under an obligation to restore in full property, free of any charge, the good conceded, achieved investments included.
            (2) In the concession contract there must be stated precisely and distinctly the classes of goods that shall be used by the concessionaire in the unfolding of the respective concession:
            a) the returned goods that shall be restored by full right and free of any charge to the conceder at the expiry of the concession contract. Returned goods shall be the goods which have formed the object of the concession as well as those which have resulted from the investments imposed by the technical conditions;
            b) the goods to be taken over which at the expiry of the concession contract may be restored to the conceder to the extent to which the latter manifests his intention to take over the respective goods in exchange of the payment of a compensation equal to the book value made actual conformably to the provisions of the technical conditions. Goods to be taken over shall be those goods which belonged to the concessionaire and were used by him over the duration of the concession;
            c) the own goods which at the expiry of the concession contract remain in the property of the concessionaire. Own goods shall be goods that have belonged to the concessionaire and were used by him over the duration of the concession, except those provided under letter b).
            (3) In the concession contract mention shall be made of the allotment of these goods at the cessation of the concession from any cause whatever.

            Art. 30. - (1) The concession contract shall be concluded conformably to the Romanian law regardless of the nationality or citizenship of the concessionaire, over a duration which may not exceed 49 years, beginning from the date when it was signed. The duration of the concession shall be established depending on the writing off period of the investments that are to be achieved by the concessionaire.
            (2) For the settlement of possible litigations, the parties may stipulate in the contract an arbitration clause.
            (3) The concession contract may be extended over a period equal with not more than half of the initial duration, by a simple deliberate agreement of the parties.

            Art. 31. - (1) The conceder may modify unilaterally the regulation part of the concession contract, with preliminary notification of the concessionaire, for exceptional reasons linked to the local or national interest, as the case may be.
            (2) In the case in which the unilateral modification of the contract should be prejudicial to the concessionaire, he shall be entitled promptly to receive adequate and effective damages. In case of disagreement between the conceder and the concessionaire with regard to the amount of the damages, this shall be established by the competent judicial instance. This disagreement may not in any case allow the concessionaire to shirk his contractual obligations.

            Art. 32. - The contractual relations between conceder and concessionaire shall be based on the principle of the financial balance of the concession, respectively on the achievement of a possible equality between the advantages granted to the concessionaire and the charges that are imposed on him. Consequently the concessionaire shall not be under an obligation to bear the increase of the charges connected with the execution of his obligations, in the case in which this increase follows as a result from:
            a) an action or a measure disposed by a public authority;
            b) a case of force majeure or of mere chance.

            Art. 33. - (1) The concessionaire shall carry out his obligations according to the terms and conditions provided in the concession contract and in agreement with the legal rules specific to the respective domain of activity elaborated by the institutions legally entitled to this end.
            (2) The conceder shall have the right during the unfolding period of the concession contract to verify the way in which its conditions and clauses are observed by the concessionaire.

            Art. 34. - (1) The concessionaire shall have the obligation within 90 days from the date when the concession contract was signed to depose as a guarantee a fixed sum, representing a share from the sum of the payment obligation to the conceder established by the latter and due for the first year of activity. If necessary, from this sum shall be drawn the penalties and sums due to the conceder by the concessionaire as stipulated in the concession contract.
            (2) The concessionaire may pledge as guaranteee mortgage bonds, too, on which a security may be instituted with the conceder's agreement. A similar guarantee shall be constituted, depending on the necessity to cover future costs for the fulfilment of obligations with regard to environmental conservation which may appear in course of the unfolding of the concession.

            Art. 35. - Cessation of the concession contract may take place in the following situations:
            a) at the expiry of the duration established in the concession contract;
            b) in the case in which the local or national interest shall impose it, by unilateral denouncement by the conceder with payment of just and preliminary damages at the charge of the conceder;
            c) in the case of non-observance of the contractual obligations by the concessionaire by unilateral annulment by the conceder, with payment of damages at the charge of the concessionaire;
            d) in the case of non-observance of the contractual obligations by the conceder, by unilateral annulment by the concessionaire, with payment of damages at the charge of the conceder;
            e) at the disappearance from a cause of force majeure of the goods conceded, or in the case of an objective impossibility for the concessionaire to exploit it, by renouncement, without payment of damages.

 

CHAPTER V
Provisions with regard to exercising control right

 

            Art. 36. - The competent ministries and the Ministry of Finance shall have control attributions on concessions of national interest, and the general directorates of public finance and of the state financial control of the counties and of the Municipality of Bucharest shall have the control right on concessions of local interest, prosecuting especially the observance of the provisions with reference to:
            a) the conceding decision;
            b) publicity;
            c) contents of the documentation mentioned under Art. 12 para. (1);
            d) the composition and method of work of the commission for the evaluation of the tenders;
            e) terms provided under the present law;
            f) information of the interested factors on the granting or cessation of the concession;
            g) the fulfilment of the contractual obligations by the conceder and by the concessionaire.

 

CHAPTER VI
Sanctions

           

            Art. 37. - Non-observance by the contracting parties of the obligations included in the concession contract shall attract the contractual responsibility of the guilty party.

            Art. 38. - (1) There shall constitute infringements to the provisions of the present law, if not committed under such conditions that they be considered offences according to the criminal law, the following deeds:
            a) non-observance of the provisions with regard to publicity provided under Art. 13, Art. 22 para. (2), and Art. 27 para (1);
            b) non-observance of the terms provided under Art. 9, Art. 14, Art. 20 para. (2), Art. 24, Art. 25 para. (2), Art. 34 para. (1) and Art. 39.
            c) the substitution by members of the evaluation commission and by employees of the conceder of the documents included in the initial tenders with other documents;
            d) the disclosure of any information not destined for publication, by the employees of the conceder as well as by any person involved in the pr~ocess of institution of a concession.
            (2) The infringements provided under para. (1) shall be sanctioned as follows:
            a) those provided under letter a), with a fine from lei 5,000,000 to lei 25,000,000;
            b) those provided under letter b), with a fine from lei 2,000,000 to lei 10,000,000;
            c) those provided under letters c) and d) with a fine from lei 10,000,000 to lei 50,000,000.
            (3) The amount of the fines may be increased by decision of Government, depending on the rate of inflation.
            (4) Fines provided as sanctions for the infringements, under para. (1) may be applied both to natural as well as to juristic persons.
            (5) The finding of the infringements included under the provisions of the present law, and the application of sanctions shall be performed by persons specially empowered by the competent ministries.
            (6) The provisions under the Law no. 32/1968 on the establishment and sanctioning of infringements shall also be applied to the infringements provided under the present law.

 

CHAPTER VII
Final provisions

 

            Art. 39. - Concession contracts of ground pieces of any kind shall be registered by the concessionaire with the real estate publicity registers within 30 calendar days after the date of their conclusions.

            Art. 40. - (1) Private or public property goods of the commune, town, county, or state as well as the public services and activities of local or national interest shall be assigned directly, by a concession contract, to trading companies or national companies or national societies set up by reorganization of the self-managed public companies managing these services, activities, or goods. The concession contract shall be concluded with the competent concedent authority over a duration to be established by decision of the local or county council or of the Government on the setting up of the respective trading company.
            (2) Concession contracts concluded before the date of coming into force of the present law shall preserve their validity.
            (3) In the case of the privatization of national companies, or of national societies, or of trading companies set up by reorganization of the self-managed public companies which had concession contracts concluded under the terms of para. (1), the conceder may request its renegotiation.

            Art. 41. - The Reform Council elaborates and proposes to the Government for approval framework methodological norms in application of the present law within 60 days after the date of publication of the present law in the "Monitorul Oficial" (Official Gazette of Romania).

            Art. 42. - (1) The present law shall come into force within 60 days~ after its publication in the "Monitorul Oficial" (Official Gazette of Romania).
            (2) On the same date shall be abrogated:
            a) art. 25-29 under the Law no. 15/1990 with regard to the reorganization of economic units belonging to the state such as self-managed public companies and trading companies, published in the "Monitorul Oficial" (Official Gazette of Romania), Part I, no. 98 of 8 August 1990, with subsequent modifications and completions;
            b) art. 1-17, art. 25 and annexes Nos 1-5 under the Government Decision no. 1228/1990 on the approval of the methodology of conceding, leasing, and management tenancy, published in the "Monitorul Oficial" (Official Gazette of Romania), Part I, no. 140 of 12 December 1990 with subsequent modifications and completions.

 

Published in the "Monitorul Oficial" (Official Gazette of Romania), Part I, No. 459 of November 30, 1998