Natalia Diatlova has commented on the nuances of using federally owned land plots in regional concessions

Natalia Diatlova - Partner

The Investment Committee of St Petersburg started looking for investors for three buildings to be turned into hotels, museums or medical centres under under concession. The dilapidated wooden buildings may be of interest to investors because of the large land plots under them. However, the one of the building is owned by Russia and has been handed over to St Petersburg State University for perpetual use.

Natalia Diatlova, Partner and Head of PPP practice at Maxima Legal, explained to Delovoy Peterburg newspaper, that the legislation contains no restrictions for such cases. “Nevertheless, absence of direct prohibition generates significant risks especially for the concessionaire and puts it in a vulnerable position because it does not allow the grantor – subject of the Russian Federation (even if it wishes) to fulfill its obligations to sign the lease (sublease) agreement on the federal land plot within 60 working days after the concession agreement is signed,” the expert stressed.

Natalia also pointed out that in practice such issues arise more than once; as a general rule the execution of the concession agreement is not started or is delayed to the maximum extent possible until the land plot transfer procedure is completed.

To read the full article (in Russian) please visit Delovoy Peterburg newspaper`s website >>>