Case C-274/09

Privater Rettungsdienst und Krankentransport Stadler

Zweckverband für Rettungsdienst und Feuerwehralarmierung Passau

(Reference for a preliminary ruling from the Oberlandesgericht München)

(Public procurement – Directive 2004/18/EC – Public service concession – Rescue service – Distinction between ‘public service contract’ and ‘service concession’)

Summary of the Judgment

1. Approximation of laws – Procedures for the award of public works contracts, public supply contracts and public service contracts – Directive 2004/18 – Public service contract – Service concession – Distinguishing criteria

(European Parliament and Council Directive 2004/18, Art. 1(2)(a) and (d) and (4))

2. Approximation of laws – Procedures for the award of public works contracts, public supply contracts and public service contracts – Directive 2004/18 – Service concession – Concept

(Arts 49 TFEU and 56 TFEU; European Parliament and Council Directive 2004/18, Art. 1(2)(d) and (4))

1. It follows from a comparison of the definitions of a public service contract and a service concession provided, respectively, by Article 1(2)(a) and (d) and by Article 1(4) of Directive 2004/18 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts, that the difference between a public service contract and a service concession lies in the consideration for the provision of services. A service contract involves consideration which, although it is not the only consideration, is paid directly by the contracting authority to the service provider, while, for a service concession, the consideration for the provision of services consists in the right to exploit the service, either alone, or together with payment.

In the case of a contract for the supply of services, the fact that the supplier is not remunerated directly by the contracting authority, but is entitled to collect payment from third parties, meets the requirement of consideration laid down in Article 1(4) of Directive 2004/18. While the method of remuneration is, therefore, one of the determining factors for the classification of a service concession, the service concession implies that the service supplier takes the risk of operating the services in question and that the absence of a transfer to the service provider of the risk connected with operating the service shows that the transaction concerned is a public service contract and not a service concession. In order to find that there is a service concession, it is necessary to establish whether the agreed method of remuneration takes the form of the right of the service provider to exploit the service and entails it taking the risk of operating the service in question. While that risk may, at the outset, be very limited, it is necessary for classification as a service concession that the contracting authority transfer to the concession holder all or, at least, a significant share of the risk which it faces.

(see paras 24-26, 29)

2. Article 1(2)(d) and (4) of Directive 2004/18/EC on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts must be interpreted as meaning that, when the economic operator selected is fully remunerated by persons other than the contracting authority which awarded the contract concerning rescue services, when it runs an operating risk, albeit a very limited one, by reason, inter alia, of the fact that the amount of the usage fees in question depends on the result of annual negotiations with third parties, and when it is not assured full coverage of the costs incurred in managing its activities in accordance with the principles laid down by national law, that contract must be classified as a ‘service concession’ within the meaning of Article 1(4) of that directive.

The fact that the amount of the usage fees is not determined unilaterally by the provider of the rescue services, but by agreement with the social security institutions which themselves have the status of a contracting authority, and that those fees are not paid directly by the users of those services to the selected provider but through a central settlement office in charge of collecting and remitting those fees, by regular payments on account, does not affect that finding. The fact remains that all the remuneration obtained by the provider of the services comes from persons other than the contracting authority which awarded it the contract.

In that regard, while as Union law now stands, service concession contracts are not governed by any of the directives by which the Union legislature has regulated the field of public procurement, the public authorities concluding them are nevertheless bound to comply with the fundamental rules of the Treaty on the Functioning of the European Union, including Articles 49 TFEU and 56 TFEU, and with the consequent obligation of transparency, when – this being a matter for the referring court to determine – the contract concerned has a certain transnational dimension.

(see paras 28, 48-49, operative part)

JUDGMENT OF THE COURT (Third Chamber)

10 March 2011 (*)

(Public procurement – Directive 2004/18/EC – Public service concession – Rescue service – Distinction between ‘public service contract’ and ‘service concession’)

In Case C‑274/09,

REFERENCE for a preliminary ruling under Article 234 EC from the Oberlandesgericht München (Germany), made by decision of 2 July 2009, received at the Court on 20 July 2009, in the proceedings

Privater Rettungsdienst und Krankentransport Stadler

Zweckverband für Rettungsdienst und Feuerwehralarmierung Passau,

interveners:

Malteser Hilfdienst eV,

Bayerisches Rotes Kreuz,

THE COURT (Third Chamber),

composed of K. Lenaerts, President of the Chamber, D. Šváby, E. Juhász (Rapporteur), G. Arestis and T. von Danwitz, Judges,

Advocate General: J. Mazák,

Registrar: B. Fülöp, Administrator,

having regard to the written procedure and further to the hearing on 24 June 2010,

after considering the observations submitted on behalf of:

– Privater Rettungsdienst und Krankentransport Stadler, by B. Stolz and P. Kraus, Rechtsanwälte,

– the Zweckverband für Rettungsdienst und Feuerwehralarmierung Passau, by M. Kuffer and D. Bens, Rechtsanwälte,

– Malteser Hilfsdienst eV, by W. Schmitz-Rode, Rechtsanwalt,

– the Bayerisches Rotes Kreuz, by E. Rindtorff, Rechtsanwalt,

– the German Government, by M. Lumma and J. Möller, acting as Agents,

– the Czech Government, by M. Smolek, acting as Agent,

– the Swedish Government, by S. Johannesson, acting as Agent,

– the European Commission, by C. Zadra and G. Wilms, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 9 September 2010,

gives the following

Judgment

1 This reference for a preliminary ruling concerns the interpretation of Article 1(2)(a) and (d) and Article 1(4) of 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 2004 L 134, p. 114).

2 The reference has been made in proceedings between Privater Rettungsdienst und Krankentransport Stadler (‘Stadler’) and the Zweckverband für Rettungsdienst und Feuerwehralarmierung Passau (Municipal Association for the Rescue Service and Fire Alarm, Passau; ‘Passau municipal association’) regarding the award of service contracts in the field of rescue services. The parties are in dispute, in particular, concerning the classification of those contracts as ‘public service contracts’ or ‘service concessions’.

Legal context

European Union legislation

3 Article 1 of Directive 2004/18 provides:

‘…

2. (a) “Public contracts” are contracts for pecuniary interest concluded in writing between one or more economic operators and one or more contracting authorities and having as their object the execution of works, the supply of products or the provision of services within the meaning of this Directive.

…

(d) “Public service contracts” are public contracts other than public works or supply contracts having as their object the provision of services referred to in Annex II.

…

4. “Service concession” is a contract of the same type as a public service contract except for the fact that the consideration for the provision of services consists either solely in the right to exploit the service or in this right together with payment.

…’

National legislation

4 The Bavarian law on rescue services (Bayerisches Rettungsdienstgesetz; ‘the Bavarian law’) entered into force on 1 January 2009. The relevant provisions of that law for the purposes of the present case are as follows.

‘Article 1 Subject-matter and aim

This Law governs emergency rescue, transport of patients accompanied by a doctor, transport of the sick, mountain and cave rescue and water rescue (rescue service). The area-wide supply of rescue services is a public task and shall be ensured by a public rescue service …

…

Article 4 Bodies entrusted with the task

(1) Districts and municipalities not forming part of a district shall have the task of ensuring provision of the public rescue service in rescue service areas in accordance with this Law …

(2) The highest-level rescue service authority shall, after consulting the municipal umbrella organisations involved, determine by regulation the rescue service areas in such a way that the rescue service can be run in an effective and economic manner.

(3) The districts and the municipalities not forming part of a district that are within the same rescue service area shall perform their tasks under this Law in conjunction with a municipal association for the rescue service and fire alarm.

…

Article 13 Award of emergency rescue, of transport of patients accompanied by a doctor and of transport of the sick

(1) The municipal association for the rescue service and fire alarm shall entrust the carrying out on land of emergency rescue, of transport of patients accompanied by a doctor and of transport of the sick to

1. the Bayerisches Rotes Kreuz (Bavarian Red Cross)

2. the Arbeiter-Samariter-Bund (Workers’ Samaritan Federation)

3. the Malteser-Hilfsdienst (Maltese Aid Service),

4. the Johanniter-Unfall-Hilfe (St. John’s Accident Assistance) or

5. comparable aid organisations.

…

(2) In so far as the aid organisations are not prepared or in a position to take on the task, the municipal association for the rescue service and fire alarm shall entrust the carrying out of rescue services on land to third parties or shall carry them out itself or through its members.

(3) The municipal association for the rescue service and fire alarm shall make a decision in its discretion, after due assessment of the circumstances, as to the selection of the operator and as to the scope of the award. The selection decision shall be made transparently and in accordance with objective criteria. The municipal association for the rescue service and fire alarm shall publicise the forthcoming selection decision in an appropriate manner, so that interested service providers can apply.

(4) The legal relationship between the municipal association for the rescue service and fire alarm and the person entrusted with running the rescue service shall be governed by a public law contract.

…

Article 21 Requirement for authorisation

(1) Any person who engages in emergency rescue, transport of patients accompanied by a doctor or transport of the sick requires authorisation.

…

Article 24 Conditions for authorisation

…

(2) Authorisation for emergency rescue, the transport of patients accompanied by a doctor or transport of the sick in the public rescue service shall be granted if … a public law contract pursuant to Article 13(4) … is submitted …

…

(4) Authorisation for transport of the sick outside the public rescue service shall be refused if it is to be anticipated that the public interest in an efficient rescue service … will be compromised by exercise of the authorisation …

…

Article 32 Charging and basis of usage fees

Usage fees shall be charged for the provision of rescue services, including the involvement of doctors. The usage fees shall be based on the costs that can be estimated in accordance with economic principles applicable to undertakings and are consistent with proper provision of services, economical and cost-efficient management and efficient organisation …

…

Article 34 Usage fees of operators for emergency rescue, the transport of patients accompanied by a doctor and transport of the sick

…

(2) The social security institutions shall agree the usage fees to be paid by them for emergency rescue, the transport of patients accompanied by a doctor and transport of the sick in a uniform manner with the persons running the rescue service or their Land federations ...

(3) The usage fee agreement shall be concluded annually in advance.

(4) The costs of emergency rescue, of the transport of patients accompanied by a doctor and of transport of the sick shall be allocated in accordance with uniform standards to the users. The usage fees agreed with the social security institutions shall also be charged by the operators to all other persons and bodies which call upon the services of the public rescue service.

(5) The usage fees shall in each case be based on the estimated allowable costs under the second sentence of Article 32 of providing the services in the service areas of emergency rescue, transport of patients accompanied by a doctor and transport of the sick and on the estimated operation numbers in the operational period. The costs of providing the services shall also include in particular the costs of the involvement of doctors in the rescue service, … and the costs in respect of the activity of the Central Settlement Office for the Rescue Service in Bavaria in accordance with paragraph 8. The social security institutions shall agree in each case separately with the individual operators, with the operators of the integrated head offices and with the Central Settlement Office for the Rescue Service in Bavaria their estimated costs in the fee period. The costs can be agreed as a budget.

(6) If a usage fee agreement under paragraph 2 or an agreement under paragraph 5 does not materialise by 30 November in the financial year preceding the fee period, arbitration proceedings before the fee arbitration board … shall be held regarding the amount of the estimated costs and of the usage fees … Usage fees shall not be adjusted retroactively.

(7) The estimated costs agreed with the social security institutions or determined with binding force shall be met from the fees received for emergency rescue, for transport of patients accompanied by a doctor and in transporting the sick (revenue settlement). After a fee period has ended, every operator, every operator of an integrated head office and the Central Settlement Office for the Rescue Service in Bavaria shall prove the costs actually incurred in a final statement of account and compare them with those in the costs agreement (rendering of accounts). If a difference arises between the actual costs and the estimated costs recognised by the social security institutions for the costs agreement, the result of the rendering of accounts shall be dealt with at the next possible fee negotiations; this carrying forward is precluded if the costs of the operator … or the Central Settlement Office … have been agreed as a budget.

(8) In implementing paragraphs 2 to 7 and Article 35, the services of a Central Settlement Office for the Rescue Service in Bavaria shall be called upon, which shall in particular:

1. participate as an adviser in relation to agreeing the usage fees pursuant to paragraph 2 and in relation to the agreements under paragraph 5;

2. on the basis of the estimated costs of the parties involved and of the number of public rescue service operations to be anticipated, calculate the necessary usage fees and propose them for agreement to the parties involved; this shall also apply to the necessary adjustment of usage fees in the course of the current financial year;

3. collect the usage fees for the services of the public rescue service … from the persons liable to pay the costs …;

4. conduct the revenue settlement;

5. make [payments in respect of the] costs of providing the services to the operator of the service …;

6. examine the operators’ … rendering of accounts with regard to plausibility and the correctness of the calculations;

7. draw up an audited overall final statement of account for the public rescue service.

The Central Settlement Office for the Rescue Service in Bavaria shall provide its services in this regard on a non-profit-making basis. All parties involved shall be obliged to support the Central Settlement Office for the Rescue Service in Bavaria in the performance of its tasks and to give to it the information and written documentation necessary for that purpose.

…

Article 48 Arbitration boards

…

(3) The fee arbitration board shall comprise, in addition to the chairman:

1. in disputes concerning land rescue usage fees three members for the land rescue operators and three members for the social security institutions …

…

(5) The chairman of the fee arbitration board and his proxy shall be appointed jointly by the operators of the public rescue service, the Bavarian Association of Health-Insurance Doctors, the persons responsible for ensuring the presence of doctors to accompany transported patients, and the social security institutions.

Article 49 Rescue service authorities

(1) The authorities for implementing this Law … shall be:

1. the Bavarian Ministry of Internal Affairs as the highest-level rescue service authority, …

…

Article 53 Regulations and administrative provisions

(1) The highest-level rescue service authority may by regulation:

…

11. set up the Central Settlement Office for the Rescue Service in Bavaria …

…’

The dispute in the main proceedings and the questions referred for a preliminary ruling

5 Stadler provided rescue services to the Passau municipal association, in Bavaria, until 31 December 2008, when their contract with the association was terminated. It contested the validity of that termination before the Verwaltungsgericht (Administrative Court) (Germany) and applied for an interim order allowing it to implement the contract pending a ruling in the main proceedings. All its claims were dismissed.

6 In the course of those proceedings, the Passau municipal association stated that it intended, without first putting the services out to tender, to entrust other undertakings with the carrying out of rescue services, initially on the basis of temporary contracts, before then awarding the final contract in the course of a procedure based on the selection procedure provided for under Article 13(3) of the Bavarian law.

7 The Passau municipal association drew up temporary contracts with the Malteser Hilfsdienst eV and the Bayerisches Rotes Kreuz.

8 Stadler, by letter of 17 December 2008, contested the procedure conducted by the Passau municipal association and brought an action before the Vergabekammer (Public Procurement Board), which dismissed it as inadmissible.

9 Stadler then appealed against that decision to the Oberlandesgericht München (Higher Regional Court, Munich) (Germany).

10 According to the referring court, the purpose of the proceedings is to determine whether the provision of the disputed services in Bavaria must be classified as a ‘service concession’ or a ‘service contract’ and what the legal consequences of that classification are. That classification depends on the interpretation of Article 1(4) of Directive 2004/18 which defines the concept of ‘service concession’.

11 In Passau, contracts concerning the provision of rescue services to the public are concluded according to a so-called ‘concession model’ between a contracting authority, the Passau municipal authority, and a service provider.

12 The amount of the usage fees for those rescue services is agreed between the social security institution and the selected service provider. According to Article 32, second sentence, of the Bavarian law, the usage fees must be calculated on the basis of the costs that can be estimated in accordance with economic principles applicable to undertakings and are consistent with proper provision of services, economical and cost-efficient management and efficient organisation. The estimated costs agreed are met by the fees received for emergency rescue, for transport of patients accompanied by a doctor and for transporting the sick. Where the social security institution and the service provider differ as to the amount of those fees, the matter may be brought before an arbitration board, the decisions of which can be contested before the administrative courts.

13 The service provider selected receives his fees from a central settlement office set up by the Bavarian Minister for Internal Affairs, the services of which it is legally bound to use. That office transfers payments on account, on a weekly or monthly basis, to that service provider on the basis of an overall annual amount of remuneration calculated in advance independently of the number of rescues actually carried out. If a deficit appears at the end of the year, it will be the subject of subsequent negotiations.

14 Privately-insured and uninsured persons who, according to the referring court, represent 10% of debtors, are obliged to pay the same usage fee as persons insured under the compulsory statutory scheme.

15 The referring court notes that, in Germany, there is an alternative method of rescue service provision, known as the ‘tender model’. In certain Länder, including Saxony, the contracting authority responsible for rescue services pays the service providers directly. The public bodies responsible for rescue services agree that remuneration in negotiations with the social security institutions and then pay it to the service providers. That model has already been classified by the Bundesgerichtshof (German Federal Court of Justice) as a ‘service contract’.

16 The differences between the ‘tender model’ of Länder such as Saxony and the ‘concession model’ of Länder such as Bavaria are that, in the first case, the usage fees provided for by law are negotiated between the contracting authority responsible for rescue services and another contracting authority (the social security institution) and that the service provider is bound by that agreement, whereas, in the second case, the service provider agrees the amount of the usage fee with another contracting authority (the social security institution).

17 Therefore, for the referring court, the question arises whether simply choosing another negotiating method can mean that, in one case, the rescue service must be put out to tender as a ‘service contract’ pursuant to Directive 2004/18 and, in the other case, the application of the rules governing the award of public service contracts could be ruled out on the ground that the contract constitutes a ‘service concession’.

18 In addition, the referring court is of the opinion that it can be inferred from the case-law of the Court of Justice that characterisation as a public service concession requires, where the remuneration is paid by a third party, that the contractor take the risk of operating the services in question. Thus, if the criterion for differentiating between a ‘service concession’ and a ‘service contract’ that is actually decisive is considered to be the assumption of the economic risk by the contractor, the question arises as to whether the assumption of a risk in any form suffices, so long as the entire risk otherwise falling on the contracting authority is assumed.

19 That distinction is all the more fine because, as the referring court emphasises, under the ‘concession’ model the service provider has to bear only a limited economic risk.

20 In those circumstances, the Oberlandesgericht München decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘(1) Is a contract relating to the supply of services (here, rescue services) under the terms of which the contracting authority does not make a direct payment of consideration to the contractor, but:

(a) the usage fee for the services to be provided is set by negotiation between the contractor and third parties who are contracting authorities (here, social security institutions),

(b) if agreement is not reached provision is made for a decision by an arbitration board established to this end, whose decision is subject to review by State courts, and,

(c) the fee is paid to the contractor not directly by the users, but in regular payments on account by a central settlement office whose services the contractor is statutorily required to call upon,

to be regarded for that reason alone as a service concession within the meaning of Article 1(4) of the Directive as distinct from a service contract for the purposes of Article 1(2)(a) and (d) of the Directive?

(2) If the first question referred is to be answered in the negative, is there a service concession where the operating risk connected with the public services is limited because:

(a) under a statutory provision, the usage fees for the provision of the services are to be based on the costs that can be estimated in accordance with economic principles applicable to undertakings and that are consistent with proper provision of services, economical and cost-efficient management and efficient organisation,

(b) the usage fees are due from solvent social security institutions,

but the contractor assumes this limited risk entirely?’

The questions referred for a preliminary ruling

21 As the two questions posed by the referring court are connected, it is appropriate to examine them together.

22 As a preliminary point, it must be noted that contracts concerning the provision of rescue services to the public, awarded by the Passau municipal association, are concluded in the form of the so-called ‘concession model’. That procurement model can be distinguished from the ‘tender’ model, which is a method of awarding a public service contract (see, to that effect, Case C-160/08 Commission v Germany [2010] ECR I-0000, paragraph 131), by the fact that, under the concession model, remuneration does not come from the contracting authority but from the sums collected from the users of the service by a central settlement office. The usage fees applicable to the service are agreed between the social security institution and the service provider selected by the Passau municipal authority.

23 In that regard, it must be recalled at the outset that the question whether an operation is to be classified as a ‘service concession’ or a ‘public service contract’ must be considered exclusively in the light of European Union law (see, inter alia, Case C‑382/05 Commission v Italy [2007] ECR I‑6657, paragraph 31, and Case C-196/08 Acoset [2009] ECR I‑9913, paragraph 38).

24 It follows from a comparison of the definitions of a public service contract and a service concession provided, respectively, by Article 1(2)(a) and (d) and by Article 1(4) of Directive 2004/18, that the difference between a public service contract and a service concession lies in the consideration for the provision of services. A service contract involves consideration which, although it is not the only consideration, is paid directly by the contracting authority to the service provider (see, to that effect, Case C-458/03 Parking Brixen [2005] ECR I-8585, paragraph 39, and Commission v Italy, paragraphs 33 and 40), while, for a service concession, the consideration for the provision of services consists in the right to exploit the service, either alone, or together with payment (see, to that effect, Case C-206/08 Eurawasser [2009] ECR I-8377, paragraph 51).

25 In the case of a contract for the supply of services, the fact that the supplier is not remunerated directly by the contracting authority, but is entitled to collect payment from third parties, meets the requirement of consideration laid down in Article 1(4) of Directive 2004/18 (see Eurawasser, paragraph 57).

26 While the method of remuneration is, therefore, one of the determining factors for the classification of a service concession, it also follows from the case-law that the service concession implies that the service supplier takes the risk of operating the services in question and that the absence of a transfer to the service provider of the risk connected with operating the service shows that the transaction concerned is a public service contract and not a service concession (Eurawasser, paragraphs 59 and 68, and the case-law cited).

27 In the main proceedings, it is apparent from the order for reference that the provider of the rescue services also does not receive remuneration from the contracting authority which awarded the contract in question but from the usage fees which it is entitled to obtain, under the Bavarian law, from the social security institutions from which the insured persons received rescue services or even from the privately-insured or non-insured persons who received such services.

28 The fact that the amount of the usage fees is not determined unilaterally by the provider of the rescue services, but by agreement with the social security institutions which themselves have the status of a contracting authority (see, to that effect, Case C-300/07 Hans & Christophorus Oymanns [2009] ECR I-4779, paragraphs 40 to 59), and that those fees are not paid directly by the users of those services to the selected provider but through a central settlement office which is in charge of collecting and remitting those fees, by regular payments on account, does not affect that finding. The fact remains that all the remuneration obtained by the provider of the services comes from persons other than the contracting authority which awarded it the contract.

29 In a case such as that in the main proceedings, in order to find that there is a service concession within the meaning of Article 1(4) of Directive 2004/18, it is still necessary to establish whether the agreed method of remuneration takes the form of the right of the service provider to exploit the service and entails that it takes the risk of operating the service in question. While that risk may, at the outset, be very limited, it is necessary for classification as a service concession that the contracting authority transfer to the concession holder all or, at least, a significant share of the risk which it faces (see, to that effect, Eurawasser, paragraphs 77 and 80).

30 In the main proceedings, the Passau municipal authority conferred on the selected providers, over a number of years, the complete technical, administrative and financial implementation of the rescue services, for which it was responsible, in accordance with Article 4(1) of the Bavarian law.

31 The service providers selected are thus responsible for carrying out the rescue service, in accordance with the conditions laid down in the contract and in the Bavarian law, in the administrative district of Passau municipal authority.

32 Stadler contests the claim that, by that transaction, the Passau municipal authority also transferred a risk of operating the services in question to the selected service providers.

33 In that regard, it must be noted that, where the remuneration of the provider comes exclusively from a third party, the transfer by the contracting authority of a ‘very limited’ operating risk will suffice in order for a service concession to be found (see Eurawasser, paragraph 77).

34 It is not unusual that certain sectors of activity, in particular sectors involving public service utilities, such as those at issue in the main proceedings, are subject to rules which may have the effect of limiting the financial risks entailed. It must in particular remain open to the contracting authorities, acting in all good faith, to ensure the supply of services by way of a concession, if they consider that to be the best method of ensuring the public service in question, even if the risk linked to such an operation is very limited (Eurawasser, paragraphs 72 and 74).

35 In such sectors, the contracting authority has no influence on the detailed rules of public law governing the service, and thus on the level of the risk to transfer, and it would not, moreover, be reasonable to expect a public authority granting a concession to create conditions which were more competitive and involved greater financial risk than those which, on account of the rules governing the sector in question, exist in that sector (see Eurawasser, paragraphs 75 and 76).

36 It must also be stated that it is not for the Court of Justice to classify specifically the transactions at issue in the main proceedings. The Court’s role is confined to providing the national court with an interpretation of European Union law which will be useful for the decision which it has to take in the dispute before it (see Parking Brixen, paragraph 32). The specific classification of the contract falls within the jurisdiction of the national court which must determine whether the established facts satisfy the general criteria laid down by the Court.

37 In that regard, it must be stated that the risk of the economic operation of the service must be understood as the risk of exposure to the vagaries of the market (see, to that effect, Eurawasser, paragraphs 66 and 67), which may consist in the risk of competition from other operators, the risk that supply of the services will not match demand, the risk that those liable will be unable to pay for the services provided, the risk that the costs of operating the services will not fully be met by revenue or for example also the risk of liability for harm or damage resulting from an inadequacy of the service (see, to that effect, Case C-234/03 Contse and Others [2005] ECR I‑9315, paragraph 22, and Hans & Christophorus Oymanns, paragraph 74).

38 By contrast, risks such as those linked to bad management or errors of judgment by the economic operator are not decisive for the purposes of classification as a public service contract or a service concession, since those risks are inherent in every contract, whether it be a public service contract or a service concession.

39 In the case in the main proceedings, it must be observed, first, that the usage fees are not determined unilaterally by the provider of the rescue services but by agreement with the social security institutions on the basis of negotiations which must take place annually. Those negotiations, the results of which cannot fully be foreseen, involve the risk that the provider of the services must face constraints imposed throughout the duration of the contract. Those constraints may result inter alia from the need to make compromises during the negotiations or from the arbitration proceedings regarding the level of the usage fees.

40 Considering that – as stated by the referring court itself – the social security institutions with which the service provider is obliged to hold negotiations attach importance, with regard to their legal obligations, to fixing the usage fees at the lowest possible level, that service provider also runs the risk that those fees will not suffice to cover all operating expenses.

41 The service provider cannot guard against such eventualities by ceasing its activity since, first, it would not recoup the investments made by it and, second, it may face legal consequences as a result of its decision to terminate the contract early. In any case, an undertaking specialising in rescue services has only limited flexibility on the transport market.

42 Second, it is apparent from the Bavarian law that it does not guarantee full coverage of the operator’s costs.

43 If the operator’s actual costs exceed, in a given period, the estimated costs which serve as a basis for calculation of the usage fees, that operator may face a deficit and would have to ensure pre-financing of those costs from its own resources. It is a fact that the demand for rescue services can fluctuate.

44 In addition, if a difference arises between the actual costs and the estimated costs recognised by the social security institutions, the result of the rendering of accounts will be dealt with only at the next negotiations, which does not oblige the social security institutions to make good a possible deficit in the course of the following year and thus does not offer a guarantee of full compensation.

45 It should be added that if the costs are provided for in a budget, it is not possible for the undertaking to carry forward a surplus or deficit to the next financial year.

46 Third, the service provider selected is exposed, to a certain degree, to the risk of default by those liable for the usage fees. While a large majority of users of the services are insured by social security institutions, a not insignificant number of users is not insured or is privately insured. While the central settlement office is responsible for the technical recovery of their debts, it is not liable for the debts of non-insured or privately-insured persons and does not guarantee actual payment by those persons of usage fees. According to information provided to the Court, that central office does not enjoy the powers of a public authority.

47 Finally, it must be noted that, according to the statements of the referring court, the Bavarian law does not exclude the possibility that several operators may provide their services in the same area. Thus, in the main proceedings, Passau municipal authority concluded contracts with two service providers.

48 The answer to the questions posed must therefore be that, where the economic operator selected is fully remunerated by persons other than the contracting authority which awarded the contract concerning rescue services, where it runs an operating risk, albeit a very limited one, by reason inter alia of the fact that the amount of the usage fees in question depends on the result of annual negotiations with third parties, and where it is not assured full coverage of the costs incurred in managing its activities in compliance with the principles laid down by national law, that contract must be classified as a ‘service concession’ within the meaning of Article 1(4) of Directive 2004/18.

49 It should be added that while, as European Union law now stands, service concession contracts are not governed by any of the directives by which the European Union legislature has regulated the field of public procurement, the public authorities concluding them are bound to comply with the fundamental rules of the Treaty on the Functioning of the European Union, including Articles 49 TFEU and 56 TFEU, and with the consequent obligation of transparency, where – that being a matter for the referring court to determine – the contract concerned has a certain transnational dimension (see, to that effect, Case C-91/08 Wall [2010] ECR I-0000, paragraphs 33 and 34, and case-law cited).

Costs

50 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (Third Chamber) hereby rules:

Article 1(2)(d) and (4) of 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 must be interpreted as meaning that, where the economic operator selected is fully remunerated by persons other than the contracting authority which awarded the contract concerning rescue services, where it runs an operating risk, albeit a very limited one, by reason inter alia of the fact that the amount of the usage fees in question depends on the result of annual negotiations with third parties, and where it is not assured full coverage of the costs incurred in managing its activities in compliance with the principles laid down by national law, that contract must be classified as a ‘service concession’ within the meaning of Article 1(4) of that directive.

[Signatures]

* Language of the case: German.