1 the current situation regarding ppps and concessions in the eu olivier moreau european commission,...

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The Current Situation Regarding PPPs and Concessions in the EU

Olivier MoreauEuropean Commission, DG MARKT.C1

http://europa.eu.int/comm/internal_market/publicprocurement

« Concessions and Public-Private Partnerships »Ankara, 10-11 March 2008

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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 Commission’s 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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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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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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Works concessions - Rules on the award of contracts by concessionaires

1. Concessionaires which are contracting authorities:

- provisions for public work contracts

2. Concessionaires which are NOT contracting authorities:

- advertising

- time limits

+ principles of the Treaty!

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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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and new legislation

Areas where Community action not required at this stage

1. No need for horizontal PPP legislation at EC level

2. No immediate need for initiatives on private initiative PPPs, subcontracting or the contractual framework

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and new legislation

Key areas requiring further consideration at EC level

1. Concessions

2. Institutionalised PPPs

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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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and new legislation

New directive on concessions?- It is in the Commission’s 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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and new legislationCommission 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:

1. Definition of concession2. Scope of a possible initiative on concessions3. Qualification of mixed concessions4. Thresholds and method of calculation5. Procedure to award concessions6. Selection and award criteria7. Duration of concessions8. Amendments to the concession during its lifetime9. Remedies regarding infringements to the EU rules

1 the current situation regarding ppps and concessions in the eu olivier moreau european commission,...

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