Service Concession Arrangement
(IFRIaC 12)
Service Concession Arrangement
• It is aqdn arrangwdement whereby a government or other
public sector body (gqwrantor) asdcontracts with a private
operator to develop (or upgradeasd), operate and maintain
the sdgrantor’s infrastructure assets such as roads, bridges,
tunnels, airports, energy distribution networks, prisons or
hospitals.dq
• It is referreasd to as a 'public-to-private' arrangement.
• The arrangement is governed by a contract between the
operator and dthe government (the grantor) that sets out
performance as, mechanisms for adjusting prices or rates
and arrangement for arbitrating disputes.
• “build-operatde-transfer” (BOT) arrangement
Common featuresas
• Grantor is a pudblic sector entity, governmental body, or
private dasdsector asentity
• Operator is resdponsible for some of management of
infrastructwure and related services and does not merely act
as an agentasdsa
• Contract sets dasce revisions over the period of
arrangement
• Operator is obligedqd to hand over the infrastructure to the
grantor in a fspecified condition for little or no incremental
consideration irrespective of which party initially financed it