S.L. 601.9 Art. 85Modification of concession contracts during their term.

(1) Concession contracts may be modified without a new concession award procedure in any of the following cases:

(a) where the modifications, irrespective of their monetary value, have been provided for in the initial concession documents in clear, precise and unequivocal review clauses, which may include value revision clauses, or options. Such clauses shall state the scope and nature of possible modifications or options as well as the conditions under which they may be used. They shall not provide for modifications or options that would alter the overall nature of the concession;

(b) for additional works or services by the original concessionaire that have become necessary and that were not included in the initial concession where a change of concessionaire:

(i) cannot be made for economic or technical reasons such as requirements of interchangeability or interoperability with existing equipment, services or installations procured under the initial concession; and

(ii) would cause significant inconvenience or substantial duplication of costs for the contracting authority or contracting entity: Provided that in the case of concessions awarded by a contracting authority or the contracting entity, for the purposes of pursuing an activity other than those referred to in Schedule 4, any increase in value shall not exceed fifty per cent of the value of the original concession;

(c) where all of the following conditions are fulfilled:

(i) the need for modification has been brought about by circumstances which a diligent contracting authority or contracting entity could not foresee;

(ii) the modification does not alter the overall nature of the concession;

(iii) in the case of concessions awarded by a contracting authority or the contracting entity, for the purposes of pursuing an activity other than those referred to in Schedule 4, any increase in value is not higher than fifty per cent of the value of the initial concession;

(d) where a new concessionaire replaces the one to which the contracting authority or the contracting entity had initially awarded the concession as a consequence of either:

(i) an unequivocal review clause or option in conformity with the provisions of paragraph (a);

(ii) universal or partial succession into the position of the initial concessionaire, following corporate restructuring, including takeover, merger, acquisition or insolvency, of another economic operator that fulfils the criteria for qualitative selection initially established provided that this does not entail other substantial modifications to the contract and is not aimed at circumventing the application of these regulations; or

(iii) in the event that the contracting authority or contracting entity itself assumes the main concessionaire’s obligations towards its subcontractors;

(e) where the modifications, irrespective of their value, are not substantial within the meaning of sub-regulation (5).

(2) When contracting authorities or contracting entities modify a concession, which has an estimated value which meets or exceeds the thresholds established under in Schedule 3, in terms of the instances set out under sub-regulation (1)(b) and (c), it shall publish a notice to that effect in the Official Journal of the European Union. Such notice shall contain the information set out in Schedule 13 and shall be published in accordance with the provisions of regulation 97.

(3) Without any need to verify whether the conditions set out under sub-regulations (5)(a) to (d) are met, concessions may equally be modified without a new concession award procedure where the value of the modification is below both of the following values:

(a) the threshold set out under Schedule 3; and

(b) ten per cent of the value of the initial concession: Provided that the modification may not alter the overall nature of the concession. Where several successive modifications are made, the value shall be assessed on the basis of the net cumulative value of the successive modifications.

(4) For the purpose of the calculation of the value referred to in sub-regulation (1)(b) and (c) and sub-regulation (3), the updated value shall be the reference value when the concession includes an indexation clause. If the concession does not include an indexation clause, the updated value shall be calculated taking into account the average inflation in Malta.

(5) A modification of a concession during its term shall be considered to be substantial within the meaning of sub-regulation (1)(e), where it renders the concession materially different in character from the one initially concluded. In any event, without prejudice to the provisions of sub-regulations (1), (2) and (3), a modification shall be considered to be substantial where one or more of the following conditions is met:

(a) the modification introduces conditions which, had they been part of the initial concession award procedure, would have allowed for the admission of applicants other than those initially selected or for the acceptance of a tender other than that originally accepted or would have attracted additional participants in the concession award procedure;

(b) the modification changes the economic balance of the concession in favour of the concessionaire in a manner which was not provided for in the initial concession;

(c) the modification extends the scope of the concession considerably;

(d) where a new concessionaire replaces the one to which the contracting authority or contracting entity had initially awarded the concession in other cases than those provided for under sub-regulation (1)(d).

(6) A new concession award procedure in accordance with these regulations shall be required for other modifications of the provisions of a concession during its term than those provided for under sub-regulations (1), (2) and (3).