The development of methods of calculating the concession fees

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Developed and advanced way of calculation concession fee than provided by the Government Methodology from 04.02.2016. It based on the critical review of existing legal regulation in Ukraine, considering the inflation factor according to international requirements (UNIDO). This approach provides a reduced risk of members of concession agreement, protection of the project member’s interests and the financial viability of the project. Ukraine should follow international practice and rely on concession fee as an instrument of regulation, not only as a fiscal instrument. During the concession contest, where the criteria for selection of the winner is a concession fee, the Government should provide the object to concession if the amount of the payment will be higher than the maximum profit that can get a monopoly. Fee may take the form of a single or an annual payment. In the latter case, reasonable discount rate must be set to calculate the present value of the stream of payments. Confirmed: the need pre-planning examination of normative documents, the use of sentences of the international experience of evaluation of projects, the revised rate of interest a concession payment, the desirability of calculating asset values using their average annual cost, taking into account the special conditions of the project.

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