Synthesis | Relationship between concessions and regulation

Club Debate

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Author(s) Jeremy BONAN
Caroline GIBON
Frédéric GRAVOT
Frédéric MARTY
Publication type Synthesis

October, 19th 2018

In the case of highly capital-intensive infrastructure, the public authorities may choose to delegate the financing, development, maintenance and operation of these infrastructures to third-party companies under concession contracts. In return, these concession companies are entitled to collect tolls from users.

Although concession contracts exist in many network industries (water, electricity and gas, air and sea transport, telecommunications), it is neither customary nor consistent with the logic of the concession contract itself for a regulator to interfere in the relationship between the concessionaire and the concession-granting authority. However, there is a tendency for regulators to look at aspects of this relationship, particularly in terms of pricing, as is the case with ARAFER for motorway concessions. Other sectors, such as telecoms and energy, also seem to be affected by this trend.

How is the intervention of a regulatory authority justified in the context of a contract between the State or a local authority and a private operator? What are the tools of this regulation? How is the intersection between regulation and concessions organised in different sectors of activity?

This document summarises the presentations and discussions that took place during the seminar on the theme of "Relationship between concessions and regulation" organised by the Club on 19 October 2018.

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