Keywords
Summary

Keywords

1. Freedom of movement for persons – Freedom of establishment – Freedom to provide services – Concession to operate a public service – Equal treatment – Obligation of transparency – Substantial amendment to a concession contract during its currency

(Arts 43 EC and 49 EC)

2. Freedom of movement for persons – Freedom of establishment – Freedom to provide services – Concession to operate a public service – Equal treatment – Obligation of transparency – Personal scope

(Arts 43 EC and 49 EC)

3. Freedom of movement for persons – Freedom of establishment – Freedom to provide services – Concession to operate a public service – Equal treatment – Obligation of transparency – Direct effect – Effective judicial protection of individual rights derived from the obligation of transparency – Application of national procedural rules

(Arts 43 EC and 49 EC)

Summary

1. Where amendments to the provisions of a service concession contract are materially different in character from those on the basis of which the original concession contract was awarded, and are therefore such as to demonstrate the intention of the parties to renegotiate the essential terms of the contract, all necessary measures must be taken, in accordance with the national legal system of the Member State concerned, to restore the transparency of the procedure, which may extend to a new award procedure. If need be, a new award procedure should be organised in a manner appropriate to the specific features of the service concession involved, and should ensure that an undertaking located in another Member State has access to sufficient information on that concession before it is awarded.

As European Union law now stands, service concession contracts are not governed by any of the directives by which the legislature has regulated the field of public procurement. However, the public authorities concluding them are bound to comply with the fundamental rules of the EC Treaty, including Articles 43 EC and 49 EC, and with the consequent obligation of transparency. That obligation of transparency applies where the service concession in question may be of interest to an undertaking located in a Member State other that in which the concession is awarded.

An amendment to a service concession contract during its currency may be regarded as substantial if it introduces conditions which, if they had been part of the original award procedure, would have allowed for the admission of tenderers other than those originally admitted or would have allowed for the acceptance of an offer other than that originally accepted. A change of subcontractor, even if the possibility of a change is provided for in the contract, may in exceptional cases constitute such an amendment to one of the essential provisions of a concession contract where the use of one subcontractor rather than another was, in view of the particular characteristics of the services concerned, a decisive factor in concluding the contract, which is in any event for the referring court to ascertain.

(see paras 33-34, 38-39, 43, operative part 1)

2. Where an undertaking which is the holder of a concession concludes a contract for services within the scope of a concession it has been awarded by a regional or local authority, the obligation of transparency deriving from Articles 43 EC and 49 EC and from the principles of equal treatment and non-discrimination on grounds of nationality does not apply if that undertaking:

– was set up by the regional or local authority for the purpose of waste disposal and street cleaning but also operates in the market,

– belongs to that regional or local authority to the extent of a 51% holding, but decisions of shareholders can be taken only by a three‑quarters majority of votes at a general meeting of the company,

– has only a quarter of the members of its supervisory board, including the chairman, appointed by the regional or local authority, and

– obtains more than half its turnover from bilateral contracts for waste disposal and street cleaning in the territory of that regional or local authority, which reimburses itself by means of municipal taxes on its residents.

To establish whether a company with mixed public and private capital may be equated to a public authority bound by the obligation of transparency, some aspects of the definition of ‘contracting authority’ in Article 1(b) of Directive 92/50 on public service contracts should be taken as guidance, to the extent that they correspond to the requirements produced by the application to service concessions of the obligation of transparency flowing from Articles 43 EC and 49 EC. Those articles and the principles of equal treatment and non-discrimination on grounds of nationality, and the consequent obligation of transparency, pursue the same objectives as Directive 92/50, in particular the free movement of services and their opening up to undistorted competition in the Member States. It must accordingly be ascertained whether two conditions are satisfied: first, that the undertaking in question is effectively controlled by the State or another public authority, and, second, that it does not compete in the market.

(see paras 47-49, 60, operative part 2)

3. The principles of equal treatment and non-discrimination on grounds of nationality enshrined in Articles 43 EC and 49 EC and the consequent obligation of transparency do not require the national authorities to terminate a contract or the national courts to make a restraining order in every case of an alleged breach of that obligation in connection with the award of service concessions. It is for the domestic legal system to regulate the legal procedures for safeguarding the rights which individuals derive from that obligation in such a way that those procedures are no less favourable that similar domestic procedures and do not make the exercise of those rights practically impossible or excessively difficult.

The obligation of transparency flows directly from Articles 43 EC and 49 EC, which have direct effect in the domestic legal systems of the Member States and take precedence over any contrary provision of national law. It is for the national court to interpret the national law which it has to apply, as far as is at all possible, in a manner which accords with the requirements of European Union law and, in particular, ensures that the obligation of transparency is observed.

(see paras 70-71, operative part 3)