On April 26, 2013 the State Duma passed the Federal Law “On introducing amendments to the Federal Law ‘On concession agreements’ and certain legislative acts of the Russian Federation.” These amendments are aimed at increasing the inflow of private capital into the housing and public utilities sector and providing uninterrupted operation of heat and water supply and discharge  systems.

The new law being adopted will allow for the need to compensate the concessionaire’s expenses incurred by it in respect of relevant facilities, when establishing prices for heat and water supply and water discharge.

Considering the specifics of the housing and public utilities facilities, the law also introduces the following main amendments:

1. The resolution on entering into a concession agreement for heat supply, water supply and/or water discharge facilities shall stipulate the required capacity of such facilities, as well as minimum acceptable performance values as to their reliability, quality and energy efficiency.

2. The tender documentation shall contain a specific list of tender criteria, including in particular the amount of the concessionaire’s expenses for the creation or operation of agreement facilities, as well as planned values of reliability, quality and energy efficiency performances of housing and public utilities facilities.  

3. The provisions of concession agreements for heat supply, water supply and/or water discharge facilities are to be altered in accordance with a special procedure stipulating the receipt of consent from the antitrust authority.

4. Negotiations with regard to concession agreement terms and conditions and alterations of terms and conditions of concession agreement for housing and public utilities are prohibited.

To ensure the application of the new provisions, amendments have been also introduced to the Federal Law “On heat supply” and the Federal Law “On water supply and discharge.”

Most provisions of the Federal Law come into effect starting from January 1, 2014.

Federal Law No.103-FZ of the Russian Federation “On introducing amendments to the Federal Law ‘On concession agreements’ and certain legislative acts of the Russian Federation” dated May 7, 2013.

Additional notes

Should any questions arise in connection with the above or if you need any additional materials, please contact Pavel Karpunin or Rimma Leshcheva, St. Petersburg Office of Capital Legal Services.

This Information letter keeps the clients of Capital Legal Services and other interested parties abreast of information that may, to any extent, affect their activity or cater to their particular interests. The opinions and commentaries expressed in this information letter shall not be deemed as legal opinions and do not cancel the need to obtain legal advice or legal opinion on separate issues.