Last edited 27 Dec 2019

The meaning of concession in the construction industry

Generally, a thing conceded is a concession. When something is applied for or requested – whether a right, privilege or point of fact (e.g in an argument) – and it is granted, then the thing that has been granted is a concession.

Examples of a concession are:

  • The right to roam across somebody else’s land.
  • A business that is granted a licence to operate a concession within another business e.g a newspaper stall in a station.
  • Conceding a point in an argument e.g as a way to admit defeat.

In the built environment, a concession is a negotiated contract that grants rights to a company by a government, local authority, or other legal entity.

For example, a contractor or other supplier which funds and undertakes works in return for payment through capitalising on the finished works. For example, a main contractor is given the concession to apply tolls to a bridge for a certain period (e.g 30 years) as full or part payment for having built the bridge. Such an arrangement may be part of a complex private finance initiative (PFI).

See concession agreement for a more detailed explanation of the concept.

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