The Current Situation Regarding PPPs and Concessions in the EU Olivier Moreau European Commission, D

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The Current Situation Regarding PPPs and
Concessions in the EUOlivier MoreauEuropean
Commission, DG MARKT.C1
 Concessions and Public-Private
Partnerships Ankara, 10-11 March 2008

• http//europa.eu.int/comm/internal_market/publicpr
  ocurement

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Importance of PPPs and concessions

• Cooperation of public authorities and the private
  sector leads to
• - more private financing of projects
• - less involvement of public authorities
• - make use of the experience and methods of the
  private sector
• - more efficiency

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Importance of PPPs and concessions

• Such cooperations are used especially in
  high-value infrastructure or environmental
  projects
• The Commissions interest in regulating these
  areas to ensure real competition
• Alignment to the acquis public contracts and
  concessions should have priority

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The current legal situation

• EU legislation regulating concessions and PPPs
• - The EC Treaty (general principles)
• Procurement directives 2004/17 and 2004/18 (works
  concession and definition of service concession)
• The case law of the European Court of Justice
  (Teleaustria, Coname, Stadt Halle, Teckal,
  Lottomatica, etc.)
• Commission Interpretative Communications (2006/C
  179/02 2000/C 121/02 2005/0569)

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ConcessionsGeneral questions

• NOT concessions in the sense of EU public
  procurement rules
• when a public authority authorises the exercice
  of an economic activity (e.g. taxi concessions)
• acts concerning non-economic activities (e.g.
  obligatory schooling)

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ConcessionsGeneral questions

• Main characteristics of concessions
• Contracting authority entrusts to a third party
• Total or partial management of services (which
  constitute economic activities)
• For which that authority would normally be
  responsible
• For which the third party assumes the
  economic/operational/financial risk
• Leaves the public authority functions/powers of
  the grantor untouched

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ConcessionsGeneral questions

• Main characteristics of concessions (which
  separate them from public contracts)
• - the right of exploitation
• - the transfer of the responsabilities of the
  operation
• - the transfer of risks inherent in the
  exploitation (who bears the costs)

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ConcessionsThe procurement directives

• Works concessions
• (Title III of 2004/18 excluded from 2004/17)
• Definition
• Scope and exclusions
• Advertising and time limits
• Subcontracting and additional works
• Rules on the award of contracts by
  concessionaires

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ConcessionsThe procurement directives

• Works concessions - Rules on the award of
  contracts by concessionaires
• Concessionaires which are contracting
  authorities
• - provisions for public work contracts
• Concessionaires which are NOT contracting
  authorities
• - advertising
• - time limits
• principles of the Treaty!

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ConcessionsThe procurement directives

• Service concessions
• Only its definition in the directives, otherwise
  its excluded from their scope
• Only principles of the Treaty apply

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ConcessionsService concessions

• ECJ in TELAUSTRIA judgment (C-324/98)
• The fundamental rules of the Treaty, in
  particular the principle of non discrimination
  apply to service concessions.
• Advertising must be sufficient to open the
  services market up to competition.
• The fundamental rules of the Treaty include
• Equality of treatment
• Transparency
• Proportionality
• Mutual Recognition

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Public Private Partnership (PPP)

• Not a legal term in the EU sense
• Describes only a specific situation when public
  authorities and private entities cooperate in
  order to meet a general interest
• In legal terms it can be a public contract or a
  concession, depending on the case
• Its specific form is the Institutionalised PPP

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Public Private Partnership (PPP)

• Public contract or concession?
• - the right of exploitation
• - the transfer of the responsabilities of the
  operation
• the transfer of risks inherent in the
  exploitation
• the sharing of costs

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Public Private Partnership (PPP)

• - PPPs qualifying as public works contracts or as
  priority service contracts application of the
  detailed provisions of the Procurement
  Directives.
• - PPPs qualifying as public works concessions or
  non-priority service contracts application of
  few provisions of the Procurement Directives.
• - PPPs qualifying as service concessions EC
  Treaty principles only.

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PPPs and concessionsCurrent issues of policy
making and new legislation

• Communication on PPPs and Community Law on public
  procurement and concessions (COM2005(569))
• Draws political conclusions from PPP Green Paper
  consultation and
• sets out the key initiatives at EC level in this
  area.

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PPPs and concessionsCurrent issues of policy
making and new legislation

• Areas where Community action not required at this
  stage
• No need for horizontal PPP legislation at EC
  level
• No immediate need for initiatives on private
  initiative PPPs, subcontracting or the
  contractual framework

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PPPs and concessionsCurrent issues of policy
making and new legislation

• Key areas requiring further consideration at EC
  level
• Concessions
• Institutionalised PPPs

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PPPs and concessionsCurrent issues of policy
making and new legislation

• Concessions
• Demand for a stable, consistent legal
  environment for the award of concessions legal
  certainty
• EU action needed to avoid patchwork of national
  rules

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PPPs and concessionsCurrent issues of policy
making and new legislation

• New directive on concessions?
• It is in the Commissions working programme
• Clear interest from the stakeholders
• The Commission services are working on it and
  have discussions on it with Member States
• It will be a part of a legislative package on
  services of general interests
• Waiting for the result of the impact assessment
• Due to the political sensitivity of it clear
  political decisions are needed from the
  Commissioner and the College

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PPPs and concessionsCurrent issues of policy
making and new legislation

• Commission Interpretative Communication
  C(2007)6661on the application of Community law on
  Public Procurement and Concessions to
  Institutionalised Public-Private Partnerships
  (IPPP)
• - Addressing the creation and operation of
  IPPPs/ in-house 
• - Political decision is necessary from the
  Commissioner and the College to go further
  through a legislative initiative on concessions
• - Key issues are
• Definition of concession
• Scope of a possible initiative on concessions
• Qualification of mixed concessions
• Thresholds and method of calculation
• Procedure to award concessions
• Selection and award criteria
• Duration of concessions
• Amendments to the concession during its lifetime
• Remedies regarding infringements to the EU rules