The concession contract has been duly approved or ratified by the beneficiary and the concessionaire and is legally binding on the beneficiary and the concessionaire in accordance with its terms. Such agreements may be concluded either for the purpose of carrying out an infrastructure project or for the provision of services related to an infrastructure project. In 2015, a committee chaired by Vijay Kelkar was created to revive the PPP infrastructure model. In its report, the Committee recommended the development of a review and renegotiation mechanism to introduce flexibility into concession agreements. In India, the Supreme Court adopted the doctrine of the main agencies regarding concession agreements in VST Industries Limited v VST Industries Workers` Union and Anr. In this case, the Supreme Court ruled that a private body that controlled or operated infrastructure in India under a concession contract should be considered a public function and that those entities were required to act in the public interest. Under the terms of the Sector Act, the concession may either allow the Authority to retain or retain ownership of the assets, hand it over to the concessionaire and return it to a public authority at the end of the duration of its concession, or the authority and the concessionaire own them. Sellers work on a smaller scale under concession agreements granted by local governments, businesses or other property owners. This activity may include restaurants and retail at major airports, vendors at public fairs, or selling food and beverages from booths at State Parks.
Concession contracts can also be used for risk management. Suppose a country invests a significant amount in the production of a single product. This country will then have a high idiosyncratic risk related to the price of this raw material. For example, the governments of Brazil and Mexico have invested heavily in state-owned oil companies. The value of their assets and income fell significantly when the price of oil fell in 2020. Countries that grant concessions may lose revenue from concession fees, but they do not risk as much capital. Within the European Union, the award of concessions by public bodies is subject to regulation. Construction concessions have been subject to procurement rules for some time, as Directive 2004/18/EC of the European Parliament and of the European Council on public procurement applies to construction concessions, and cross-border service concessions are governed by the principles of the Treaty on the Functioning of the European Union.
However, on 26 February 2014, the European Parliament and the European Council adopted a new Directive 2014/23/EU on the award of concession contracts, which obliged EU Member States to introduce national legislation for the award of concession contracts costing EUR 5 186 000, which were awarded on or after 18 April 2016. Concession contracts are, at best, a form of outsourcing that allows all parties to benefit from comparative advantages. Often, a country or company has resources that lack the knowledge or capital to use them effectively. . . .