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Provision of the management and use concession of Lazdijai hippodrome.

CONCESSION CONTRACT MATTER AND DEFINITION

1. The executive institution of Lazdijai Region Municipality Administration (hereinafter – Providing Institution), which according to its competence and powers set out in the Law on the Local Self-Government of the Republic of Lithuania is liable for the implementation of the functions implemented and ensured by providing the concession, will provide the legal entity-concessionaire specially established by the contest winner under the terms and conditions foreseen in the concession contract with the concession, i.e., permission to execute the economic activity, provide public services, manage and use the property in Lazdijai hippodrome located in Bukta Village 2, Lazdijai Community, Lazdijai Region Municipality (size of the object territory – 13,40 ha) on the basis of the lease contract; and the concessionaire will accept the major part of risk related with the economic activity and rights and obligations set out in the concession and lease contracts. The concessionaire’s fee for this kind of activity will consist of provision of the right to undertake the economic activity and income from the economic activity together with the compensation paid by the Providing Institution to the Concessionaire considering the taken risk.

2. Definition of the main technical, financial and commercial conditions of the concession project:

2.1. The contract shall be executed by the legal entity specially established by the contest participant recognized contest winner-concessionaire. The concessionaire shall be established at Lazdijai Region Municipality;

2.2. The contest participant recognized contest winner warrants to the Providing Institution for proper execution of all the concessionaire’s duties according to the concession contract in the total period of validity of the concession contract without being paid;

2.3. The concession contract is concluded for a 25-year period;

2.4. The Providing Institution leases a 13,40 ha parcel to the concessionaire on the basis of the lease contract without an auction (separate contest) and enables it to manage and use the property in the hippodrome on the basis of the lease contract for the total period of validity of the concession contract:

2.4.1. tribune (unique No. 4400-2038-2127);

2.4.2. geothermal heating (unique No. 4400-2241-9261);

2.4.3. tower of arbiters (unique No. 4400-2240-3249);

2.4.4. other structures (engineering) – fence (unique No. 4400-2240-3260);

2.4.5. other structures (engineering) – shed for horses (unique No. 4400-2038-2168);

2.4.6. other structures (engineering) – ground pavements (unique No. 4400-2240-3281);

2.4.7. sewage line – rain drainage networks (unique No. 4400-2240-8702);

2.4.8. sewage line – domestic sewage networks (unique No. 4400-2408-8713);

2.4.9. water supply line – water supply networks (unique No. 4400-2240-8686);

2.4.10. sewage line – domestic sewage networks (unique No. 4400-2240-8757);

2.4.11. stables (unique No.4400-2038-2138);

2.4.12. pertinent of the above-mentioned property and other property transferred to the concessionaire according to the concession contract;

2.5. The concessionaire obligates to pay a rent to the landlord for the lease of the property indicated in clauses 2.4.1-2.4.12 – 658,35 euro per month.

2.6. The concessionaire obligates to ensure continuous execution of the economic activity and public service provision in Lazdijai hippodrome in accordance with the legal acts, provisions of the concession contract and lease contracts, financial activity model submitted by the contest participant and good business practice in the total period of validity of the concession contract at the own risk and expenses;

2.7. The concessionaire obligates to do the following at the own risk and expenses:

2.7.1. to make the minimum 11584,80 euro investments for the development of at least 10 trade places at the hippodrome within 4 months since coming into force of the concession contract. Unless the investments can be made in a seasonal aspect or under the influence of other circumstances, the concessionaire is entitled to request to prolong a 4-month term for a reasonable period;

2.7.2. in case the participant indicates it in the tender, the concessionaire obligates to create the conditions for the development process in accordance with the requirements of the tender and specifications.

2.8. The Providing Institution gives an agreement to the concessionaire to perform construction works of new property in the parcel. The new property developed by the concessionaire belongs to the concessionaire under the proprietary right and the concessionaire will retain the proprietary right to this property except trade places on the termination of the concession contract;

2.9. The concessionaire obligates to ensure the execution of its obligations according to the concession contract in the total period of validity of the concession contract with a bank security or its equivalent that would be acceptable for the Providing Institution, for example, by mortgaging or pledging the real estate or with a security writing of a financial institution or insurance company;

2.10. The concessionaire obligates to conclude the insurance contracts indicated in the concession contract and retain them in the total period of validity of the concession contract;

2.11. The Providing Institution obligates to pay a compensation to the concessionaire for any events which risk the Providing Institution has taken, but the amount cannot exceed the amount indicated in the tender of the contest participant recognized contest winner in the total period of validity of the concession contract;

2.12. The Concessionaire obligates pay a concession fee to the Providing Institution that consists of a fixed and a variable part. The fixed part of the concession fee consists of the amount indicated in the tender of the contest participant. The fixed part of the concession fee is paid to the Providing Institution every year of validity of the concession contract starting from the 6^th year and it is paid until the end of the concession contract. The variable part of the concession fee consists of at least 0,5 per cent of the annual sale income of the concessionaire plus applicable VAT. The variable part of the concession fee is paid to the Providing Institution every year of validity of the concession contract starting from the 3^rd year of validity of the concession contract (i.e., the variable part is not paid for 2 first years of validity of the concession contract) and it is paid until the end of the concession contract;

2.13. The public services provided by the concessionaire shall comply with the following requirements:

2.13.1. they shall satisfy the interests and needs of more than one social group or separate persons;

2.13.2. they shall be provided constantly and under non-discriminative conditions;

2.13.3. at least 6 horse sport events shall be organized every year of 5 first years of validity of the concession contract and at least 1 horse sport event shall be international and the average number of participants of every horse sport event (sportspeople) shall be 40;

2.13.4. at least 6 horse sport events shall be organized from the 6^th to the 25^th year of validity of the concession contract and at least 1 horse sport event shall be international and the average number of participants of every horse sport event (sportspeople) shall be 20;

2.13.5. the concessionaire shall prepare at least 10 trade places for use during every event including horse sport events;

2.13.6. at least 20000 visitors shall be attracted to horse sport events and other events at the hippodrome in 3 first years of validity of the concession contract;

2.13.7. the concessionaire shall get the property necessary for the public service provision on the own account.

3. The detailed requirements for the implementation of the concession project are provided in the project of the concession contract. The detailed description of the concession project including the definition of the technical conditions of the project and requirements for its implementation, safety and environmental requirements and definition of the main contract provisions is provided in the appendix to the concession contract “Specifications”.

ACQUIREMENT OF THE CONTEST PROVISIONS

4. The contest provisions are issued for free to persons, who submit applications, from 04-04-2016 to 25-04-2016 at Lazdijai Region Municipality Administration at the address Vilniaus str. 1, Lazdijai, room 216, in the working hours: from 8.00 a.m. to 5.00 p.m. from Monday to Thursday and from 8.00 a.m. to 3.45 p.m. on Friday and in case it is indicated separately, the contest provisions are also issued by e-mail.

CONTEST EXECUTION PROCEDURES

5. The contest on the provision of concession is executed in an open contest in accordance with the Law on Concessions of the Republic of Lithuania, other legal acts and contest provisions. The contest is organized and executed by the committee assigned by the Providing Institution.

6. The contest on the provision of concession is executed without advance selection of the contest participants and stages of submission and assessment of preliminary non-obligating tenders in the following stages:

6.1. announcement of the contest and its provisions;

6.2. submission of comprehensive obligating tenders;

6.3. assessment of comprehensive obligating tenders;

6.4. negotiations and conclusion of the concession contract.

7. One contest participant may submit one tender only. The participants are prohibited to submit alternative tenders.

8. The contest participant shall submit the following with the tender:

8.1. declaration of honesty in accordance with the form provided in appendix 2 of the contest provisions;

8.2. promise of confidentiality in accordance with the form provided in appendix 3 of the contest provisions;

8.3. suggestions and comments on the specification provisions and requirements for their implementation;

8.4. suggestions and comments on the concession contract provisions or related stipulations;

8.5. in case the contest participant is a group of subjects, the contract on the joint activity (original) or its ratified copy is submitted. The contract shall foresee solidary liability of all the parties of the contract on the joint activity for the non-execution of obligations to the Providing Institution and the person that represents the group of subjects shall be indicated;

8.6. tender security;

8.7. documents proving that the contest participant may be provided the concession;

8.8. personal documents of the contest participant proving a right to represent the contest participant;

8.9. financial activity model complying with the requirements set out in appendix 5 to the contest provisions;

8.10. other documents.

9. In order to secure the tender, the participant shall submit a tender security that is equal to 2896,20 euro. In case the participant is a group of subjects acting on the basis of the contract on the joint activity, the tender security may be issued to any member of the group of economic subjects or to the total group of the economic subject. The tender security shall be prepared in accordance with the form provided in appendix 6 to the contest provisions.

TENDER ASSESSMENT CRITERIA

10. The tenders, which have not been rejected by the committee, are assessed according to the following data of the tender submitted by the contest participant:

10.1. maximum compensation size that cannot exceed 150000,00 euro.

10.2. fixed part of the concession fee paid every year of validity of the concession contract starting from the 6^th year of validity of the concession contract;

10.3. taken obligations related with the creation of conditions for the development process.

SUBMISSION OF ENVELOPES WITH TENDERS

11. The tenders shall be submitted by the deadline of the tender submission, i.e., 02-05-2016 12:00.

12. The participants shall submit envelopes with their tenders to Lazdijai Region Municipality Administration by prepaid registered mail or through a post courier to Lazdijai Region Municipality Administration at the address Vilniaus str. 1, Lazdijai, the Republic of Lithuania, or bring personally to room 202 in the working hours: from 8.00 a.m. to 5.00 p.m. from Monday to Thursday and from 8.00 a.m. to 3.45 p.m. on Friday. The name and address of the Providing Institution, name of the contest and name and address of the contest participant shall be written on the envelope. The record “Not to open until the deadline of the tender submission” (by indicating the date and time) shall also be indicated on the envelope.

13. The moment of getting the envelope with the tender at Lazdijai Region Municipality Administration is considered moment of submission.

14. The tender and documents submitted with the tender are written in Lithuanian or in a foreign language with a translation into Lithuanian approved in accordance with the legal acts.

OPENING OF ENVELOPES WITH TENDERS

15. The envelopes with tenders are opened at the meeting of opening the envelopes with tenders that is held in the rooms of Lazdijai Region Municipality Administration at the address Vilniaus str. 1, Lazdijai, the Republic of Lithuania, room 2008, 02-05-2016 1.00 p.m. Just the participants having submitted their tenders are entitled to participate in the meeting of opening the envelopes with tenders.

ADDITIONAL INFORMATION

16. All questions, comments and inquiries shall be addressed to the following person:

Jolita Galvanauskiene, head of the Division of Economics of Lazdijai Region Municipality Administration. Address: Vilniaus str. 1, room 200, LT-67106 Lazdijai, Republic of Lithuania. Telephone: +370 318 66 110. Fax: +370 318 51 351. E-mail: jolita.galvanauskiene@lazdijai.lt.