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party involved in creating, producing or delivering this document shall be liable for any damages whatsoever arising out of access to, use of
or inability to use this document, or any e rrors or omissions in the content thereof.

This document has been provided by the
International Center for Not-for-Profit Law (ICNL).

ICNL is the leading source for information on th e legal environment for civil society and public
participation. Since 1992, ICNL has served as a resource to civil society leaders, government
officials, and the donor community in over 90 countries.

Visit ICNL’s Online Library at
https://www.icnl.org/knowledge/library/index.php
for further resources and research from countries all over the world.

Disclaimers Content. The information provided herein is for general informational and educational purposes only. It is not intended and should not be
construed to constitute legal advice. The information contai ned herein may not be applicable in all situations and may not, after the date of
its presentation, even reflect the most current authority. Noth ing contained herein should be relied or acted upon without the benefit of legal
advice based upon the particular facts and circumstances pres ented, and nothing herein should be construed otherwise.
Translations. Translations by ICNL of any materials into other languages are intended solely as a convenience. Translation accuracy is not
guaranteed nor implied. If any questions arise related to the accuracy of a translation, please refer to the original language official version of
the document. Any discrepancies or differences created in the tr anslation are not binding and have no legal effect for compliance or
enforcement purposes.
Warranty and Limitation of Liability. Although ICNL uses reasonable efforts to include ac curate and up-to-date information herein, ICNL
makes no warranties or representations of any kind as to its a ccuracy, currency or completeness. You agree that access to and u se of this
document and the content thereof is at your own risk. ICNL discl aims all warranties of any kind, express or implied. Neither ICNL nor any
party involved in creating, producing or delivering this document shall be liable for any damages whatsoever arising out of access to, use of
or inability to use this document, or any e rrors or omissions in the content thereof.

PROVISIONAL INSTITUTIONS OF SELF GOVERNMENT

_________________________________________________________________

Law No. 02/L-44
ON THE PROCEDURE FOR THE AWARD OF CONCESSIONS

The Assembly of Kosovo,

Taking into account UNMIK Regulation No. 2001/9 of 15 May 2001 on a Constitutional
Framework for Provisional Self-Government in Kosovo, Articles 5.1 (b), (d) and (m), 5.7
and 9.1.26 (a); and

Considering it desirable to further develop the general principles of transparency,
economy and fairness in the ward of contracts by public authorities through the
establishment of specific procedures for the award of concession contracts;

Recognizing the need to bring procedures concerning the award of concession contracts
in Kosovo generally into compliance with internationally recognized best standards and
practices;

Hereby adopts the following:

LAW ON THE PROCEDURE FOR THE AWARD OF CONCESSIONS
I. GENERAL PROVISIONS
Article 1
Definitions

For the purposes of this law:
“Concession Contract” means a contract concluded between a Contracting Authority
and a Concessionaire that has as its principal object the implementation of an
infrastructure project, the performance of which is compensated, in whole or in part, by a
grant of a right to exploit the object of such contract.

“Infrastructure Facility” means physical facilities and systems that directly or indirectly
provide services or items of value to or for the benefit of the general public.

“Infrastructure Project” means the design, construction, development and operation of
new infrastructure facilities or the rehabilitation, modernization, expansion or operation
of existing infrastructure facilities.

“Contracting Authority” means the Public Authority that has been given, under the law
applicable in Kosovo, the authority to enter into a Concession Contract.
UNITED NATIONS
United Nations Interim
Administration Mission
in Kosovo

UNMIK NATIONS UNIES
Mission d’Administration
Intérimaire des Nations Unies au
Kosovo

2

“Concessionaire” means the person that carries out an Infrastructure Project under a
Concession Contract entered into with a Contracting Authority.

“Business Organization” shall have the meaning as set out in UNMIK Regulation No.
2001/6 of 8 February 2001 on Business Organizations.

“Bidder” or “Bidders” means persons, including groups thereof, that participate in
selection proceedings concerning an Infrastructure Project.

“Unsolicited Proposal” means any proposal relating to the implementation of an
Infrastructure Project that is not submitted in response to a request or solicitation issued
by the Contracting Authority within the context of a selection procedure;

“Public Authority” means any of the following: (i) a central, regional, municipal or local
executive authority, public body, ministry, department, agency, or other authority that
exercises, pursuant to any normative or sub-normative act, executive, legislative,
regulatory, public-administrative or judicial powers; (ii) a body governed by public law;
and (iii) an association of one or more of such authorities and/or bodies;

“Public Procurement Regulatory Commission” means the Public Procurement
Regulatory Commission established pursuant to Title V of the Law on Public Procurement.

Article 2
Scope of Application

2.1. The procedures for the award of a Concession Contract, the content of a Concession
Contract and related matters shall be governed by the present Law, provided, however,
that for matters not covered by the present Law, the provisions of the Law on Public
Procurement governing works concession contracts shall be applied.

2.2. In the event of a conflict between the present Law and the relevant provisions of the
Law on Public Procurement, the provisions of the present Law shall prevail.

Article 3
Nullity of Concession Contracts

Any Concession Contract awarded by a Contracting Authority in violation of the present
Law shall be null and void.

II. SELECTION OF THE CONCESSIONAIRE

Article 4
Rules governing the selection proceedings

The selection of the Concessionaire shall be conducted in accordance with (i) Articles 5
to 27 of the present Law, and (ii), for matters not covered by those Articles, the
applicable provisions of the Law on Public Procurement.

3 1. Pre-selection of Bidders

Article 5
Purpose and procedure of pre-selection

5.1. The Contracting Authority shall engage in pre-selection proceedings with a view to
identifying Bidders that are suitably qualified to implement the envisaged Infrastructure
Project.

5.2. The invitation to participate in the pre-selection proceedings shall be published in
accordance with the relevant provisions of the Law on Public Procurement.

5.3. The invitation to participate in the pre-selection proceedings shall include at least the
following:

a A description of the Infrastructure Facility;
b An indication of other essential elements of the project, such as the services to be
delivered by the Concessionaire or the financial arrangements envisaged by the
Contracting Authority;

c Where already known, a summary of the main required terms of the Concession
Contract to be entered into;

d The manner and place for the submission of applications for pre-selection and the
deadline for the submission, expressed as a specific date and time, allowing
sufficient time for Bidders to prepare and submit their applications; and

e The manner and place for solicitation of the pre-selection documents.
5.4. The pre-selection documents shall include at least the following information:
a. The pre-selection criteria in accordance with Article 6;
b. Whether the Contracting Authority intends to waive the limitations on the
participation of consortia set forth in Article 7;

c. Whether the Contracting Authority intends to request only a limited number of
pre-selected Bidders to submit proposals upon completion of the pre-selection
proceedings in accordance with Article 8, paragraph 2, and, if applicable, the
manner in which this selection will be carried out;

d. Whether the Contracting Authority intends to require the successful Bidder to
establish a Corporation in accordance with Article 30.

Article 6
Pre-selection criteria

In order to qualify for the selection proceedings, interested Bidders must meet objectively
justifiable criteria that the Contracting Authority considers appropriate in the particular
proceedings, as stated in the pre-selection documents. These criteria shall include at least
the following:

a Adequate professional and technical qualifications, human resources, equipment
and other physical facilities as necessary to carry out all the phases of the project,
including design, construction, operation and maintenance;

4

b Sufficient ability to manage the financial aspects of the project and capability to
sustain its financing requirements;

c Appropriate managerial and organizational capability, reliability and experience,
including previous experience in operating similar infrastructure facilities.

Article 7
Participation of consortia

7.1. The Contracting Authority, when first inviting the participation of Bidders in the
selection proceedings, shall allow them to form bidding consortia. The information
required from members of bidding consortia to demonstrate their qualifications in
accordance with Article 6 shall relate to the consortium as a whole as well as to its
individual participants.

7.2. Unless otherwise stated in the pre-selection documents, each member of a
consortium may participate, either directly or indirectly, in only one consortium at the
same time. A violation of this rule shall cause the disqualification of the consortium and
of the individual members.

7.3. When considering the qualifications of bidding consortia, the Contracting Authority
shall consider the capabilities of each of the consortium members and assess whether the
combined qualifications of the consortium members are adequate to meet the needs of all
phases of the project.

Article 8
Decision on pre-selection

8.1. The Contracting Authority shall make a decision with respect to the qualifications of
each Bidder that has submitted an application for pre-selection. In reaching that decision,
the Contracting Authority shall apply only the criteria that are set forth in the pre-
selection documents. All pre-selected Bidders shall thereafter be invited by the
Contracting Authority to submit proposals in accordance with Articles 9 to 17.

8.2. Notwithstanding paragraph 1, the Contracting Authority may, provided that it has
made an appropriate statement in the pre-selection documents to that effect, reserve the
right to request proposals upon completion of the pre-selection proceedings only from a
limited number of Bidders that best meet the pre-selection criteria. For this purpose, the
Contracting Authority shall rate the Bidders that meet the pre-selection criteria on the
basis of the criteria applied to assess their qualifications and draw up the list of Bidders
that will be invited to submit proposals upon completion of the pre-selection proceedings.
In drawing up the list, the Contracting Authority shall apply only the manner of rating
that is set forth in the pre-selection documents.

5 2. Procedures for requesting proposals

Article 9
Single-stage and two-stage procedures for requesting proposals

9.1. The Contracting Authority shall provide a set of the request for proposals and related
documents issued in accordance with Article 10 to each pre-selected Bidder that pays the
price, if any, charged for those documents.

9.2. Notwithstanding the above, the Contracting Authority may use a two-stage procedure to
request proposals from pre-selected Bidders when the Contracting Authority does not deem it
to be feasible to describe in the request for proposals the characteristics of the project such as
project specifications, performance indicators, financial arrangements or contractual terms in
a manner sufficiently detailed and precise to permit final proposals to be formulated.

9.3. Where a two-stage procedure is used, the following provisions apply:
a. The initial request for proposals shall call upon the Bidders to submit, in the first stage
of the procedure, initial proposals relating to project specifications, performance
indicators, financing requirements or other characteristics of the project as well as to
the main contractual terms proposed by the Contracting Authority;

b. The Contracting Authority may convene meetings and hold discussions with any of the
Bidders to clarify questions concerning the initial request for proposals or the initial
proposals and accompanying documents submitted by the Bidders. The Contracting
Authority shall prepare minutes of any such meeting or discussion containing the
questions raised and the clarifications provided by the Contracting Authority;

c. Following examination of the proposals received, the Contracting Authority may review
and, as appropriate, revise the initial request for proposals by deleting or modifying any
aspect of the initial project specifications, performance indicators, financing
requirements or other characteristics of the project, including the main contractual
terms, and any criterion for evaluating and comparing proposals and for ascertaining
the successful Bidder, as set forth in the initial request for proposals, as well as by
adding characteristics or criteria to it. The Contracting Authority shall indicate in the
record of the selection proceedings to be kept pursuant to Article 26 the justification for
any revision to the request for proposals. Any such deletion, modification or addition
shall be communicated in the invitation to submit final proposals;

d. In the second stage of the proceedings, the Contracting Authority shall invite the
Bidders to submit final proposals with respect to a single set of project specifications,
performance indicators or contractual terms in accordance with Articles 10 to17.

Article 10
Content of the request for proposals

The request for proposals shall include at least the following information:
a General information as may be required by the Bidders in order to prepare and submit
their proposals, including information on the deadline for submission of proposals;

b Project specifications and performance indicators, as appropriate, including the
Contracting Authority’s requirements regarding safety and security standards and
environmental protection;

6 c The contractual terms proposed by the Contracting Authority, including an
indication of which terms are deemed to be non-negotiable;

d The criteria for evaluating proposals and the thresholds, if any, set by the
Contracting Authority for identifying non-responsive proposals; the relative weight
to be accorded to each evaluation criterion; and the manner in which the criteria and
thresholds are to be applied in the evaluation and rejection of proposals.

Article 11
Bid securities

11.1. The request for proposals shall set forth the requirements with respect to the issuer
and the nature, form, amount and other principal terms and conditions of the required bid
security.

11.2. A Bidder shall not forfeit any bid security that it may have been required to provide,
other than in cases of:

a. Withdrawal or modification of a proposal after the deadline for submission of
proposals and, if so stipulated in the request for proposals, before that deadline;

b. Failure to enter into final negotiations with the Contracting Authority pursuant to
Article 17, paragraph 1;

c. Failure to submit its best and final offer within the time limit prescribed by the
Contracting Authority pursuant to Article 17, paragraph 2;

d. Failure to sign the Concession Contract, if required by the Contracting Authority to
do so, after the proposal has been accepted;

e. Failure to provide required security for the fulfillment of the Concession Contract
after the proposal has been accepted or to comply with any other condition prior to
signing the Concession Contract specified in the request for proposals.

Article 12
Clarifications and modifications

The Contracting Authority may, whether on its own initiative or as a result of a request
for clarification by a Bidder, review and, as appropriate, revise any element of the request
for proposals as set forth in Article 10. The Contracting Authority shall indicate in the
record of the selection proceedings to be kept pursuant to Article 26 the justification for
any revision to the request for proposals. Any such deletion, modification or addition
shall be communicated to the Bidders in the same manner as the request for proposals at a
reasonable time prior to the deadline for submission of proposals.

Article 13
Submission of Proposals

The Bidders shall submit their proposals in writing, signed and placed in sealed envelopes.
A proposal received by the Contracting Authority after the deadline for submission of
proposals shall not be opened and shall be returned to the Bidder that submitted it.

7 Article 14
Evaluation criteria

14.1. The criteria for the evaluation and comparison of the technical proposals shall
include at least the following:

a Technical soundness;
b Compliance with environmental standards;
c Operational feasibility;
d Quality of services and measures to ensure their continuity.

14.2. The criteria for the evaluation and comparison of the financial and commercial
proposals shall include, as appropriate:

a. The present value of the proposed tolls, unit prices and other charges over the
concession period;

b. The present value of the proposed direct payments by the Contracting Authority, if any;
c. The costs for design and construction activities, annual operation and maintenance
costs, present value of capital costs and operating and maintenance costs;

d. The extent of financial support, if any, expected from a Public Authority;
e. The soundness of the proposed financial arrangements;
f. The extent of acceptance of the negotiable contractual terms proposed by the
Contracting Authority in the request for proposals;

g. The social and economic development potential offered by the proposals.

Article 15
Comparison and evaluation of proposals

The Contracting Authority shall compare and evaluate each proposal in accordance with
the evaluation criteria, the relative weight accorded to each such criterion and the
evaluation process set forth in the request for proposals.

Article 16
Further demonstration of fulfillment of qualification Criteria

The Contracting Authority may require any Bidder that has been pre-selected to
demonstrate again its qualifications in accordance with the same criteria used for pre-
selection. The Contracting Authority shall disqualify any Bidder that fails to demonstrate
again its qualifications if requested to do so.

Article 17
Final negotiations

17.1. The Contracting Authority shall rank all responsive proposals on the basis of the
evaluation criteria and invite for final negotiation of the Concession Contract the Bidder
that has attained the best rating. Final negotiations shall not concern those contractual
terms, if any, that were stated as non-negotiable in the final request for proposals.

8

17.2. If it becomes apparent to the Contracting Authority that the negotiations with the
Bidder invited will not result in a Concession Contract, the Contracting Authority shall
inform the Bidder of its intention to terminate the negotiations and give the Bidder
reasonable time to formulate its best and final offer. If the Contracting Authority does not
find that proposal acceptable, it shall terminate the negotiations with the Bidder
concerned. The Contracting Authority shall then invite for negotiations the other Bidders
in the order of their ranking until it arrives at a Concession Contract or rejects all
remaining proposals. The Contracting Authority shall not resume negotiations with a
Bidder with which negotiations have been terminated pursuant to this paragraph.

3. Negotiation of Concession Contracts without competitive procedures

Article 18
Circumstances authorizing award without competitive procedures

Subject to approval by the Public Procurement Regulatory Commission, the Contracting
Authority is authorized to negotiate a Concession Contract without using the procedure
set forth in Articles 5 to 17 in the following cases:

a. When there is an urgent need for ensuring continuity in the provision of the service
and engaging in the procedures set forth in Articles 5 to 17 would be impractical,
provided that the circumstances giving rise to the urgency were neither foreseeable
by the Contracting Authority nor the result of dilatory conduct on its part;

b. Where the project is of short duration and the anticipated initial investment value
does not exceed the amount of 10.000 €;

c. Where the project involves matters pertaining to public security;

d. Where there is only one source capable of providing the required service, such as
when the provision of the service requires the use of intellectual property, trade
secrets or other exclusive rights owned or possessed by a certain person or persons;

e. In cases of Unsolicited Proposals falling under Article 23;

f. When an invitation to the pre-selection proceedings or a request for proposals has
been issued but no applications or proposals were submitted or all proposals failed
to meet the evaluation criteria set forth in the request for proposals and if, in the
judgment of the Contracting Authority, issuing a new invitation to the pre-selection
proceedings and a new request for proposals would be unlikely to result in a project
award within a required time frame; or

g. In other cases where the Public Procurement Regulatory Commission authorizes
such an exception for compelling reasons of public interest.

9 Article 19
Procedures for negotiation of a Concession Contract

Where a Concession Contract is negotiated without using the procedures set forth in
Articles 5-16 the Contracting Authority shall:

a. Except for Concession Contracts negotiated pursuant to Article 18, subparagraph (c),
cause a notice of its intention to commence negotiations in respect of a Concession
Contract to be published in accordance with the relevant provisions of the Law on
Public Procurement;

b. Engage in negotiations with as many persons as the Contracting Authority judges
capable of carrying out the project as circumstances permit;

c. Establish evaluation criteria against which proposals shall be evaluated and ranked.

4. Unsolicited Proposals

Article 20
Admissibility of Unsolicited Proposals

The Contracting Authority is authorized to consider Unsolicited Proposals pursuant to the
procedures set forth in Articles 21 to 23, provided that such proposals do not relate to a
project for which selection procedures have been initiated or announced.

Article 21
Procedures for determining the admissibility of Unsolicited Proposals

21.1. Following receipt and preliminary examination of an Unsolicited Proposal, the
Contracting Authority shall promptly inform the proponent whether or not the project is
considered to be potentially in the public interest.

21.2. If the project is considered to be potentially in the public interest, the Contracting
Authority shall invite the proponent to submit as much information on the proposed
project as is feasible at this stage to allow the Contracting Authority to make a proper
evaluation of the proponent’s qualifications and the technical and economic feasibility of
the project and to determine whether the project is likely to be successfully implemented
in the manner proposed in terms acceptable to the Contracting Authority. For this
purpose, the proponent shall submit a technical and economic feasibility study, an
environmental impact study and satisfactory information regarding the concept or
technology contemplated in the proposal.

21.3. In considering an Unsolicited Proposal, the Contracting Authority shall respect the
intellectual property, trade secrets or other exclusive rights contained in, arising from or
referred to in the proposal. Therefore, the Contracting Authority shall not make use of
information provided by or on behalf of the proponent in connection with its Unsolicited
Proposal other than for the evaluation of that proposal, except with the consent of the
proponent. Except as otherwise agreed by the parties, the Contracting Authority shall, if
the proposal is rejected, return to the proponent the original and any copies of documents
that the proponent submitted and prepared throughout the procedure.

10

Article 22
Unsolicited Proposals that do not involve intellectual property, trade secrets
or other exclusive rights

22.1. The Contracting Authority shall, if it decides to implement the project, initiate a
selection procedure in accordance with Articles 5 to 17 if the Contracting Authority
considers that:

a. The envisaged output of the project can be achieved without the use of intellectual
property, trade secrets or other exclusive rights owned or possessed by the
proponent; and

b. The proposed concept or technology is not truly unique or new.

22.2. The proponent shall be invited to participate in the selection proceedings initiated
by the Contracting Authority pursuant to paragraph 1 and may be given an incentive or a
similar benefit in a manner described by the Contracting Authority in the request for
proposals in consideration for the development and submission of the proposal.

Article 23
Unsolicited Proposals involving intellectual property, trade secrets
or other exclusive rights

23.1. If the Contracting Authority determines that the conditions of Article 22, paragraph
1 (a) and (b), are not met, it shall not be required to carry out a selection procedure
pursuant to Articles 5 to 17. However, the Contracting Authority may still seek to obtain
elements of comparison for the Unsolicited Proposal in accordance with the provisions
set out in paragraphs 2 to 4 of this Article.

23.2. Where the Contracting Authority intends to obtain elements of comparison for the
Unsolicited Proposal, the Contracting Authority shall publish a description of the
essential output elements of the proposal with an invitation for other interested parties to
submit proposals within 30 days.

23.3. If no proposals in response to an invitation issued pursuant to paragraph 2 of this
Article are received within the period of time specified in paragraph 2 above, the
Contracting Authority may engage in negotiations with the original proponent.

23.4. If the Contracting Authority receives proposals in response to an invitation issued
pursuant to paragraph 2, the Contracting Authority shall invite the proponents to
negotiations in accordance with the provisions set forth in Article 19. In the event that the
Contracting Authority receives a sufficiently large number of proposals, which appear
prima facie to meet its infrastructure needs, the Contracting Authority shall request the
submission of proposals pursuant to Articles 9 to 17, subject to any incentive or other
benefit that may be given to the person who submitted the Unsolicited Proposal in
accordance with Article 22, paragraph 2.

11 5. Miscellaneous provisions

Article 24
Confidentiality

The Contracting Authority shall treat proposals in such a manner as to avoid the
disclosure of their content to competing Bidders. Any discussions, communications and
negotiations between the Contracting Authority and a Bidder pursuant to Articles 9,
paragraph 3, Articles 17, 18, 19 or 23, paragraphs 3 and 4, shall be confidential. Unless
required by law or by a court order or permitted by the request for proposals, no party to
the negotiations shall disclose to any other person any technical, price or other
information in relation to discussions, communications and negotiations pursuant to the
aforementioned provisions without the consent of the other party.

Article 25
Notice of contract award

Except for Concession Contracts awarded pursuant to Article 18, subparagraph (c), the
Contracting Authority shall cause a notice of the contract award to be published in
accordance with the relevant provisions of the Law on Public Procurement. The notice
shall identify the Concessionaire and include a summary of the essential terms of the
Concession Contract.

Article 26
Record of selection and award proceedings

The Contracting Authority shall keep an appropriate record of information pertaining to
the selection and award proceedings in accordance with the relevant provisions of the
Law on Public Procurement.

Article 27
Review procedures

A Bidder that claims to have suffered, or that may suffer, loss or injury due to a breach of
a duty imposed on the Contracting Authority by the law may seek review of the
Contracting Authority’s acts or failures to act in accordance with the relevant provisions
of the Law on Public Procurement.

III. CONTENTS AND IMPLEMENTATION OF
THE CONCESSION CONTRACT

Article 28
Contents and implementation of the Concession Contract

The Concession Contract shall provide for such matters as the parties deem appropriate,
such as:

a. The nature and scope of works to be performed and services to be provided by the
Concessionaire;

b. The conditions for provision of those services and the extent of exclusivity, if any,
of the Concessionaire’s rights under the Concession Contract;

12

c. The assistance that the Contracting Authority may provide to the Concessionaire in
obtaining licenses and permits to the extent necessary for the implementation of the
Infrastructure Project;

d. Any requirements relating to the establishment and minimum capital of a legal entity
incorporated in accordance with Article 30;

e. The ownership of assets related to the project and the obligations of the parties, as
appropriate, concerning the acquisition of the project site and any necessary
easements, in accordance with Articles 31 to 33;

f. The remuneration of the Concessionaire, whether consisting of tariffs or fees for the
use of the facility or the provision of services; the methods and formulas for the
establishment or adjustment of any such tariffs or fees; and payments, if any, that
may be made by the Contracting Authority or other Public Authority;

g. Procedures for the review and approval of engineering designs, construction plans
and specifications by the Contracting Authority, and the procedures for testing and
final inspection, approval and acceptance of the Infrastructure Facility;

h. The extent of the Concessionaire’s obligations to ensure, as appropriate, the
modification of the service so as to meet the actual demand for the service, its
continuity and its provision under essentially the same conditions for all users;

i. The Contracting Authority’s or other Public Authority’s right to monitor the works
to be performed and services to be provided by the Concessionaire and the
conditions and extent to which the Contracting Authority or any other authorized
Public Authority may order variations in respect of the works and conditions of
service or take such other reasonable actions as they may find appropriate to ensure
that the Infrastructure Facility is properly operated and the services are provided in
accordance with the applicable legal and contractual requirements;

j. The extent of the Concessionaire’s obligation to provide the Contracting Authority
or any other Public Authority with reports and other information on its operations;

k. Mechanisms to deal with additional costs and other consequences that might result
from any order issued by the Contracting Authority or another Public Authority in
connection with subparagraphs (h) and (i) above, including any compensation to
which the Concessionaire might be entitled;

l. To the extent considered necessary, any rights of the Contracting Authority to review
and approve major contracts to be entered into by the Concessionaire, in particular
with the Concessionaire’s own shareholders or other affiliated persons;

m. Guarantees of performance to be provided and insurance policies to be maintained by
the Concessionaire in connection with the implementation of the Infrastructure Project;

n. Remedies available in the event of default of either party;
o. The extent to which either party may be exempt from liability for failure or delay in
complying with any obligation under the Concession Contract owing to
circumstances beyond its reasonable control;

13 p. The duration of the Concession Contract and the rights and obligations of the parties
upon its expiry or termination;

q. The manner for calculating compensation pursuant to Article 47;
r. The governing law and the mechanisms for the settlement of disputes that may arise
between the Contracting Authority and the Concessionaire;

s. The rights and obligations of the parties with respect to confidential information.

Article 29
Governing law

The Concession Contract is governed by the law applicable in Kosovo unless otherwise
provided in the Concession Contract.

Article 30
Organization of the Concessionaire

The Contracting Authority may require that the successful Bidder establish a Business
Organization, provided that a statement to that effect was made in the pre-selection
documents or in the request for proposals, as appropriate. Any requirement relating to the
minimum capital of such a legal entity and the procedures for obtaining the approval of the
Contracting Authority to its statute and by-laws and significant changes therein shall be set
forth in the Concession Contract consistent with the terms of the request for proposals.

Article 31
Ownership of assets

The Concession Contract shall specify, which assets are or shall be public property and
which assets are or shall be the private property of the Concessionaire. The Concession
Contract shall in particular identify which assets belong to the following categories:

a. Assets, that the Concessionaire is required to return or transfer to the Contracting
Authority or to another entity indicated by the Contracting Authority in
accordance with the terms of the Concession Contract;

b. Assets, that the Contracting Authority, at its option, may purchase from the
Concessionaire; and

c. Assets that the Concessionaire may retain or dispose of upon expiry or
termination of the Concession Contract.

Article 32
Acquisition of rights related to the project site

The Contracting Authority or other Public Authority under the terms of the law and the
Concession Contract shall make available to the Concessionaire or, as appropriate, shall
assist the Concessionaire in obtaining such rights related to the project site, including title
thereto, as may be necessary for the implementation of the project.

14 Article 33
Easements

33.1. The Concessionaire shall have the right to enter upon, transit through or do work or
fix installations upon property of third parties, as appropriate and required for the
implementation of the project in accordance with the provisions of the applicable law on
property rights.

33.2. Any easements that may be required for the implementation of the project shall be
created in accordance with the applicable law on property rights.

Article 34
Financial arrangements

34.1. The Concessionaire shall have the right to charge, receive or collect tariffs or fees
for the use of the facility or its services in accordance with the Concession Contract,
which shall provide for methods and formulas for the establishment and adjustment of
those tariffs or fees in accordance with the rules established by the competent Public
Authority.

34.2. The Contracting Authority shall have the power to agree to make direct payments to
the Concessionaire as a substitute for, or in addition to, tariffs or fees for the use of the
facility or its services.

Article 35
Security interests

35.1. Subject to any restriction that may be contained in the Concession Contract, the
Concessionaire has the right to create security interests over any of its assets, rights or
interests, including those relating to the Infrastructure Project, as required to secure any
financing needed for the project.

35.2. The shareholders of the Concessionaire shall have the right to pledge or create any
other security interest in their shares in the Concessionaire.

35.3. No security under paragraph 1 may be created over public property or other
property, assets or rights needed for the provision of a public service, where the creation
of such security is prohibited by the applicable law.

Article 36
Assignment of the Concession Contract

Except as otherwise provided in Article 35, the rights and obligations of the
Concessionaire under the Concession Contract may not be assigned to third parties
without the consent of the Contracting Authority. The Concession Contract shall set forth
the conditions under which the Contracting Authority shall give its consent to an
assignment of the rights and obligations of the Concessionaire under the Concession
Contract, including the acceptance by the new Concessionaire of all obligations
thereunder and evidence of the new Concessionaire’s technical and financial capability as
necessary for providing the service.

15 Article 37
Transfer of controlling interest in the Concessionaire

Except as otherwise provided in the Concession Contract, a controlling interest in the
Concessionaire may not be transferred to third parties without the consent of the
Contracting Authority. The Concession Contract shall set forth the conditions under
which consent of the Contracting Authority shall be given.

Article 38
Operation of infrastructure

38.1. The Concession Contract shall set forth, as appropriate, the extent of the
Concessionaire’s obligations to ensure:

a. The modification of the service so as to meet the demand for the service;
b. The continuity of the service;
c. The provision of the service under essentially the same conditions for all users;
d. The non-discriminatory access, of other service providers to any public
infrastructure network operated by the Concessionaire.

38.2. The Concessionaire shall have the right to issue and enforce rules governing the use
of the facility, subject to the approval of the Contracting Authority or any other
authorized Public Authority.

Article 39
Compensation for specific changes in legislation

The Concession Contract shall set forth the extent to which the Concessionaire is entitled
to compensation in the event that the cost of the Concessionaire’s performance of the
Concession Contract has substantially increased or that the value that the Concessionaire
receives for such performance has substantially diminished as a result of changes in
legislation or regulations specifically applicable to the Infrastructure Facility or the
services it provides.

Article 40
Revision of the Concession Contract

40.1. Without prejudice to Article 39, the Concession Contract shall further set forth the
extent to which the Concessionaire is entitled to a revision of the Concession Contract with a
view to providing compensation in the event that the cost of the Concessionaire’s
performance of the Concession Contract has substantially increased or that the value that the
Concessionaire receives for such performance has substantially diminished as a result of:

a. Changes in economic or financial conditions; or
b. Changes in legislation or regulations not specifically applicable to the
Infrastructure Facility or the services it provides;

provided that the economic, financial, legislative or regulatory changes:
a. Occur after the conclusion of the contract;
b. Are beyond the control of the Concessionaire; and

16

c. Are of such a nature that the Concessionaire could not reasonably be expected to
have taken them into account at the time the Concession Contract was negotiated
or to have avoided or overcome their consequences.

40.2. The Concession Contract shall establish procedures for revising the terms of the
Concession Contract.

Article 41
Takeover of an Infrastructure Project by the Contracting Authority

Under the circumstances set forth in the Concession Contract, the Contracting Authority has
the right to temporarily take over the operation of the facility for the purpose of ensuring the
effective and uninterrupted delivery of the service in the event of serious failure by the
Concessionaire to perform its obligations and to rectify the breach within a reasonable period
of time after having been given notice by the Contracting Authority to do so.

Article 42
Substitution of the Concessionaire

The Contracting Authority may agree with the entities extending financing for an
Infrastructure Project and the Concessionaire to provide for the substitution of the
Concessionaire by a new entity or person appointed to perform under the existing
Concession Contract upon serious breach by the Concessionaire or other events that
could otherwise justify the termination of the Concession Contract.

IV. DURATION, EXTENSION AND TERMINATION OF
THE CONCESSION CONTRACT

1. Duration and extension of the Concession Contract
Article 43
Duration and extension of the Concession Contract

43.1. The duration of the concession shall be set forth in the Concession Contract taking
into consideration the maximum duration of a Concession Contract as permitted by the
respective legislation.

43.2. The Contracting Authority may agree to extend the duration of the Concession Contract
for an additional period of not more than 10 years, unless otherwise determined by law.

43.3. The Contracting Authority shall agree to extend duration of the Concession
Contract in the following circumstances:

a. Delay in completion or interruption of operation due to circumstances beyond the
reasonable control of either party;

b. Project suspension brought about by acts of the Contracting Authority or other
public authorities; or

c. Increase in costs arising from requirements of the Contracting Authority not
originally foreseen in the Concession Contract, if the Concessionaire would not be
able to recover such costs without such extension.

17 2. Termination of the Concession Contract

Article 44
Termination of the Concession Contract by the Contracting Authority

The Contracting Authority may terminate the Concession Contract:
a. In the event that it can no longer be reasonably expected that the Concessionaire
will be able or willing to perform its obligations; or

b. For compelling reasons of public interest, subject to payment of compensation to
the Concessionaire, the terms of the compensation to be as agreed in the
Concession Contract.

Article 45
Termination of the Concession Contract by the Concessionaire

The Concessionaire may not terminate the Concession Contract except under the
following circumstances:

a. In the event of serious breach by the Contracting Authority or other Public
Authority of its obligations in connection with the Concession Contract;

b. If the conditions for a revision of the Concession Contract under Article 40,
paragraph 1, are met, but the parties have failed to agree on a revision of the
Concession Contract; or

c. If the cost of the Concessionaire’s performance of the Concession Contract has
substantially increased or the value that the Concessionaire receives for such
performance has substantially diminished as a result of acts or omissions of the
Contracting Authority or other public authorities and the parties have failed to
agree on a revision of the Concession Contract.

Article 46
Termination of the Concession Contract in other cases

Either party shall have the right to terminate the Concession Contract in the event that the
performance of its obligations is rendered impossible by circumstances beyond either
party’s reasonable control. The parties shall also have the right to terminate the
Concession Contract by mutual consent.

3. Arrangements upon termination or expiry of the Concession Contract

Article 47
Compensation upon termination of the Concession Contract

The Concession Contract shall stipulate how compensation due to either party is
calculated in the event of termination of the Concession Contract, providing, where
appropriate, for compensation for the fair value of works performed under the
Concession Contract, costs incurred or losses sustained by either party, including, as
appropriate, lost profits.

18 Article 48
Wind-up and transfer measures

The Concession Contract shall provide, as appropriate, for:
a. Procedures for the transfer of assets to the Contracting Authority;
b. The compensation to which the Concessionaire may be entitled in respect of
assets transferred to the Contracting Authority or to a new Concessionaire or
purchased by the Contracting Authority;

c. The transfer of technology required for the operation of the facility;
d. The training of the Contracting Authority’s personnel or of a successor
Concessionaire in the operation and maintenance of the facility;

e. The provision, by the Concessionaire, of continuing support services and resources,
including the supply of spare parts, if required, for a reasonable period after the
transfer of the facility to the Contracting Authority or to a successor Concessionaire.

V. SETTLEMENT OF DISPUTES

Article 49
Disputes between the Contracting Authority and the Concessionaire

Any disputes between the Contracting Authority and the Concessionaire shall be settled
through the dispute settlement procedures agreed by the parties in the Concession Contract.

Article 50
Disputes involving customers or users of the Infrastructure Facility

Where the Concessionaire provides services to the public or operates infrastructure
facilities accessible to the public, the Contracting Authority may require the
Concessionaire to establish simplified and efficient procedures for handling claims
submitted by its customers or users of the Infrastructure Facility.

VI. PUBLIC PROCUREMENT REGULATORY COMMISSION

Article 51
Public Procurement Regulatory Commission

51.1. The Public Procurement Regulatory Commission (PPRC) shall be responsible for
ensuring the proper implementation of the present Law. The PPRC shall, therefore, have
the same functions and powers with respect to the implementation of the present Law as
it has with respect to the implementation of the Law on Public Procurement.

51.2. The PPRC shall also have the authority to develop and issue rules and other
secondary legislation to effect the proper implementation of the present Law. The PPRC
shall, therefore, have the same powers and functions with respect to the present Law, as
are currently exercised by the Rules Committee with respect to the Law on Public
Procurement.

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VII. FINAL PROVISIONS

Article 52
Repeal of previous legislation

The present Law and any implementing rules issued hereunder shall supersede all prior
legislation and rules governing the award of Concession Contracts in Kosovo.

Article 53
Entry into force

The present law shall enter into force after adoption by the Assembly of Kosova on the date
of its promulgation by the Special Representative of the Secretary-General.

Law No. 02/L-44
3 October 2005 President of the Assembly
_____________________
Academic Nexhat Daci