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In a public contract, companies receive a fixed amount for carrying out a project or providing a service. With a concession, companies' remuneration mainly consists of the authorization to manage and use a work or service, which entails the risk of possible losses in the investments made.

Concession Period/s means the period/s over which Concession/s will be granted to the Winning Bidder/s, over a period of thirty (30) years, as per provisions to be defined in the Concession Agreements.

Concession means the right to use the existing state-owned or municipal property or property that is to be created, which is granted under contract for the performance of certain business activity.

Examples of Concession Agreements The British Channel Tunnel Group Limited and the French France-Manche S.A. operate the Channel Tunnel, often referred to as the "Chunnel" under this agreement. The tunnel connects the two countries and allows for passenger and freight rail traffic between them.

Advantages of a concession agreement Some of the advantages of the concession agreement are as follows: The private sector bears a significant share of the risk involved in the project. It spreads the risk involved for both parties and no single party's share is at risk.

Highly complex to implement and administer. May have underlying fiscal costs to the government. Negotiation between parties and finally making a project deal may require long time. May require close regulatory oversight. Contingent liabilities to the government in the medium and long term.

There are different types of concession contracts, including: ex-leasing, franchise, build- operate-transfer (BOT) etc.