On Concessions

The Law of the Republic of Kazakhstan dated 7 July 2006 No. 167

Unofficial translation

      Footnote. Throughout the whole text the words “authorised state body on economic planning”, “Authorised state body on economic planning”, “by an authorised state body on economic planning” are respectively substituted by the words “authorised body on state planning”, “Authorised body on state planning”, “by authorised body on state planning” by the Law of the Republic of Kazakhstan dated 02.04.2010 No. 263-IV (shall be enforced from 01.01.2010).

      This Law determines legal conditions of concessions, types of a state support of concessionary and regulates social relations, arising during conclusion, execution and termination of concession agreements.
      Footnote. The Preamble as amended by the Law of the Republic of Kazakhstan dated 05.07.2008 No. 66-IV (the order of enforcement see Article 2).

Chapter 1. GENERAL PROVISIONS

      Article 1. Basic definitions, used in this Law

      The following basic definitions shall be used in this Law:
      1) an authorised state body on budget performance – a central executive body, carrying out management and cross-sector coordination in the field of performance of budget, maintaining of accounting, budgetary accounting and budgetary reporting on performance of republican budget and within its competence of local budgets, National fund of the Republic of Kazakhstan on the basis of report of the National Bank of the Republic of Kazakhstan;
      2) social and vital infrastructure facilities – facilities, complexes of facilities, used for satisfaction of public needs, securing of which imposed on state bodies in accordance with the legislation of the Republic of Kazakhstan;
      3) private concessionary obligations – obligations on concluded concession agreement, accepted by a concessionary;
      4) a concession provider – the Republic of Kazakhstan, on behalf of which the Government of the Republic of Kazakhstan or local executive body, as well as state bodies, authorised by them act on conclusion of concession agreement;
      5) a concessionary – an individual, conducting entrepreneurial activity and (or) a legal entity (with the exception of state agencies and subjects of quasi-public sector), that concluded a concession agreement, as well as carrying out their activity on the basis of joint operation agreement (simple partnership);
      6) a concession – an activity, aimed at establishment (reconstruction) and operation of concession facilities, and carried out at expense of concessionary funds or on conditions of co-funding by a concession provider;
      7) tender organizer on concession (hereinafter – tender organizer) – a state body that carries out tendering process at the choice of concessionary;
      8) a concessionary project – a set of actions on carrying out of concession, realized within limited period and having terminated nature;
      9) advisory monitoring of concessionary projects –services, rendered by independent experts, including development of tender documentation, draft concession agreements, rendering of consulting services in negotiation process of commission with a tenderer;
      10) co-financing of concessionary projects – an allocation of budget funds for financing of certain volume of expenses for establishment (reconstruction) of concession facilities;
      11) feasibility study of concessionary project– a preliminary project documentation, containing the results of marketing, design and engineering, social and economic and ecological researches, as well as institutional solutions, financing decisions that justify practicability and possibility to realize a concessionary project, decision on evaluation and allocation of risks between participants of concessionary project, determination of types and size of public support in case of necessity, as well as on the influence of a project on a government budget and social and economic effect for development of economy in totally and its branch during its realization;
      12) concessional proposal – a concept of concessionary project, reflecting its objective, ways of its accomplishment, including a set of the relevant actions, developed by a state body;
      13) a specialized organization in the matters of concession – an organization, established by the Government of the Republic of Kazakhstan for rendering of services in the matters of concession;
      14) concession facility –facilities of social and vital infrastructures, included into the list, which shall be established (reconstructed) and operated under a concession agreement;
      15) establishment of concession facility – the establishment of new concession facility in the territory of the Republic of Kazakhstan, as well as on the basis of new technologies, mechanization and automation of production, installation of new production equipment on concession facility, performance of other types of works, securing functioning of concession facility;
      16) operation of concession facility – the use of concession facility by a concessionary in accordance with intention of concession facility, as well as for the purpose of production of commodities and (or) performance of works, and (or) rendering of services, in the manner and on conditions, determined by concession agreement;
      17) reconstruction of concession facility – the change of separate premises, other building parts or building in general, by carrying out of actions on reconstruction on the basis of adoption of new technologies, mechanization and automation of production, modernization and replacement of technically outdated and (or) worn equipment by more productive new equipment, as well as change of technological or functional purpose of concession facility or its particular parts, other actions on improvement of performance and operational properties of concession facility;
      18) a concession agreement – a written agreement between concession provider and concessionary, determining rights, obligations and liability of the parties, conditions of realization of concession;
      19) a public private partnership – a form of cooperation between state and subjects of private enterprise, aimed at financing, establishment, reconstruction and (or) operation of social and vital infrastructure facilities;
      20) an authorised body on state planning – a central executive body that carries out management and cross-sector coordination in the field of strategic, economic and budget planning, formulation and formation of budgetary policy;
      21) an authorised body on exercise of right of disposition of republican property – a state body, performing the special executive and control functions within its competence in the field of management of facilities of republican property, privatization and state monitoring of the property, in the branches (spheres) of economy, having strategic importance;
      22) technical proposal – a technical and (or) technological preliminary project documentation, provided by a tenderer of the first stage on a choice of concessionary and containing results of marketing, design and engineering and ecological researches, as well as financing decisions that justify a value of establishment of concession facility;
      23) an authorised state body of the relevant branch – a central executive body that carries out management of the relevant branch (sphere) of a state administration;
      24) a list – a list of facilities, offered into concession for a medium period, approved by the Government of the Republic of Kazakhstan.
      Footnote. Article 1 is in the wording of the Law of the Republic of Kazakhstan dated 04.07.2013 No. 131-V (shall be enforced upon expiry of ten calendar days after its first official publication).

      Article 2.The legislation of the Republic of Kazakhstan on concessions

      1. The legislation of the Republic of Kazakhstan on concessions shall be based on the Constitution and consists of the Civil Code of the Republic of Kazakhstan, this Law and other regulatory legal acts of the Republic of Kazakhstan.
      Provisions of this Law shall not extend to relations, related to concession in the field of subsoil use. Relations, related to concession in the field of subsoil use shall be regulated and carried out in accordance with the Law of the Republic of Kazakhstan On Subsoil and Subsoil Use.
      Concession with application of project financing shall be regulated and carried out in accordance with this Law and in compliance with requirements, provided by the Law of the Republic of Kazakhstan On Project Financing and Securitization.
      2. If an international treaty, ratified by the Republic of Kazakhstan establishes the other rules, than those, contained in this Law, the rules of an international treaty shall be applied.
      Footnote. Article 2 as amended by the Law of the Republic of Kazakhstan dated 12.01.2012 No. 539-IV (shall be enforced upon expiry of ten calendar days after its first official publication).

      Article 3. Basic principles of concession

      An activity, related to concession shall be based on the following basic principles:
      1) publicity and accountability of activity of concession provider and concessionary;
      2) securing a balance of interests and risks of concession provider and concessionary;
      3) securing rights and legal interests of consumers of commodities (works, services), provided by a concessionary, according to concession agreement;
      4) perfect competition;
      5) equality of all the potential concessionaries and non-admission of discrimination.
      Footnote. Article 3 as amended by the Law of the Republic of Kazakhstan dated 05.07.2008 No. 66-IV (the order of enforcement see Article 2).

      Article 4. Scope of application of concession

      The social and vital infrastructure facilities in all the branches (spheres) of economy may be transferred into concession, with the exception of facilities, the list of which shall be determined by the President of the Republic of Kazakhstan.
      Footnote. Article 4 as amended by the Law of the Republic of Kazakhstan dated 04.07.2013 No. 131-V (shall be enforced upon expiry of ten calendar days after its first official publication).

      Article 5. Property right under concession agreement

      1. Immovable and movable property that is a state property, exclusive rights related to carrying out of activity on concession facilities shall be provided for a temporary use and possession of concessionary in the manner, prescribed by concession agreement.
      2. Improvements, carried out on concession facilities, as well as facilities of incomplete construction and property right on the results of intellectual creative activity arising during execution of terms of concession agreement shall be transferred into state property, unless otherwise provided by concession agreement.
      3. Concession facilities, created in the result of execution of terms of concession agreement shall be transferred into state property after their establishment, unless otherwise provided by concession agreement.
      4. Production and other incomes, gained by a concessionary in the result of operation of concession facilities, shall be his (her) property, unless otherwise provided by concession agreement.
      5. Concession facilities may not act in the capacity of a pledge within validity period of concession agreement.
      6. Concession facilities shall not be subject to alienation within validity period of concession agreement.
      7. A concessionary shall bear a risk of accidental loss or accidental injury of a state property, transferred to him (her) in possession and use under concession agreement, as well as a property, originated in the result of execution of concession agreement, unless otherwise provided by concession agreement.
      8. During the co-funding of concessionary project and (or) payment of recovery of expenses by concession provider to concessionary, a concession facility shall be transferred into state property.
      Footnote. Article 5 is in the wording of the Law of the Republic of Kazakhstan dated 04.07.2013 No. 131-V (shall be enforced upon expiry of ten calendar days after its first official publication).

      Article 6. Transfer of rights to land plots to concessionary

      In accordance with the land legislation of the Republic of Kazakhstan, the land use rights may be transferred to concessionary in order to realize concession agreement.

      Article 7. Sources of compensation for expenses and acquisition of incomes of concessionary

      1. The sources of compensation for expenses and acquisition of income of concessionary shall be:
      1) sales of manufactured commodities (works, services) during operation of concession facility;
      2) subsidy from the state in cases, established by the Laws of the Republic of Kazakhstan;
      3) compensation for investment expenses of concessionary in accordance with the budget legislation of the Republic of Kazakhstan;
      4) compensation for operating expenses of concessionary within volumes of expenses on maintaining of social and vital infrastructure facilities in the relevant branch (sphere) of economy;
      5) fee for carrying out of management of concession facility being in state property, as well as lease payment for use of concession facility, being in property of concessionary, in accordance with the budget legislation of the Republic of Kazakhstan;
      6) payment for accessibility of concession facility.
      2. The payment for accessibility of concession facility shall be carried out in the order, determined by the Government of the Republic of Kazakhstan and include payments at expense of budget funds, provided in subparagraphs 3), 4) and 5) of paragraph 1 of this Article, disbursed in the form of unified payment, determined by shares from the total payments within the whole period of realization of concessional project, subject to securing the technical and operating characteristics of concession facility by a concessionary.
      3. The payment for accessibility of concession facility may be applied only in relation to concessionary projects, related to the category of socially important projects.
      4. The sources of compensation for expenses and acquisition of incomes of concessionary shall be determined on the basis of results of tender on a choice of concessionary.
      Footnote. Article 7 is in the wording of the Law of the Republic of Kazakhstan dated 04.07.2013 No. 131-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Chapter 1-1. PUBLIC PRIVATE PARTNERSHIP

      Footnote. The Law is supplemented by Chapter 1-1 in accordance with the Law of the Republic of Kazakhstan dated 04.07.2013 No. 131-V (shall be enforced upon expiry of ten calendar days after its first official publication).

      Article 7-1.Types of public private partnership

      1. Public private partnership shall be divided into institutional and contract public private partnerships.
      2. Institutional public private partnership shall be realized within the activity of legal entities with participation of the state and subjects of private enterprise in the manner, prescribed by the Laws of the Republic of Kazakhstan.
      3. Contract public private partnership shall be realized within the concession agreements, property employment and trust management of state property in the manner, prescribed by this Law and other Laws of the Republic of Kazakhstan.

      Article 7-2. Principles of public private partnership

      Principles of public private partnership shall be:
      1) a principle of consistency – formation of mid-term or long-term mutual relationships between participants of public private partnership on a contractual basis;
      2) a principle of contentiousness – determination of private partner on a basis of competitive tender;
      3) a principle of balance - mutually advantageous distribution of risks, profits, guarantees and obligations between participants of public private partnership;
      4) a principle of efficiency – establishment of criteria and indices, permitting assessment of results achievement of public private partnership.

Chapter 2. GOVERNMENT REGULATION IN THE FIELD OF CONCESSION

      Article 8. Powers of the Government of the Republic of Kazakhstan

      The Government of the Republic of Kazakhstan in the field of concession shall:
      1) approve a list;
      2) approve the rules of maintenance of register of concluded concession agreements and provided state guarantees and sureties of the state;
      3) approve the rules of tendering process on a choice of concessionary;
      4) approve the rules of provision, consideration and selection of concessional proposals;
      4-1) approve the rules of compensation for operating expenses of concessionary within the volume of expenses on maintenance of social and vital infrastructure facilities in the relevant branch (sphere) of economy and criteria of referencing concessionary projects to the category of socially important projects.
      5) approve standard concession agreements in different branches (spheres) of economy;
      6) establish and approve the provision on commission on concessions (hereinafter – commission) in respect of facilities, related to republican property;
      7) establish a specialized organization on the issues of concession;
      7-1) approve the rules of conducting monitoring of concession agreements and assessment of realization of concessionary projects;
      7-2) approve the rules of remuneration payment for carrying out of management of concession facility;
      8) excluded by the Law of the Republic of Kazakhstan dated 02.04.2010 No. 263-IV (shall be enforced from 01.01.2010);
      9) carry out other functions, provided by the Constitution, this Law, other Laws of the Republic of Kazakhstan and acts of the President of the Republic of Kazakhstan.
      Footnote. Article 8 as amended by the Laws of the Republic of Kazakhstan dated 05.07.2008 No. 66-IV (the order of enforcement see Article 2); dated 02.04.2010 No. 263-IV (shall be enforced from 01.01.2010); dated 12.01.2012 No. 539-IV (shall be enforced upon expiry of ten calendar days after its first official publication); dated 04.07.2013 No. 131-V (shall be enforced upon expiry of ten calendar days after its first official publication).

      Article 9. Powers of an authorised body on state planning

      An authorised body on state planning shall:
      1) engage a specialized organization on the issues of concession for conducting:
      expert examination of concessional proposals;
      economic expert examination of feasibility study of concessionary projects (hereinafter - feasibility study);
      expert examination of tender documentation, as well as during amending and modifying it;
      expert examination of concessional applications, provided by tenderers during tendering process on a choice of concessionary;
      expert examination of draft concession agreements, as well as during amending and modifying concession agreements;
      expert examination of proposals of concessionary on receipt of a state surety;
      evaluation of realization of concessionary projects, as well as on condition of co-funding from a budget;
      2) form a list subject to the results of economic expert examinations of feasibility study or expert examinations of concessional proposals and shall introduce it to the Government of the Republic of Kazakhstan;
      3) coordinate a tender documentation and concession agreements, as well as during amending and modifying o them;
      4) excluded by the Law of the Republic of Kazakhstan dated 24.11.2011 No. 495-IV (shall be enforced upon expiry of ten calendar days after its first official publication);
      5) approve the method of appraisement of concession facility and integrated cost of state support of concessionary’s activity;
      6) determine the requirements to development or adjustment, as well as carrying out required expert examinations of feasibility study;
      7) determine the requirements to expert examination of concessional proposals, tender documentation, as well as during amending and modifying it, concessional applications provided by tenderers during the tendering process on a choice of concessionary, and draft concession agreements, as well as during amending and modifying concession agreements;
      7-1) carry out cross-sector coordination and technical guidance in the field of organizing concessional projects;
      7-2) direct the results of evaluation of concessional projects to an authorised state body on carrying out of the right of disposition of republican property for entering data into register of concession agreements on concession facilities, related to republican property;
      8) carry out the other functions, provided by this Law, other Laws, acts of the President of the Republic of Kazakhstan and Government of the Republic of Kazakhstan.
      Footnote. Article 9 is in the wording of the Republic of Kazakhstan dated 02.04.2010 No. 263-IV (shall be enforced from 01.01.2010); as amended by the Law of the Republic of Kazakhstan dated 24.11.2011 No. 495-IV (shall be enforced upon expiry of ten calendar days after its first official publication); dated 04.07.2013 No. 131-V (shall be enforced upon expiry of ten calendar days after its first official publication).

      Article 10. Powers of an authorised state body on budget performance

      An authorised body on budget performance shall:
      1) agree a list;
      2) agree a tender documentation and draft concession agreement, as well as during amending and modifying it, in respect of facilities, related to republican property;
      3) conclude agreements of state guarantees and sureties of the state on concession agreements, as well as keep a register of issued state guarantees and sureties of the state on concession agreements;
      4) ensure fulfilment of state concessional obligations under concluded concession agreements;
      5) register state concessional obligations;
      6) excluded by the Law of the Republic of Kazakhstan dated 02.04.2010 No. 263-IV (shall be enforced from 01.01.2010);
      7) determine the procedure for transfer of concession facilities in possession and use of concessionary, being in state property;
      7-1) establish financial boundaries and priorities of incurrence of state concessional obligations;
      8) carry out the other functions provided by this Law, other Laws, acts of the President of the Republic of Kazakhstan and Government of the Republic of Kazakhstan.
      Footnote. Article 10 is in the wording of the Republic of Kazakhstan dated 05.07.2008 No. 66-IV (the order of enforcement see Article 2); as amended by the Laws of the Republic of Kazakhstan dated 04.12.2008 No. 97-IV (the order of enforcement see Article 2); dated 02.04.2010 No. 263-IV (shall be enforced from 01.01.2010); dated 24.11.2011 No. 495-IV (shall be enforced upon expiry of ten calendar days after its first official publication); dated 04.07.2013 No. 131-V (shall be enforced upon expiry of ten calendar days after its first official publication).

      Article 11. Powers of an authorised state body on exercise of the rights of disposal of republican property

      An authorised state body on exercise of the right of disposal of republican property shall:
      1) agree concessional proposals on facilities, related to republican property and provided in subparagraph 1 of paragraph 2 of Article 16 of this Law, provided by authorised state bodies of the relevant branch for their inclusion into list, within thirty business days from the moment of their submission;
      2) keep a register of concluded concession agreements on concession facilities, related to republican property;
      3) carry out monitoring of concession agreements on concession facilities, related to republican property, within its competence and direct the results of monitoring to an authorised body on state planning;
      4) coordinate concessionary projects in case, provided by the budget legislation of the Republic of Kazakhstan;
      5) take facilities into republican property, established on the basis of concession agreements;
      6) determine the procedure for taking concession facilities into state property;
      7) carry out the other functions provided by this Law, other Laws, acts of the President of the Republic of Kazakhstan and Government of the Republic of Kazakhstan.
      Footnote. Article 11 is in the wording of the Republic of Kazakhstan dated 05.07.2008 No. 66-IV (the order of enforcement see Article 2); as amended by the Law of the Republic of Kazakhstan dated 02.04.2010 No. 263-IV (shall be enforced from 01.01.2010); dated 04.07.2013 No. 131-V (shall be enforced upon expiry of ten calendar days after its first official publication).

      Article 12. Powers of an authorised state body of the relevant branch

      An authorised state body of the relevant branch shall (be):
      1) form concessional proposals on facilities, related to republican property, subject to proposals, introduced by individuals and legal entities in the procedure of private initiative in accordance with Article 15-1 of this Law;
      2) a tender organizer in respect of concession facilities, related to republican property and provided in paragraph 2 of Article 16 of this Law;
      3) conclude concession agreement on concession facilities, related to republican property and provided in paragraph 2 of Article 16 of this Law on the basis of commission decision;
      4) carry out the control of execution of concession agreements on concession facilities, related to republican property and provided in paragraph 2 of Article 16 of this Law and direct the results of control to an authorised body on a state planning;
      5) provide information to an authorised state body on exercising the right of disposal of republican property on concluded concession agreements;
      6) organize a transfer to republican property of facilities established on the basis of concession agreements;
      7) organize engaging of new concessionaries by open tendering process on a choice of concessionary in case of pre-term termination of previously concluded concession agreement on concession facilities, related to republican property;
      8) engage independent experts in case of necessity, for advisory support of concessionary projects, a financing of which shall be carried out in accordance with the budget legislation of the Republic of Kazakhstan;
      9) carry the other functions provided by this Law, other Laws, acts of the President of the Republic of Kazakhstan and Government of the Republic of Kazakhstan.
      Footnote. Article 12 as amended by the Laws of the Republic of Kazakhstan dated 05.07.2008 No. 66-IV (the order of enforcement see Article 2); dated 02.04.2010 No. 263-IV (shall be enforced from 01.01.2010); dated 04.07.2013 No. 131-V (shall be enforced upon expiry of ten calendar days after its first official publication).

      Article 13. Powers of local executive bodies of regions (city of republican significance, capital)

      Local executive bodies of regions (city of republican significance, capital) within their competence shall:
      1) form the concessional proposals on facilities, related to municipal property, for inclusion into a list subject to proposals, introduced by individuals and legal entities in the procedure of private initiative in accordance with Article 5-1 of this Law;
      2) make proposals to tender organizer in respect of concession facilities, related to republican property, for solution of issues, related to adherence of social economic and ecological interests of population of the relevant region, during conclusion of concession agreement;
      3) keep a register on concluded concession agreements on concession facilities, related to municipal property;
      4) establish and approve provision on commission in respect of concession facilities, related to municipal property;
      5) be tender organizers in respect of concession facilities, related to municipal property and provided in a list;
      6) conclude concession agreement on concession facilities, related to municipal property and provided in a list, on the basis of decision of commission;
      7) carry out monitoring of concession agreements on concession facilities, related to municipal property, control of their execution and direct the results of monitoring and control to an authorised body on state planning;
      8) take into municipal property the facilities established on the basis of concession agreements;
      9) organize engaging of new concessionaries by open tendering process on a choice of concessionary in case of pre-term termination of previously concluded concession agreement on concession facilities, related to municipal property;
      10) carry out the other powers, assigned on local executive bodies on behalf of a local state administration by the legislation of the Republic of Kazakhstan.
      Footnote. Article 13 as amended by the Laws of the Republic of Kazakhstan dated 05.07.2008 No. 66-IV (the order of enforcement see Article 2); dated 02.04.2010 No. 263-IV (shall be enforced from 01.01.2010); dated 04.07.2013 No. 131-V (shall be enforced upon expiry of ten calendar days after its first official publication).

      Article 14. State support of activity of concessionaries

      1. One or several of the following types of state support may be provided in order to support activity of concessionaries:
      1) sureties of the state on revenue-yielding bonds within
      2) state guarantees on loans, engaged for financing of concessionary projects;
      3) transfer of exclusive rights on intellectual property, owned by the state to concessionary;
      4) provision of the grants in kind in accordance with the legislation of the Republic of Kazakhstan;
      5) co-funding of concessionary projects;
      6) guarantees of consumption by the state of the certain volume of commodities (works, services) in case, if the state is a target consumer of commodities (works, services), carried out by concessionary;
      7) is excluded by the Law of the Republic of Kazakhstan dated 04.07.2013 No. 131-V (shall be enforced upon expiry of ten calendar days after its first official publication).
      2. During establishment of concession facility, that shall not be subject to transfer into state property, the measures of state support, provided by sub-paragraphs 1), 2) and 5) of paragraph 1 of this Article may not be provided to concessionary.
      2-1. Legislation of the Republic of Kazakhstan on public procurement shall not extend to legal relationships, regulated by subparagraph 6) of paragraph 1 of this Article.
      3. Integrated cost of the state concessional obligations, provided in subparagraph 3) of paragraph 1 of Article 7 and subparagraphs 1), 2), 3) 4) and 5) of paragraph 1 of this Article shall not exceed the cost of establishment (reconstruction) of concession facility at expense of funds of concessionary within the frame of concession agreement. In the calculation of integrated cost of the state concessional obligations, the cost of land plots, provided to concessionary for establishment of concession facility, or land plots, located under a reconstructed concession facility within the frame of concession agreement shall not be included.
      Footnote. Article 14 as amended by the Laws of the Republic of Kazakhstan dated 05.07.2008 No. 66-IV (the order of enforcement see Article 2); dated 04.12.2008 No. 97-IV (the order of enforcement see Article 2); dated 02.04.2010 No. 263-IV (shall be enforced from 01.01.2010); dated 04.07.2013 No. 131-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Chapter 3. TRANSFER OF FACILITIES INTO CONCESSION

      Article 15. Procedure for transfer of facilities into concession

      1. Provision of facilities into concession shall be carried out in four stages:
      selection of concessional proposals;
      formation of a list;
      tendering process on a choice of concessionary;
      determination of concessionary and conclusion of concession agreement.
      2. Compulsory condition for providing the surety of the state to concessionary shall be floatation of revenue-yielding bonds on a stock-market of the Republic of Kazakhstan.
      Footnote. Article 15 is in the wording of the Law of the Republic of Kazakhstan dated 05.07.2008 No. 66-IV (the order of enforcement see Article 2); as amended by the Law of the Republic of Kazakhstan dated 02.04.2010 No. 263-IV (shall be enforced from 01.01.2010).

      Article 15-1. Formulation of concessional proposals

      1. Concessional proposals shall be formed by an authorised state bodies of the relevant branch and local executive bodies of regions, cities of republican significance, capital at the stage of development of the projects on strategic plans of state bodies subject to proposals, introduced by individuals or legal entities in the procedure of private initiative, and shall be provided to an authorised body on state planning.
      2. Concessional proposals shall be subject to sector expert examination that includes an evaluation of:
      1) the problems of current condition of the branch, that effect on its further development;
      2) conformity of aims of concessionary project to decision of existing problems in the branch;
      3) alternative variants of realization of concessionary project proceeding from the balance principle of the interests of concessionary and consumers of commodities (works, services), provided by concessionary;
      4) situation in the branch, in cases of realization of concessionary project and absence of this realization;
      5) distribution of profits from realization of concessionary project;
      6) supposed multiplier effect from realization of concessionary project on related branches (spheres) of economy.
      3. An authorised state body of the relevant branch shall coordinate concessional proposals on concession facilities, related to republican property and provided in subparagraph 1 of paragraph 2 of Article 16 of this Law, with an authorised state body on exercise of the right of disposal of republican property.
      Note of RCLI!
      Paragraph 4 shall be enforced from 02.05.2010 (See Article 2 of the Law of the Republic of Kazakhstan dated 02.04.2010 No. 263-IV).
      4. Authorised state bodies of the relevant branch and local executive bodies shall bear the liability, provided by the Laws of the Republic of Kazakhstan for assumption of concessional proposals.
      5. An authorised body on state planning shall engage a specialized organization on the issues of concession for conducting an expert examination of concessional proposals.
      5-1. An authorised body on state planning shall direct an expert opinion, mentioned in paragraph 5 of this Article to an authorised state body of the relevant branch, if a project is republican, as well as to local executive bodies of regions, cities of republican significance, capital, if a project is local.
      5-2. An authorised body on state planning shall form a conclusion on concessional proposals on development or adjustment, as well as carrying out of required expert examinations of feasibility study of concessionary projects and introduce under consideration of Republican budget commission, on the basis of favourable expert opinion, mentioned in paragraph 5 of this Article.
      5-3. A local authorised body on state planning shall form a conclusion on concessional proposals on development or adjustment, as well as carrying out of required expert examinations of feasibility study of concessionary projects and introduce under consideration of the relevant budget commission, on the basis of favourable expert opinion, mentioned in paragraph 5 of this Article.
      6. The procedure for apportionment of the funds on financing of development or adjustment, as well as carrying out of required expert examinations of feasibility study shall be carried out in accordance with the budget legislation of the Republic of Kazakhstan.
      Footnote. Chapter 3 is supplemented by Article 15-1 in accordance with the Law of the Republic of Kazakhstan dated 05.07.2008 No. 66-IV (the order of enforcement see Article 2); is in the wording of the Law of the Republic of Kazakhstan dated 02.04.2010 No. 263-IV (shall be enforced from 01.01.2010); as amended by the Law of the Republic of Kazakhstan dated 24.11.2011 No. 495-IV (shall be enforced upon expiry of ten calendar days after its first official publication).

      Article 15-2. Development or adjustment, as well as carrying out of required expert examinations of feasibility study

      1. Development or adjustment of feasibility study shall be carried out on concessionary projects approved by budget commissions, and contained in concessional proposals.
      2. Requirements for development or adjustment, as well as carrying out of required expert examinations of feasibility study shall be determined by an authorised body on state planning.
      2-1. Development and expert examination of feasibility study shall be carried out in the manner, prescribed by Article 20-1 of this Law on concessional projects, approved by the budget commissions, contained in concessional proposals, whereby authorised state bodies of the relevant branch and local executive bodies, forming concessional proposals adopted decisions on a tendering process on a choice of concessionary using two-stage procedures.
      3. Feasibility study shall contain results of investigation on feasibility and effectiveness of concessionary project, conducted on the basis of economic analysis of profits and expenses.
      In case of change of established technical and economic parameters of concessionary project, entailing a changing of engineering decisions and additional expenses, an authorised state body of the relevant branch and local executive bodies shall conduct adjustment of feasibility study with the further required expert examinations in accordance with the legislation of the Republic of Kazakhstan.
      4. After carrying out of required expert examinations of developed or adjusted feasibility study, an authorised state body of the relevant branch shall direct it to an authorised body on state planning for conducting an economic expert examination.
      5. An authorised body on state planning shall engage a specialized organization on the issues of concession for conducting an economic expert examination of developed or adjusted feasibility study that recommends the types of state support, determined by this Law.
      6. A specialized organization on the issues of concession shall bear the liability for a quality of economic examination of suggested decisions on realization of concessionary project in accordance with Laws of the Republic of Kazakhstan.
      7. An authorised body on state planning shall direct an opinion of economic expert examination, mentioned in paragraph 5 of this Article to an authorised state body of the relevant branch, if a project is republican, as well as to local executive bodies of regions, cities of republican significance, capital, if a project is local.
      8. An authorised body on state planning shall form a conclusion on concessionary projects and introduce under consideration of Republican budget commission, on the basis of favourable conclusion of economic expert examination, mentioned in paragraph 5 of this Article, containing recommendations on possibility of co-funding of this project from a budget.
      9. A local authorised body on state planning shall form a conclusion on concessionary projects and introduce under consideration of the relevant budget commission, on the basis of favourable conclusion of an economic expert examination, mentioned in paragraph 5 of this Article, containing recommendations on possibility of co-funding of this project from a budget.
      10. Conclusions of expert examinations of feasibility study, on which concession agreement is not concluded within three years after its approval, shall be considered to have lost force.
      Footnote. Chapter 3 is supplemented by Article 15-2 in accordance with the Law of the Republic of Kazakhstan dated 02.04.2010 No. 263-IV (shall be enforced from 01.01.2010); as amended by the Law of the Republic of Kazakhstan dated 24.11.2011 No. 495-IV (shall be enforced upon expiry of ten calendar days after its first official publication); dated 04.07.2013 No. 131-V (shall be enforced upon expiry of ten calendar days after its first official publication).

      Article 16. Formation of a list

      1. A list shall be approved by the Government of the Republic of Kazakhstan.
      A list shall be subject to publication in periodicals, distributed in the whole territory of the Republic of Kazakhstan, in Kazakh and Russian languages.
      2. A list shall consist of two chapters:
      1) existing facilities of the state property, the reconstruction and operation of which will be carried out on the basis of concession agreement;
      2) facilities, the establishment and operation of which will be carried out on the basis of concession agreements.
      3. A list shall be formed by an authorised body on state planning in recognition of concession proposals and in accordance with strategic and program documents of the Republic of Kazakhstan, investment opportunities of republican and (or) local budget, annually for the period of three years on a rolling basis.
      4. In relation to facilities, that are not included into a list, the relevant notifications shall be directed to state bodies, provided the relevant proposals, with a motivated justification of their non-admittance.
      5. Concession facilities, that are not transferred into concession shall be included into the relevant list, formed on the next medium-term period.
      Footnote. Article 16 is in the wording of the Law of the Republic of Kazakhstan dated 05.07.2008 No. 66-IV (the order of enforcement see Article 2); as amended by the Law of the Republic of Kazakhstan dated 02.04.2010 No. 263-IV (shall be enforced from 01.01.2010); dated 04.07.2013 No. 131-V (shall be enforced upon expiry of ten calendar days after its first official publication).

      Article 17. Content of tender documentation

      1. A tender organizer shall provide to all potential concessionaries a tender documentation, agreed with an authorised body on state planning in the case prescribed by subparagraph 3) of Article 9 of this Law, and an authorised state body on a budget performance in the cases, prescribed by subparagraph 2) of Article 10 of this Law, and contained the following information:
      1) requirements to documents, that shall be provided by potential concessionaries in confirmation of their conformity of presented qualification requirements;
      2) feasibility study with the exception of cases, mentioned in paragraph 2-1 of Article 15-2 of this Law, description and general technical and qualitative characteristics of facility, suggested for a transfer into concession, including encumbrances and restrictions, technical specifications, plans, drawings and sketches, and if required specifying normative and technical documentation;
      3) location of facility, suggested for a transfer into concession;
      3-1) possible types and eligible volumes of the state support for this concessionary project;
      4) draft concession agreements developed on the basis of standard form agreement;
      5) description of all criteria, including obligations on a local content, on the basis of which a winning concessional application will be determined, as well as specific value of each of these criteria, description of criterion and comparison of concessional applications;
      6) currency or currencies, in which the cost of concession facility shall be expressed, and the rate, which will be applied for adjusting the cost of concession facility to a common currency for the purpose of their comparison and evaluation;
      7) requirements to the language of composition and submission of concessional applications in accordance with the legislation of the Republic of Kazakhstan on languages;
      8) relevant notice on the right of potential concessionary to change or withdraw an application prior to expiration of deadline for submission of applications;
      9) method, place and deadline of submission of applications (but not later than fifteen hours of local time of the work day) and their period of validity;
      10) relevant notice on the right of potential concessionary to provide the part of application, that shall specify the cost of concession facility, directly at the moment of opening of envelops with tender applications;
      11) methods, through which a potential concessionary may ask an explanation on the content of tender documentation, and notice on intension of tender organizer to hold a meeting with potential concessionaries at this stage, that shall be held in the open form and shall be minuted;
      12) conditions of introduction and content of a tender application, as well as conditions of provision of a tender application securing;
      13) place, date and time of opening of envelops with tender applications (but not later than two hours from the moment of expiration of the deadline of tender applications’ submission);
      14) procedures, used for opening of envelops with tender applications and their consideration.
      15) requirements to documents, describing technical decisions on realization of concessionary project in the cases, mentioned in paragraph 2-1 of Article 15-2 of this Law.
      2. A tender organizer shall have the right to charge for provided tender documentation that is not exceeding actual expenses on copying a tender documentation.
      3. A potential concessionary shall have the right to address a request on explanation of provisions of tender documentation, but not later than thirty calendar days until the deadline of the tender applications’ submission. A tender organizer shall be reply to a request within three days from the moment of request registration and inform this explanation to all potential concessionaries, to whom a tender organizer provided a tender documentation, without specifying from whom request has come.
      In case of repeated tendering process, a potential concessionary shall have the right to address a request on explanation of provisions of a tender documentation, but not later than fifteen calendar days until the deadline of the tender applications’ submission.
      4. A tender organizer shall have the right to amend and (or) modify a tender documentation by formalization of a minutes, not later than twenty calendar days until the deadline of submission of the tender applications in its discretion or in reply to request of potential concessionary, and in case of repeated tendering process – within ten calendar days. Amendments and modifications shall be binding.
      A tender organizer shall provide without consideration a text of introduced amendments and (or) modifications to all potential concessionaries, to whom a tender documentation is provided, not later than one business day from the date of adoption of decision on introduction of amendments and (or) modifications in a tender documentation. The deadline of submission of tender applications shall be extended by a tender organizer for the period of not less than thirty calendar days for consideration of these amendments and (or) modifications in tender applications by potential concessionaries, and in case of repeated tendering process – for the period of not less than fifteen calendar days.
      5. A tender organizer shall have the right to hold a meeting with potential concessionaries for explanation of provisions of tender documentation in a certain place and in relevant time, mentioned in a tender documentation. A tender organizer shall draw up a minute, containing requests presented on explanation of tender documentation without specifying of their source, during this meeting, as well as reply to these requests. A minute shall be immediately directed to commission and all potential concessionaries, to which a tender organizer provided a tender documentation.
      6. Tender documentation shall be approved by a tender organizer.
      Footnote. Article 17 as amended by the Laws of the Republic of Kazakhstan dated 05.07.2008 No. 66-IV (the order of enforcement see Article 2); dated 04.12.2008 No. 97-IV (the order of enforcement see Article 2); dated 29.12.2009 No. 233-IV (the order of enforcement see Article 2); dated 02.04.2010 No. 263-IV (shall be enforced from 01.01.2010); dated 09.01.2012 No. 535-IV (shall be enforced upon expiry of ten calendar days after its first official publication); dated 04.07.2013 No. 131-V (shall be enforced upon expiry of ten calendar days after its first official publication).

      Article 18. Specified qualification requirements to potential concessionary

      1. A potential concessionary shall conform to the following requirements for participation in tender on a choice of concessionary:
      1) to have required financial and material resources for fulfilment of obligations under concession agreement;
      2) to be financially reliable, not subject to liquidation, his (her) property shall not be seized, his (her) finance and economic activity shall not be suspended in accordance with the legislation of the Republic of Kazakhstan;
      3) shall not be liable brought to responsibility for failure or improperly fulfilment of obligations on concession agreements concluded within the last three years on the basis of court decision, entered into force;
      4) to have equity capital, that is not less than ten percent in respect of the cost of concession facility, suggested to realization or provide a bank guarantee on amount, that is not less than ten percent in respect of the cost of concession facility, suggested to realization;
      5) to have financial statement confirmed by auditor's report for two previous full financial years;
      6) (is excluded by the Law of the Republic of Kazakhstan dated 04.12.2008 No. 97-IV (the order of enforcement see Article 2).
      1-1. If a potential concessionary is a new legal entity, established in order to realize concessionary projects by individuals and (or) legal entities, then:
      1) a potential concessionary shall conform to qualification requirements, provided by subparagraph 1) of paragraph 1 of this Article;
      2) the legal entities, acting as founders of a new legal entity, shall conform to requirements of subparagraphs 2), 3) and 5) of paragraph 1 of this Article;
      3) total equity capital of individuals and (or) legal entities that established new legal entity, shall conform to conditions of subparagraph 4) of paragraph 1 of this Article.
      2. A potential concessionary shall provide the relevant documents to tender organizer in confirmation of conformity to qualification requirements, provided by paragraph 1 of this Article.
      Legal entities, for which a mandatory conduct of an audit is established by the legislative acts of the Republic of Kazakhstan, shall also provide an auditor's report for the last financial year.
      In case, if the receipt of state guarantee and (or) sureties of the state shall be provided, a potential concessionary shall have a net profit for the last finished financial year or any two of last three finished financial years, according to a financial statement confirmed by auditor's report, with the exception of cases, when a potential concessionary is a new legal entity, established in order to realize a concessionary project by several individuals or legal entities.
      3. In case of provision of unreliable information on qualification requirements, a potential concessionary shall not be allowed to participate in tender on a choice of concessionary within three years from the moment of establishment of this fact.
      Reliability of information on qualification requirements, provided by potential concessionary may be established by a commission, tender organizer, authorised state bodies at any stage of tendering process on a choice of concessionary.
      3-1. A commission, tender organizer, authorised state bodies that established the fact of provision of unreliable information on qualification requirements by potential concessionary shall notify about this to an authorised body on state planning in written with attachment of copies of the documents, confirming these facts, not later than three business days from the date of establishment of this fact.
      3-2. In case of participation in tender on a choice of concessionary of associations of individuals and (or) legal entities in a form of simple partnership, each of mentioned persons shall conform to qualification requirements, provided by subparagraphs 2), 3) and 5) of paragraph 1 of this Article on sum of finance and material resources of all participants of a simple partnership.
      4. A tender organizer shall have not the right to specify the qualification requirements to concessionary that are not provided by this Law. A potential concessionary shall have the right not to provide information, that is not related to qualification requirements.
      Footnote. Article 18 as amended by the Laws of the Republic of Kazakhstan dated 05.07.2008 No. 66-IV (the order of enforcement see Article 2); dated 04.12.2008 No. 97-IV (the order of enforcement see Article 2); dated 02.04.2010 No. 263-IV (shall be enforced from 01.01.2010); dated 04.07.2013 No. 131-V (shall be enforced upon expiry of ten calendar days after its first official publication).

      Article 18-1. Securing of tender applications

      1. Securing of tender application shall be introduced by potential concessionary in order to guarantee, that he (she):
      1) will not recall or change and (or) supplement his (her) tender application after the expiration of deadline of submission of these tender applications;
      2) will provide his (her) concessional proposal in case of recognizing him (her) as a tenderer within period established in tender documentation, and in the following will not recall his (her) concessional proposal;
      3) will conclude concession agreement in case of defining him (her) as a winner of tender.
      2. Securing of tender documentation for participation in tender shall be introduced in amount of one tenth percent of the value of concession facility, suggested to realization.
      3. A potential concessionary shall not introduce securing of tender application, if he (she) takes participation at the first stage of tender on a choice of concessionary in connection with two-stage procedures.
      4. A potential concessionary shall have the right to choose one of the following types of securing of tender application:
      1) guarantee fee, that shall be contributed on account, provided by the budget legislation of the Republic of Kazakhstan for tender organizers, that are the state bodies;
      2) bank guaranty.
      Commission by potential concessionary of actions, that may lead to creation of third parties of the rights to claim in relation to a contributed guarantee fee in whole or in part before the expiration of validity of his (her) tender application shall not be allowed.
      Use of guarantee fee, contributed by potential concessionary by a tender organizer shall not be allowed, with the exception of actions, mentioned in paragraphs 6 and 7 of this Article.
      5. Securing of tender application shall not be returned by a tender organizer in occurrence of one of the following cases:
      1) a potential concessionary recalled or changed and (or) supplemented tender application after the deadline of submission of tender applications;
      2) a potential concessionary, defined as a winner of tender deviated from conclusion of a concession agreement.
      6. In occurrence of one of the cases, provided by paragraph 5 of this Article, the amount of securing of tender application shall be paid to appropriate budgets.
      7. A tender organizer shall return to a potential concessionary a securing of tender application, contributed by him (her) within three business days from the date of occurrence of the following cases:
      1) recall by a potential concessionary of his (her) tender application before the deadline of submission of tender applications;
      2) signing of a minute on access to participation in tender. Mentioned case shall not extend to potential concessionaries, recognized as tenderers;
      3) signing of minutes on results of tender on a choice of concessionary. Mentioned case shall not extend to tenderer, determined as a winner of tender;
      4) entry into force of concession agreement;
      5) expiration of validity of a tender application of potential concessionary.
      Footnote. Chapter 3 is supplemented by Article 18-1 in accordance with the Law of the Republic of Kazakhstan dated 04.07.2013 No. 131-V (shall be enforced upon expiry of ten calendar days after its first official publication).

      Article 18-2. Restrictions, related to participation in tender on a choice of concessionary

      1. A potential concessionary shall have no right to participate in conducted tender, if:
      1) close relatives, husband (wife) or in-laws of heads of this potential concessionary and (or) of authorised representative of this potential concessionary hold the right to decide on a choice of concessionary or are a representative of a tender organizer;
      2) potential concessionary and (or) his (her) employee rendered to tender organizer expert, advisory and (or) other services on preparation of held tenders, as well as participated as general design engineer or sub-designer in development of feasibility study and (or) project (design and estimate) documentation on establishment of facility, that is an object of a tender;
      3) a property of potential concessionary, balance value of which is more than ten percent of the value of relevant basic funds is seized;
      4) potential concessionary has unfulfilled obligations on executive documents and included to the relevant register of debtors by an authorised body in the sphere of securing of execution of executive documents;
      5) finance and economic activity of potential concessionary is suspended in accordance with the legislation of the Republic of Kazakhstan or legislation of the state of potential concessionary that is non-resident of the Republic of Kazakhstan.
      2. A potential concessionary and affiliate of potential concessionary shall not have the right to participate in the same tender.
      Footnote. Chapter 3 is supplemented by Article 18-2 in accordance with the Law of the Republic of Kazakhstan dated 04.07.2013 No. 131-V (shall be enforced upon expiry of ten calendar days after its first official publication).

      Article 19. Tendering process on a choice of concessionary

      1. A choice of concessionary on facilities, included in a list shall be carried out by open tendering process on concessionary projects.
      2. In respect of concession facilities, related to republican property and provided in paragraph 2 of Article 16 of this Law, a tender organizer shall be an authorised state body of the relevant branch.
      In respect of concession facilities, related to municipal property and provided in a list, a tender organizer shall be a local executive body of region (city of republican significance, capital).
      3. A tender organizer shall mandatorily publish information on a tendering process in periodicals, distributed in the whole territory of the Republic of Kazakhstan in Kazakh and Russian languages not less than sixty calendar days prior to the day of tendering process, and in repeated tendering process – not less than thirty calendar days. Information on tendering process shall include data on concession facilities, list of required documents for submission to tender organizer, requirements to potential participants depending on a character of facility on which a tender is announced; on a place, time and date of tendering process.
      4. Consideration and selection of concessional applications shall be carried out by commission, established by the Government of the Republic of Kazakhstan or local executive bodies of regions (cities of republican significance, capital).
      A working body of commission shall be a relevant tender organizer.
      5. If a tender organizer did not receive tender applications within established period or only one application is submitted for participation in tender, the tender shall be considered as invalid, with the exception of third and following tenders on this concession facility.
      6. Procedure for tendering process on a choice of concessionary shall be determined by the Government of the Republic of Kazakhstan.
      Footnote. Article 19 as amended by the Laws of the Republic of Kazakhstan dated 05.07.2008 No. 66-IV (the order of enforcement see Article 2); dated 04.12.2008 No. 97-IV (the order of enforcement see Article 2); dated 04.07.2013 No. 131-V (shall be enforced upon expiry of ten calendar days after its first official publication).

      Article 20. Determination of concessionary and conclusion of concession agreement

      1. Commission shall open envelops with tender applications within a period, time and place, that mentioned in a tender documentation.
      A tender organizer shall direct to an authorised body on state planning the concessional applications, contained in the relevant tender applications, for expert examination.
      In case of necessity, a tender organizer shall have the right to engage independent experts for development of tender documentation, draft concession agreement, independent evaluation of submitted concessional applications, containing in the relevant tender application, as well as for participation in negotiations with potential concessionaries.
      In order to engage independent experts, a tender organizer shall direct an application on financing the services on advisory support of concessionary project to an authorised body on state planning.
      An authorised body on state planning shall introduce an opinion on rendering the services on advisory support of concessionary projects under consideration of a relevant budget commission.
      An authorised body on state planning shall form a list of services on advisory support of concessionary projects that shall be carried out at expense of funds of the relevant allocated budget program of an authorised body on state planning, on the volumes of financing the services on advisory support of each of concessionary project, approved by budget commissions.
      Advisory support of concessionary projects shall be carried out according to the procedure prescribed by the Government of the Republic of Kazakhstan.
      2. A commission shall consider all tender applications, provided by tenderers, subject to conformity with requirements of tender documentation, conclusions on concessional application and evaluation of conformity of potential concessionaries with qualification requirements.
      If a tender is held for the third time and only one tender application is provided in tender, a commission shall consider this tender application in the context of possibility of its realization.
      3. Negotiations on specification of concessionary project and terms of concession agreement shall be held by a commission with a tenderer, the concessional application of whom is recognized as the best on the basis of criteria to the projects, established by the Government of the Republic of Kazakhstan.
      4. Comments and suggestions on concessionary project and concession agreement shall be directed to applicant by commission in the written form within preparation of negotiations.
      The relevant decision of commission shall be adopted following the results of conduct of negotiations.
      During negotiations, the introduction of amendments to the terms of tender, as well as initial parameters and characteristics of concessional application shall not be allowed.
      5. In case, if a tenderer, a concessional application of whom is recognized as the best, refuses to discuss and specify the concessional application and terms of concession agreement in accordance with comments and suggestions of commission, or his (her) proposals are unacceptable in the context of terms of a tender, this concessional application shall not be recognized by commission and the best and new concessional application shall be chosen by open tendering process on a choice of concessionary.
      6. Concessional application shall be approved following results of tender on a choice of concessionary by decision of commission, and an applicant shall be recognised as a winner of a tender.
      A decision of commission shall be established in the form of minutes.
      7. A tender organizer shall conclude concession agreement with a winner of tender on the basis of decision of commission.
      8. Period of conclusion of concession agreement may not exceed ninety calendar days from the date of tendering process.
      9. Data on results of tenders on a choice of concessionary shall be published by an organizer in the periodicals, distributed in the whole territory of the Republic of Kazakhstan in the Kazakh official and Russian languages, with the exceptions of data that is the state secrets or other secret, protected by the Law.
      Footnote. Article 20 is in the wording of the Law of the Republic of Kazakhstan dated 02.04.2010 No. 263-IV (shall be enforced from 01.01.2010); as amended by the Law of the Republic of Kazakhstan dated 04.07.2013 No. 131-V (shall be enforced upon expiry of ten calendar days after its first official publication).

      Article 20-1. Special aspects of tendering process on a choice of concessionary with the use of two-stage procedures

      1. A tender on a choice of concessionary with the use of two-stage procedures shall be held in cases, when:
      1) it is necessary to collect and conduct a study of different innovative, creative, architectonical and planning, organizational and technological treatments, inventions and negotiations with potential concessionaries on arising issues for realization of concessionary project;
      2) it is necessary to perform experiments, investigations or developments.
      2. A tender on a choice of concessionary with the use of two-stage procedures shall be represented as set of the following successive stages:
      1) the following actions shall be carried out at the first stage:
      formation of technical specifications by a tender organizer on the basis of expert examination of concessional proposal, development and confirmation of tender documentation by a tender organizer;
      publication of information on a choice of concessionary with the use of two-stage procedures in the periodicals, distributed in the whole territory of the Republic of Kazakhstan in the Kazakh official and Russian languages;
      provision of technical specifications and tender documentation by a tender organizer to persons, interested in participation at the first stage on a choice of concessionary with the use of two-stage procedures;
      conduct of qualified selection of potential concessionaries;
      discussion of the issues, concerning technical, qualitative and (or) other characteristics of technical specification with potential concessionaries;
      submission of tender applications with technical proposals, developed in accordance with technical specification by tenderers that passed qualified selection;
      expert examination of technical proposals of tenderers by an authorised state body of the relevant branch and legal entity, authorised by the Government of the Republic of Kazakhstan on carrying out of state expert examination of projects, for the purpose of determination their conformity or non-conformity to town-planning and technical regulations, conditions and requirements of the state normative standards, directed on securing the state, public and private interests, favourable and safe conditions of human activity, stable functioning of projected facilities, as well as value of technical proposal;
      choice of no less than two tenderers, technical proposals of which conform to technical specification of a tender organizer;
      sending of invitations by a tender organizer to tenderers, the technical proposals of which are recognized as conformal to technical specification at the first stage for participation at the second stage of a tender with the use of two-stage procedures;
      2) the following actions shall be carried out at the second stage:
      submission of tender applications with feasibility study of concessionary project by tenderers, the technical proposals of whish recognized as conformal to technical specification at the first stage;
      sending of feasibility study of concessionary project of tenderers to an authorised body on state planning by a tender organizer for carrying out expert examination;
      consideration by commission of all tender applications, provided by tenderers, subject to expert opinions on concessional application, carried out in accordance with paragraph 1 of Article 20 of this Law;
      carrying out actions, provided by paragraphs 3, 4, 5, 6, 7, 8 and 9 of Article 20 of this Law.
      Footnote. Chapter 3 is supplemented by Article 20-1 in accordance with the Law of the Republic of Kazakhstan dated 04.07.2013 No. 131-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Chapter 4. CONCESSION AGREEMENT

      Article 21. Content of concession agreement

      1. Concession agreement shall contain:
      1) data on concession facility, its description, as well as data on property assets, technical condition, performance period, initial, residual and reinstatement value of a transferred concession facility;
      2) conditions on the rights of concessionary to concession facility as well as on the rights to incomplete concession facility in case of termination of concession agreement, and (or) the rights on carrying out of a certain type of activity, conditions on property rights on the results of intellectual and creative activity, arising during execution of terms of concession agreement;
      3) conditions and volumes of carrying out the reconstruction of facilities in order to provide to concessionary the required quantity and quality of services;
      4) sources of compensation for expenses and acquisition of income of concessionary;
      5) procedure for formation and confirmation of tariffs (prices, rate of charge) on commodities (works, services);
      6) condition on sizes of investments, as well as investments to the basic funds, periods, sources and conditions of financing concessionary projects according to developed business plan (work program);
      7) types of activity (works (services) performed (provided) under the terms of concession agreement);
      8) standards of quality of commodities (works, services) provided by concessionary, according to concession agreement;
      9) validity period of concession agreement;
      10) rights and obligations of parties;
      11) requirements on environmental protection and safe conduct of works;
      12) procedure and terms of transfer of concession facility by parties, including persons, authorised to accept a facility, and requirements to its quality, as well as procedure and terms of transferring other property, that is not a part of concession facility, as well as specifying the right, on the basis of which mentioned property shall be transferred;
      13) liability of parties;
      14) conditions of modification and termination of concession agreement;
      15) location (legal address) and banking details of parties;
      16) procedure for carrying out the control over performance of concession agreement by concession provider;
      17) criteria of evaluation on fulfilment of accepted obligations by concessionary, payment of a penalty in case of their non-performance or improper performance and procedure for reduction of the volume of the state concessional obligations;
      18) types, volumes, periods and conditions of provision of the state support in case of its provision in accordance with Article 14 of this Law;
      19) obligations on a local content;
      20) obligations of a concessionary on providing the annual program of the procurement of commodities, works, services for the forthcoming year not later than 1 February of the year planning for procurement and information on purchased commodities, works, services to an authorised body in the field of regulation of commercial activity in the forms and deadlines, established by this body;
      21) distribution of risks between parties;
      22) conditions and periods of transfer of disutility of maintaining a property, transferred under concession agreement, as well as the risks of accidental loss or accidental injury of mentioned property;
      23) data on authorised state bodies, representing the interests of concession provider;
      24) deadlines for performance of works on establishment (reconstruction) of concession facility, putting into service, as well as procedure for extension of this deadline;
      25) rights and obligations of other persons, engaged for execution of concession agreement, particularly for giving a consent on performance of certain actions, collection and distribution of money under concession agreement, carrying out of other payments in the volume and procedure, according to concession agreement, as well as performance of other rights and obligations;
      26) exceptional cases of unilateral modification of terms of concession agreement and (or) its unilateral non-performance;
      27) procedure for resolution of disputes under concession agreement;
      28) procedure for reimbursement for expenses of parties in case of early termination of concession agreement.
      2. Concession agreement may also provide:
      1) methods of securing performance of obligations of concession agreement parties;
      2) distribution of incomes between concession provider and concessionary, in connection with carrying out of activity, provided by concession agreement;
      3) approval of organization, engaged by concessionary for carrying out of operation of concession facility and essential terms of agreement with it;
      4) approval of contractor (general contractor), engaged by concessionary for establishment (reconstruction) of concession facility and essential terms of agreement with him (her);
      5) other terms, that do not contradict the legislation of the Republic of Kazakhstan.
      3. Terms of concession agreement shall remain in force for its whole validity period, with the exception of cases, when modification of concession agreement is executed upon agreement of parties.
      4. Concession agreement shall provide a condition of concession provider to unilaterally modify terms or terminate a concession agreement for public and state interest; a concession agreement shall include the exhaustive list of these terms, that do not contradict the legislation of the Republic of Kazakhstan, as well as when these actions are committed for the purpose of securing of the national and ecological safety, health care and good morals.
      5. In case of implementation of the right, mentioned in paragraph 4 of this Article by a concession provider, a concession provider shall compensate to a concessionary additional expenses, related to modifications of terms of concession agreement, as well as compensate for losses, incurred by a concessionary in connection with termination of concession agreement.
      6. A concessionary shall have the right to pledge his (her) rights under concession agreement only with the written consent of a concession provider.
      Debt assignment or transfer of a debt of concessionary under concession agreement shall be allowed with the consent of concession provider upon condition of conformity of a person (persons), to which the rights and obligations of concessionary are to be transferred to requirements, established by Article 18 of this Law.
      Footnote. Article 21 is in the wording of the Law of the Republic of Kazakhstan dated 04.07.2013 No. 131-V (shall be enforced upon expiry of ten calendar days after its first official publication).

      Article 21-1. Types of concession agreement

      1. A concession agreement shall be concluded in the following types:
      1) concession agreement, providing establishment of concession facility by concessionary with the following transfer of concession facility into the state property;
      2) concession agreement, providing joint activity of concessionary and concession provider on establishment (reconstruction) and operation of concession facility;
      3) concession agreement, providing transfer of concession facility, being in the state property in trust management or in property lease (lease) of concessionary for the purpose of reconstruction and operation;
      4) concession agreement, providing transfer of concession facility, being in the property of concessionary, in property lease (lease) of concession provider or person, authorised by him (her), as well as with the right of redemption of concession facility by a concession provider.
      2. A concession agreement may include the elements of one or several types of agreements, provided by paragraph 1 of this Article, as well as include the elements of other agreements that are not prohibited by the legislation of the Republic of Kazakhstan, aimed at establishment (reconstruction) and operation of concession facility.
      3. A concession agreement may not include terms, directed on alienation in a private property of concession facility, being in the state property.
      Footnote. Chapter 4 is supplemented by Article 21-1 in accordance with the Law of the Republic of Kazakhstan dated 04.07.2013 No. 131-V (shall be enforced upon expiry of ten calendar days after its first official publication).

      Article 22. Form of concession agreement

      1. A concession agreement shall be concluded in written.
      2. A concession agreement shall be subject to state registration in the manner, prescribed by the legislation of the Republic of Kazakhstan.

      Article 23. Validity period of concession agreement

      1. A concession agreement shall be concluded for the period up to thirty years.
      2. A concession agreement may be extended by conclusion of a new concession agreement for additional period, determined by agreements of parties upon condition of performance of obligations, accepted by concessionary.
      A concessionary, that properly performed his (her) obligations shall be entitled to conclude a new agreement without conducting a tender.
      3. During conclusion of concession agreement for a new period, terms of agreements may be modified upon agreement of parties.

      Article 24. Termination of concession agreement

      A concession agreement, together with common grounds for termination of obligations, shall be terminated by:
      1) dissolution or expiration of validity period of concession agreement;
      2) liquidation of concessionary;
      3) (excluded by the Law of the Republic of Kazakhstan dated 05.07.2008 No. 66-IV (the order of enforcement see Article 2);
      4) in other cases, provided by the Civil legislation of the Republic of Kazakhstan or a concession agreement.
      Footnote. Article 24 as amended by the Law of the Republic of Kazakhstan dated 05.07.2008 No. 66-IV (the order of enforcement see Article 2).

      Article 25. Rights and obligations of a concession provider

      1. A concession provider shall have the right:
      1) to hold negotiations with concessionary on terms of concession agreement;
      2) to claim from concessionary the compensation for the losses in case of deterioration of concession facility, that happened due to the fault of a concessionary;
      3) to carry out inspections of finance and economic activity of concessionary by engaging an audit organization, without intruding in operating activity of concessionary and progress of concession agreement’s execution;
      4) to carry out the control of compliance with the legislation of the Republic of Kazakhstan, terms of concession agreement and demand fixing of committed defaults;
      5) to claim the dissolution of concession agreement in case of violation of its terms by a concessionary;
      6) to exercise the other rights in accordance with the Laws of the Republic of Kazakhstan and a concession agreement.
      2. A concession provider shall:
      1) transfer the right to concession facility to concessionary on conditions and within the periods, provided by a concession agreement;
      2) agree draft concession agreements with interested state bodies;
      3) without undue delay transfer documents, provided by concession agreement and confirming the rights of concessionary to concession facility;
      4) annually provide reporting information to the relevant state body, carrying out maintenance of register on concluded concession agreements;
      5) observe terms, provided by concession agreement;
      6) transfer concession facilities, that are free from the third party's rights or with encumbrances and restrictions, mentioned in a tender documentation, provided to potential concessionaries in accordance with paragraph 1 of Article 17 of this Law;
      7) comply with other requirements, established by the Laws of the Republic of Kazakhstan.
      Footnote. Article 25 as amended by the Law of the Republic of Kazakhstan dated 04.07.2013 No. 131-V (shall be enforced upon expiry of ten calendar days after its first official publication).

      Article 26. Rights and obligations of a concessionary

      1. A concessionary shall have the right:
      1) to exercise the rights in respect of concession facility on conditions, provided by concession agreement;
      2) to be a subject of investment preferences, provided in accordance with the legislation of the Republic of Kazakhstan on investments;
      3) to receive a compensation for expenses, incurred in connection with execution of concession agreement;
      4) to claim dissolution of concession agreement in case of violation of its terms and compensations for losses, entailed by a violation of obligations;
      5) to claim a compensation for losses in case, if modification of terms of concession agreement entails losses of concessionary;
      6) to exercise other rights in accordance with the Laws of the Republic of Kazakhstan.
      2. A concessionary shall:
      1) preserve a profile of concession facilities;
      2) conduct operations (render the services), provided by agreement;
      3) finance facilities of social sphere, included in a property complex of concession facility, in the manner, prescribed by the legislation of the Republic of Kazakhstan;
      4) comply with the legislation of the Republic of Kazakhstan in the field of labour, public employment and environmental protection;
      5) transfer concession facility to concession provider given encumbrances and restrictions, existed for the moment of conclusion of concession agreement and in a proper technical condition, in accordance with terms of concession agreement after a termination of the period, on which concession agreement was concluded;
      6) comply with other requirements and terms, established by the Laws of the Republic of Kazakhstan and a concession agreement;
      7) open a special account in a bank, determined by concession agreement, in accordance with the budget legislation of the Republic of Kazakhstan for financing of concessionary project in cases of provision of surety of the state on revenue-yielding bonds within concession agreement;
      8) ensure intended use of the funds, engaged for realization of concessionary project.
      Footnote. Article 26 as amended by the Laws of the Republic of Kazakhstan dated 05.07.2008 No. 66-IV (the order of enforcement see Article 2); dated 02.04.2010 No. 263-IV (shall be enforced from 01.01.2010); dated 04.07.2013 No. 131-V (shall be enforced upon expiry of ten calendar days after its first official publication).

      Article 26-1. Private concessional obligations

      1. Private concessional obligations shall be accepted by a concessionary upon conditions, specified in concession agreement.
      2. A concession provider shall carry out a control of compliance with private concessional obligations in accordance with the manner, prescribed in concession agreement.
      Footnote. Chapter 4 is supplemented by Article 26-1 in accordance with the Law of the Republic of Kazakhstan dated 04.07.2013 No. 131-V (shall be enforced upon expiry of ten calendar days after its first official publication).

Chapter 5. FINAL PROVISIONS

      Article 27. Resolution of disputes

      1. Disputes, related to a transfer of facilities of the state property into concession, shall be resolved in the manner prescribed by the legislation of the Republic of Kazakhstan and concession agreement.
      Disputes, related to execution and termination of concession agreement shall be resolved by negotiations in accordance with requirements of the legislation of the Republic of Kazakhstan and procedures of disputes resolution agreed in concession agreement.
      2. If disputes, related to execution and termination of agreement may not be resolved in accordance with paragraph 1 of this Article, then parties shall have the right to resolve a dispute in accordance with requirements of the legislation of the Republic of Kazakhstan in a court, as well as by applying to international arbitration in accordance with the Law of the Republic of Kazakhstan On International Arbitration.
      Footnote. Article 27 as amended by the Law of the Republic of Kazakhstan dated 03.07.2013 No. 125-V (shall be enforced upon expiry of ten calendar days after its first official publication).

      Article 28. Liability for violation of the legislation of the Republic of Kazakhstan on concessions

      A violation of the legislation of the Republic of Kazakhstan on concessions shall entail a liability, established by the Laws of the Republic of Kazakhstan.

      Article 29. Enforcement of this Law

      1. This Law shall enter into force from the date of its official publication.
      2. Concession agreements, concluded before enforcement of this Law shall preserve their validity prior to expiration period, established in these agreements.

      The President
      of the Republic of Kazakhstan