Article 177. Concession agreement and transfer of operational risk.

1. The awarding of a concession involves the transfer to the concessionaire of an operational risk linked to the execution of the works or the management of the services and includes a risk on the demand side or on the supply side or both. Demand-side risk means the risk associated with actual demand for the works or services that are the subject of the contract. Supply-side risk means the risk associated with the offer of the works or services that are the subject of the contract, in particular the risk that the provision of services does not correspond to the qualitative and quantitative level deduced in the contract. 2. It is considered that the concessionaire has assumed the operational risk when, under normal operating conditions, the recovery of the investments made or the costs incurred for the management of the works or services covered by the concession is not guaranteed. The portion of the risk transferred to the dealer must result in effective exposure to market fluctuations such that any estimated potential loss suffered by the dealer is not purely nominal or negligible. For the purposes of evaluating the operational risk, the net present value of all the investments, costs and revenues of the concessionaire must be taken into consideration. 3. The operational risk, relevant for the purposes of qualifying the economic operation as a concession, is that which derives from exceptional factors which are not foreseeable and cannot be attributed to the parties. There are no risks associated with mismanagement, contractual breaches by the economic operator or causes of force majeure. 4. Contracts remunerated by the granting body without any monetary consideration as a price are configured as concessions if the recovery of the investments made and the costs incurred by the operator depends exclusively on the demand for the service or good, or on their supply. In economic operations including a risk only on the supply side, the contract provides that the consideration is paid only in relation to the availability of the work, as well as a system of penalties that proportionally reduces or cancels the consideration due to the economic operator in periods of reduced or lack of availability of the work, reduced or failure to provide services, or in the event of failure to achieve the qualitative and quantitative levels of the service undertaken by the concessionaire. The variations in the consideration must, in any case, be able to significantly affect the net present value of the overall investment, costs and revenues. 5. The interest structure deduced in the concession contract must guarantee the conservation of economic-financial balance, meaning the simultaneous presence of the conditions of economic convenience and financial sustainability. Economic-financial equilibrium exists when the expected revenues of the project are able to cover the operating costs and investment costs, to remunerate and repay the debt capital and to remunerate the risk capital. 6. If the economic operation cannot achieve economic-financial balance on its own, public support intervention is permitted. Public intervention may consist of a financial contribution, the provision of guarantees or the transfer of ownership of real estate or other rights. The provisions on concessions do not apply, but those on procurement, if the granting body, through contractual clauses or other sectoral regulation acts, relieves the economic operator from any potential loss, guaranteeing him a minimum revenue equal to or greater than the investments made and the costs that the economic operator must bear in relation to the execution of the contract. The provision of compensation in the event of early termination of the concession for reasons attributable to the granting body, or for reasons of force majeure, does not exclude that the contract is configured as a concession. 7. For public accounting purposes only, the contents apply of Eurostat decisions. In any case, the possible recognition of a public contribution, in an amount higher than the percentage indicated in the Eurostat decisions and calculated according to the methods established therein, does not allow its accounting off-balance sheet.