44. The contractual provisions governing the phase of implementation of the PPPs are primarily those of national law. However, contractual clauses must also comply with the relevant Community rules, and in particular the principles of equality of treatment and transparency. This implies in particular that the descriptive documents must formulate clearly the conditions and terms for performance of the contract so that the various candidates for the partnership can interpret them in the same manner and take them into account when preparing their tenders. In addition, these terms and conditions of performance must not have any direct or indirect discriminatory impact or serve as an unjustifiable barrier to the freedom to provide services or freedom of establishment.39
45. The success of a PPP depends to a large extent on a comprehensive contractual framework for the project, and on the optimum definition of the elements which will govern its implementation. In this context, the appropriate assessment and optimum distribution of the risks between the public and the private sectors, according to their respective ability to assume these risks, is crucial. Also important are mechanisms to evaluate the performance of the titular holder of the PPP on a regular basis. In this context, the principle of transparency requires that the elements employed to assess and distribute the risks, and to evaluate the performance, be communicated in the descriptive documents, so that tenderers can take them into account when preparing their tenders.
46. In addition, the period during which the private partner will undertake the performance of a work or a service must be fixed in terms of the need to guarantee the economic and financial stability of a project. In particular, the duration of the partner relationship must be set so that it does not limit open competition beyond what is required to ensure that the investment is paid off and there is a reasonable return on invested capital. An excessive duration is likely to be censured on the basis of the principles governing the internal market40 or the provisions of the Treaty governing competition.41 Similarly, the principle of transparency requires that the elements employed to establish the duration be communicated in the descriptive documents so that tenderers can take them into account when preparing their tenders.
47. Since they concern a service spread out in time, PPP relationships must be able to evolve in line with changes in the macro-economic or technological environment, and in line with general interest requirements. In general, Community public contract law does not reject such a possibility, as long as this is done in compliance with the principles of equality of treatment and transparency. Thus, the descriptive documents transmitted to the tenderers or candidates during the selection procedure may provide for automatic adjustment clauses, such as price-indexing clauses, or stipulate the circumstances under which the rates charged may be revised. They can also stipulate review clauses on condition that these identify precisely the circumstances and conditions under which adjustments could be made to the contractual relationship. However, such clauses must always be sufficiently clear to allow the economic operators to interpret them in the same manner during the partner-selection phase.
48. In certain projects, the financial institutions reserve the right to replace the project manager, or to appoint a new manager, if the financial flows generated by the project fall below a certain level. The implementation of such clauses, which fall within the category of so-called "step-in" clauses, may result in changing the private partner of the contracting body without a call for competition. Consequently, to guarantee the compatibility of such projects with Community law on public contracts and concessions, special attention must be paid to this aspect.
49. In general, changes made in the course of the execution of a PPP, if not covered in the contract documents, usually have the effect of calling into question the principle of equality of treatment of economic operators.42 Such unregulated modifications are therefore acceptable only if they are made necessary by an unforeseen circumstance, or if they are justified on grounds of public policy, public security or public health.43 In addition, any substantial modification relating to the actual subject-matter of the contract must be considered equivalent to the conclusion of a new contract, requiring a new competition.44
50. Lastly, it should be pointed out that secondary legislation lays down the exceptional situations in which additional works or services not included in the project initially considered or in the initial contract may be awarded directly, without a call for competition.45 The interpretation of these exceptions must be restrictive. For example, they do not refer to the extension of the period of an already existing motorway concession, in order to cover the cost of works to complete a new section. Thus, the practice of combining "profitable" and "non-profitable" activities awarded to a single concessionaire must not lead to a situation where a new activity is awarded to an existing concessionaire without competition.
| 10. In contractual PPPs, what is your experience of the phase which follows the selection of the private partner? 11. Are you aware of cases in which the conditions of execution - including the clauses on adjustments over time - may have had a discriminatory effect or may have represented an unjustified barrier to the freedom to provide services or freedom of establishment? If so, can you describe the type of problems encountered? 12. Are you aware of any practices or mechanisms for evaluating tenders which have a discriminatory effect? 13. Do you share the Commission's view that certain "step-in" type arrangements may present a problem in terms of transparency and equality of treatment.? Do you know of other "standard clauses" which are likely to present similar problems? 14. Do you think there is a need to clarify certain aspects of the contractual framework of PPPs at Community level? If so, which aspects should be clarified? |
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39. Case C-19/00, SIAC Constructions, Judgment of 18 October 2001, points 41-45; Case C-31/87, Gebroeders Beentjes v. Pays-Bas, Judgment of 20 September 1988, points 29-37. See also Article 26 of Directive 2000/18/EC and Article 38 of Directive 2000/17/EC.
40. See Interpretative Communication on concessions, in particular point 3.1.3.
41. Articles 81, 82 and 86 (2) of the EC Treaty.
42. See Case C-337/98, Commission v. France, Judgment of 5 October 2000, points 44 ff. Community law also rejects any changes made during the phase of drawing up the contract, after the final selection of the successful tenderer. In this respect the new provisions governing competitive dialogue stipulate that the successful tenderer may only "clarify aspects of the tender or confirm commitments contained in the tender, provided this does not have the effect of modifying substantial aspects of the tender or of the call for tender or does not risk distorting competition or causing discrimination".
43. Articles 46 of the EC Treaty.
44. Case C-337/98, Commission v. France, Judgment of 5 October 2000, points 44 ff. The Interpretative Communication on concessions states in this context that the extension of an existing concession beyond the period originally laid down must be considered equivalent to granting a new concession to the same concessionaire.
45. See Article 11 (3)(e) of Directive 92/50/EEC, Article 7 (3)(d) of Directive 93/37/EEC and Article 20 (2)(f) of Directive 93/38/EEC. The new Directive 2004/18/EC provides for a similar exception for works concessions, see Article 61.