Several sets of Community rules have a direct or indirect impact on PPPs. Going forward, it will be important to ensure that the applicable rules are appropriate and supportive while fully respecting the principles of the Internal Market.
In the past, there was a concern that Member State governments could use PPPs as a way to conceal their expenditure and new liabilities on public balance sheets, loading up costs for the future, in contradiction with the Stability and Growth Pact rules. Similar concerns might be raised in the current context of public debts incurred due to the crisis. Eurostat developed rules on the statistical accounting of PPPs15, which clearly determine in which cases a PPP's asset(s) should be recorded on the government's balance sheet. These rules are based on the distribution of the main risks of the project between the government and the PPP operator. Where the financial risk of the project rests mainly with the government, the PPP asset(s) is recorded on the government balance sheet. Given the pressure on public finances due to the ongoing economic crisis, a smooth return to budgetary discipline would require that Member States be aware of the impact of individual projects on their balance sheets and the related consequences (debt and deficit treatment).
PPPs are structured around a public contract or as work or service concessions. When public contracts or works concessions are involved, they are subject to the provisions of the public procurement directives if their value exceeds the Community thresholds16. Following extensive modifications in 2004, EU public procurement legislation17 now provides for a range of procedures that contracting authorities can employ when awarding contracts. Notably, to enter into dialogue with tenderers in particularly complex cases, the EU rules now allow opting for competitive dialogue. Its use may be appropriate in case of PPPs where the contracting authority may not always be able to determine the technical specifications and the appropriate price level in advance.
Service concessions do not fall under the scope of public procurement directives, but the case law of the European Court of Justice has confirmed that the EC Treaty principles (such as transparency and equal treatment) also apply to service concessions18. A reflection is ongoing on the need to improve transparency, equal treatment between all economic operators, and, thus, legal certainty in the award procedures for service concessions. The Commission is preparing an impact assessment to assess which future initiatives are necessary to ensure a clear and predictable framework in this area.
Finally, it should also be recalled that PPPs, as long as they carry out an economic activity, are subject to the application of competition rules and, in particular, of State aid rules.
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15 Eurostat News Release 18/2004: Treatment of public-private partnerships and ESA95 Manual on government deficit and debt 2004 Edition: Chapter on Long term contracts between government units and non-government partners (Public-private partnerships).
16 For public contracts or works concessions below the thresholds, Treaty principles apply (transparency, equal treatment, non-discrimination).
17 Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors (OJ L 134, 30.4.2004, p. 1-113). Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts ( OJ L 134, 30.4.2004, p. 114-240).
18 Judgement of 26 April 1994, case C-272/91, Commission v. Italy (Loto); Judgement of 9 September 1999, case C-108/98, RI.SAN; Judgement of 7 December 2000, case C-324/98, Telasutria Verlags; Judgement of 21 July 2005, case C-231/03, Consorzio Aziende Metano (Coname); Judgement of 13 October 2005, case C-458/03, Parking Brixen; Judgement of 6 April 2006, case C-410/04, Associazione Nazionale Autotrasporto Viaggiatori (ANAV); Judgement of 18 July 2007, case C-382/05, Commission v. Italy (Municipal waste produced in the Region of Sicily).