Concessions without the Obligation to Pay a Concession Fee: The Croatian Case

Directive 2014/23/EU of the European Parliament and the Council of 26 February 2014 on the award of concession contracts has significantly altered the legal nature of concessions within the European Union. A concession is now simply defined as a contractual form. Furthermore, the Concession Directive provides the freedom for member states to independently determine the services they consider to be of general economic interest, including the methods of their organisation and funding, in accordance with EU law. The Directive grants extensive powers to member states to regulate concessionary relationships under national law; thus, the Republic of Croatia has addressed this issue with the Concessions Act of 2017. Typically, a concessionaire pays a fee upon receipt of a concession, which may be monetary or may include the transfer of ownership over constructed facilities upon the concession’s expiration. However, a pertinent research question arises – how should public interest be addressed when a feasibility study indicates that an activity via concession is non-commercial? For example, certain activities that are commercial in major European ports might not be commercial in smaller Croatian ports. The Croatian Law on Concessions allows, as an exception, concessions without the payment of a concession fee – yet such an exception is legally and politically very sensitive and must be adequately justified. This article aims to investigate the conditions and justifications for awarding concessions without a concession fee, focusing on the implications for smaller ports in Croatia.