Concessions (or franchise agreements) may also be relevant to the broader theme of access to the track, where they require the dealer to grant access to other operators for the payment of an access fee. The more attractive and profitable a concession is, the more likely it is that a government will offer tax breaks and other incentives. Authorization to decommission project work: again, these are not documents generated by the project company (or its lawyers) when they must be able to unlock the project. Their existence and validity are necessary conditions for the project to be launched and are therefore subject to specific clauses in the credit agreement, which generally contain an annex listing the necessary authorisations to carry out the project`s work. Urban planning and building permits are as important as the impact on the environmental impact of the project itself. Concession agreements are sometimes used to exploit other nations. For example, foreign countries and companies forced China to make various concessions in the 19th and early 20th centuries. These concessions have given foreign companies the right to develop and operate railways and ports within China. In addition, citizens of other countries have often appreciated extraterritoriality as part of their concessions. Extraterritoriality meant that foreign laws and tribunals settled disputes between Chinese and foreigners in concessions. Of course, the decisions of these courts have tended to oppose Chinese businesses and consumers. Concessions are a very popular approach to privatization and are generally the subject of a public tender. After extensive pre-qualifications, the winning bidder obtains the right (concession or lease) to operate the airport for a limited period of time.
Bidding consortia often consist of an airport manager and a type of financial investor. Table 9.1 sets out the main criteria and gives examples of the concession model. The terms of a concession contract depend largely on his desire. For example, a contract to operate a food concession in a popular stadium cannot offer much to the dealer in the kind of incentives. On the other hand, a government that wants to attract mining companies to an impoverished area could offer significant incentives. These incentives could include tax breaks and a lower royalty rate. Public services such as water supply can be operated in concessions.