What is a Subconcession?

A subconcession is a contractual agreement whereby one party (the subconcessionaire) grants to another party (the subconcessionee) the right to perform specific tasks or provide certain services within the scope of a larger project or concession.

In other words, a subconcession is a form of contracting out where the main concessionaire (the party who has been granted the original concession) delegates certain responsibilities or tasks to a third party (the subconcessionaire), who then performs those tasks on behalf of the main concessionaire.

Subconcessions are commonly used in large-scale infrastructure projects, such as public-private partnerships (PPPs), where the main concessionaire may not have the resources or expertise to fulfill all aspects of the project. By granting subconcessions to specialized companies or individuals, the main concessionaire can tap into their expertise and capabilities, while still maintaining overall control over the project.

For example, in a PPP for the construction and operation of a toll road, the main concessionaire may grant subconcessions to different companies for the design and construction of specific sections of the road, or for the provision of maintenance services over a certain period of time. In this case, the main concessionaire would remain responsible for the overall management and financing of the project, while the subconcessionaires would be responsible for their respective areas of expertise.