Nautical Term: Concession
Definition of Concession
A concession is an agreement between a private party, known as the concessionaire, and an authorized public entity. In this arrangement, the concessionaire leases assets from the public entity for an extended period. The concessionaire is responsible for financing specified new fixed investments during the period and for providing specified services associated with the assets.
For example, a port authority may enter into a concession agreement with a private company to operate and maintain the port’s cargo handling equipment for a period of 10 years. The private company would be responsible for financing any new investments in the equipment during the concession period, as well as for providing any associated services, such as repairs and maintenance.
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