Concession Contract in Procurement Law 2026

Concession contract: a contract between a public grantor of a concession and a concessionaire on the transfer of the right and risk of operating a public service.

Definition: A concession contract is a contract for pecuniary interest between one or more public contracting authorities (grantors of the concession) and one or more economic operators (concessionaires), by which the grantor of the concession transfers the performance of works or services and, in return, grants the right of commercial exploitation, with the operating risk passing substantially to the concessionaire.

Last updated: January 2026 · Legal status: Directive 2014/23/EU Article 5; BVergG 2018 § 188; GWB § 105; KonzVgV

What is a concession contract?

The concession contract is the legally binding instrument by which the concession award is implemented; it governs the rights and obligations of the grantor of the concession and the concessionaire for the entire term of the concession. Unlike a classic contract for works or a service contract, the main consideration owed by the grantor of the concession does not consist in the payment of a purchase price but in the transfer of the economic right to exploit the service.

The concession contract typically has a long term (5 to 30 years), as the concessionaire must amortise its investment over a long period.

Key elements of the contract

A concession contract contains, in addition to the general contract terms, concession-specific clauses on the allocation of risk and on management of the service.

Typical elements are:

Subject-matter: a precise description of the works or services to be performed
Operating risk: provisions on the economic risk borne by the concessionaire (demand-side, supply-side or mixed risk)
Remuneration system: user fees, payments by the state, balancing mechanisms
Term and extension options: limitation to the period economically required
Quality and availability requirements: minimum standards for performance of the service
Adjustment clauses: provisions for changed circumstances (e.g. inflation, regulatory changes)
Termination and hand-back: conditions for early termination and the return of infrastructure

Duration of the contract

The duration of the concession contract must be limited to the economically necessary minimum. Article 18 of Directive 2014/23/EU requires that the duration must not be excessively long; for concessions with a term of more than five years, the duration must be justified by the period necessary for amortisation. Excessively long concession contracts can foreclose competition on a lasting basis and are problematic under procurement law.

Modifications of the contract

Concession contracts may be substantially modified during their term only under narrow conditions. Article 43 of Directive 2014/23/EU defines the circumstances in which modifications are permitted (e.g. in the event of unforeseeable circumstances, or for non-substantial modifications below certain value thresholds). Inadmissible substantial modifications give rise to a fresh duty to tender.

Related terms

FAQ

Can a concession contract be terminated early? Yes, under the conditions provided for in the contract or in the event of serious breaches of obligation on the part of the concessionaire. The grantor of the concession may also generally terminate the contract for good cause or in the public interest, but must take account of any compensation claims of the concessionaire.

Is the concession contract subject to procurement law where it is subsequently modified? Yes. Substantial modifications of a concession contract are treated as new awards and require a fresh award procedure, unless one of the exceptions provided for in Directive 2014/23/EU applies.

Last updated: January 2026 All information is provided without warranty. For legally binding advice, please consult a law firm specialising in procurement law.