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Concession Agreement

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A concession agreement is a grant of rights to operate, maintain, and invest in a facility, piece of land, or public service, made by a government, local authority, corporation, or other entity to another party, typically for a set number of years. Public services such as water supply are commonly operated this way, with a private company given the exclusive right to run a public utility under a concession while the underlying asset remains under public ownership. A concession is related to but distinct from a lease, in which a company may operate and maintain a utility without the same investment responsibility, and from a management contract, sometimes called an affermage, which differs again in the rights and remuneration of the operator.

Cross-Tradition Connections

Associated With

Airport Industry, Industries

Concession agreements, under which an operator pays for the right to run retail, food or parking space on someone else property, are the airport industry standard commercial structure for filling terminal space.

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