Question 18 of the PPP Green Paper
Question What experience do you have of arranging institutionalised PPPs and in particular, in the light of this experience, do you think that Community law on public contracts and concessions is complied with in such cases. If not, why not ? |
Main views of stakeholders • There is no agreement on whether or not current institutionalised PPP practice in the Member States actually complies with Community law on public contracts and concessions. • Public authorities, public companies and associations of public bodies from various Member States tend to assess compliance fairly positively. • Many contributors from the private sector perceive current compliance with Community law on public contracts and concessions as deficient in certain respects, pointing to circumvention of public procurement law and distortions of competition. |
In general, the contributions reflect the divergences between the different national legal traditions and practices as regards undertakings set up jointly by public and private companies to provide infrastructure projects or to perform public services (institutionalised PPPs - IPPPs). While some Member States have had recourse to IPPPs since the beginning of the 20th century, the concept is rather new in other Member States. Depending on their national traditions, some Member States have a quite comprehensive legislative framework in place. It appears from the contributions that, in practice, important fields of application for IPPPs include the water, environment, energy and transport sectors.
There is no agreement on whether or not current IPPP practice in the Member States complies with Community law on public contracts and concessions. Public authorities, public companies and associations of public bodies from various Member States tend to assess compliance fairly positively. Conversely, many contributors from the private sector perceive current compliance with Community law on public contracts and concessions as deficient in certain respects.
The main deficiencies perceived include the circumvention of public procurement law and distortions of competition.
As regards circumvention of public procurement rules, some stakeholders contend that in certain Member States public procurement procedures aimed initially at concluding contractual PPPs finally result in the conclusion of IPPPs with actors who did not participate in the original public procurement procedure. This practice, it is argued, allows the contracting authorities to profit unduly from technical solutions identified in the original tendering procedure.
Distortion of competition is argued to arise in particular from the participation of IPPP-entities in award procedures. It is argued that the public IPPP partner has, firstly, preferential access to information relevant to the proposed project and, secondly, an advantageous cost structure - compared to all private competitors - due to its use of public goods without a payment corresponding to economic reality. In line with this complaint, one contributor reports potential conflicts of interest regarding public authorities acting at the same time both as contracting authorities and as partners of IPPPs.
Independent of their opinion on the compliance of current IPPP practice with the EC Public Procurement Directives, a substantial number of contributors deplore the lack of legal certainty at EC level regarding relations between contracting authorities and other parties which are so close that - in public procurement terms - they are not considered distinct from each other ("in-house relations").15 Some contributors perceive the lack of clarity on this issue as a source of abuse by public authorities; one contributor believes that this prevents public authorities from embarking on such arrangements at all.
Another contributor argues that the restrictive jurisprudence of the ECJ on in-house relations limited attempts by public authorities to circumvent public procurement law by this means.
Various contributors do not consider IPPPs any different from contractual PPPs from a public procurement perspective. Consequently, these contributions consider the distinction between these two models made in the PPP Green Paper to be artificial. One of these contributions concedes, however, that opening the capital of existing public companies to the private sector might pose certain problems which could justify specific measures.
There is no consensus as to whether public procurement law or other issues, for example free movement of capital, constitute the main legal problems in relation to IPPPs. Various contributors argue that the creation of mixed public private companies has nothing to do with EC public procurement law at all, because it falls within the area of administrative organisation, which is not a matter for the European Union to regulate.
__________________________________________________________________________________________
15 Case C-107/98, Teckal, Judgment of 18 November 1999, point 50. The ECJ judgment in case C-26/03, Stadt Halle, Judgment of 11 January 2005, was released after this consultation.