The reported misunderstandings regarding the scope and content of Community law obligations for contracting authorities who award concessions confirm the view of stakeholders that the general EC Treaty principles, even clarified by an interpretative document from the Commission, do not provide enough legal certainty. They are considered to leave too much discretion to contracting authorities and cannot therefore guarantee equal treatment of European companies throughout the EU. Indeed, both legal practice and doctrine show that - in spite of clarification provided by the European Court of Justice12 - the requirements of the EC Treaty are understood in different ways. It was reported that this created particular difficulties for bidders bringing a case against the award of concessions for review by national courts. Clearly, this situation could discourage firms from bidding for concessions and might diminish competition for PPPs and ultimately jeopardise their success.
On a more general note, it is difficult to understand why service concessions which are often used for complex and high value projects are entirely excluded from EC secondary legislation. Some arguments explaining this lack of detailed award procedures at EC level have been submitted in the course of the PPP Green Paper consultation. They include the flexibility supposedly needed in the area of concessions and the subsidiarity principle. These arguments against a binding Community initiative in this area are, however, unconvincing: adopting Community legislation on the award of concessions does not imply that public authorities should lack flexibility when choosing a private partner for PPPs. A legislative initiative on the award of concessions needs to take the possible complexity of concessions and the need for negotiations between the contracting authority and the bidders into account. Against this background, it is difficult to see why spelling out the rules applicable to the award of concessions would per se unduly limit the flexibility of contracting authorities when awarding service concessions. Likewise, the precise content of such initiative should determine whether or not it is compliant or non-compliant with the subsidiarity principle. There is no reason to consider such an initiative per se as being non-compliant with this principle.
Having carefully considered all arguments and the factual information submitted in the course of the PPP Green Paper consultation, it would currently appear that a legislative initiative is the preferable option as regards concessions. However, as mentioned above, before formally proposing legislation further in-depth analysis will need to be undertaken in accordance with the principles of "Better Regulation", in order (1) to determine whether indeed a Community initiative to regulate procedures for awarding concessions is necessary, (2) if so, to shape such an initiative, and (3) to better understand its possible impact.
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12 Case C-324/98 Telaustria [2000] ECR I-10475, Case C-231/03 Coname [2005] not yet published in the ECR.