1.

By two decisions of 6 April 2017, the Consiglio di Stato (Council of State, Italy) referred to the Court two requests for preliminary rulings on the interpretation of Article 5(2) and Article 8(3) of Regulation (EC) No 1370/2007 of the European Parliament and of the Council of 23 October 2007 on public passenger transport services by rail and by road and repealing Council Regulations (EEC) Nos 1191/69 and 1107/70. ( 2 )

2.

Those requests were made, first, in a dispute between Mobit Soc. cons. arl, a consortium of several Italian undertakings operating in the transport sector, and the Regione Toscana (Region of Tuscany, Italy), concerning the definitive award of a public service contract to Autolinee Toscane SpA — an undertaking controlled by the Régie autonome des transports parisiens (RATP) — for the provision of local transport and, secondly, in a dispute between Autolinee Toscane and Mobit arising in connection with the same facts.

3.

By those questions, the referring court seeks, in essence, to ascertain whether Articles 5 and 8 of Regulation No 1370/2007 must be interpreted as meaning that an operator, such as Autolinee Toscane in the main proceedings, must be excluded from a competitive tendering procedure on the ground that that operator is controlled by another operator, namely RATP in the present dispute, to which a contract was directly awarded before the entry into force of that regulation. ( 3 )

4.

For the reasons set out below, I consider that no provision of Regulation No 1370/2007 precludes, in the circumstances of the main proceedings, a public service transport contract from being awarded to an operator such as Autolinee Toscane on the basis of a competitive tendering procedure.

5.

According to the first subparagraph of Article 1(1) thereof, the purpose of Regulation No 1370/2007 is to define how, in accordance with the rules of EU law, competent authorities may act in the field of public passenger transport to guarantee the provision of services of general interest which are among other things more numerous, safer, of a higher quality or provided at lower cost than those that market forces alone would have allowed.

6.

Article 2 of that regulation establishes, inter alia, the following definitions:

‘…

…

…

…’

7.

According to Article 3(1) of Regulation No 1370/2007, ‘where a competent authority decides to grant the operator of its choice an exclusive right and/or compensation, of whatever nature, in return for the discharge of public service obligations, it shall do so within the framework of a public service contract’.

8.

Article 5 of Regulation No 1370/2007, entitled ‘Award of public service contracts’, provides:

‘1.   Public service contracts shall be awarded in accordance with the rules laid down in this Regulation. …

2.   Unless prohibited by national law, any competent local authority, whether or not it is an individual authority or a group of authorities providing integrated public passenger transport services, may decide to provide public passenger transport services itself or to award public service contracts directly to a legally distinct entity over which the competent local authority, or in the case of a group of authorities at least one competent local authority, exercises control similar to that exercised over its own departments. Where a competent local authority takes such a decision, the following shall apply:

…

3.   Any competent authority which has recourse to a third party other than an internal operator, shall award public service contracts on the basis of a competitive tendering procedure, except in the cases specified in paragraphs 4, 5 and 6. The procedure adopted for competitive tendering shall be open to all operators, shall be fair and shall observe the principles of transparency and non-discrimination. Following the submission of tenders and any preselection, the procedure may involve negotiations in accordance with these principles in order to determine how best to meet specific or complex requirements.

…’

9.

Article 8 of Regulation No 1370/2007, entitled ‘Transition’, provides:

‘1.   Public service contracts shall be awarded in accordance with the rules laid down in this Regulation. …

2.   Without prejudice to paragraph 3, the award of public service contracts [for transport] by rail and by road shall comply with Article 5 as from 3 December 2019. During this transitional period Member States shall take measures to gradually comply with Article 5 in order to avoid serious structural problems in particular relating to transport capacity.

Within six months after the first half of the transitional period, Member States shall provide the Commission with a progress report, highlighting the implementation of any gradual award of public service contracts in line with Article 5. On the basis of the Member States’ progress reports, the Commission may propose appropriate measures addressed to Member States.

3.   In the application of paragraph 2, no account shall be taken of public service contracts awarded in accordance with Community and national law:

The contracts referred to in (a) may continue until they expire. The contracts referred to in (b) and (c) may continue until they expire, but for no longer than 30 years. The contracts referred to in (d) may continue until they expire, provided they are of limited duration comparable to the durations specified in Article 4.

Public service contracts may continue until they expire where their termination would entail undue legal or economic consequences and provided that the Commission has given its approval.

…’

10.

The referring court has stated that, in addition to the provisions of Regulation No 1370/2007, the rules derived from decreto-legislativo n. 422 del 19 novembre 1997, conferimento alle regioni ed agli enti locali di funzioni e compiti in materia di trasporto pubblico locale, a norma dell’articolo 4, comma 4, della legge 15 marzo 1997 (Legislative Decree No 422 of 19 November 1997 on the transfer to the regions and local bodies of functions and tasks concerning local public transport, in accordance with Article 4(4) of Law No 59 of 15 March 1997) (‘the Legislative Decree of 19 November 1997’) are relevant to the resolution of the disputes in the main proceedings.

11.

Article 18 of the Legislative Decree of 19 November 1997, entitled ‘Organisation of regional and local public transport services’ provides:

‘…

(2)   With the aim of providing incentives to end monopolies and of establishing rules on the functioning of competition in the management of local and regional transport services, the regions and local authorities shall, for the purposes of an award of services, comply with the principles of Article 2 of Law No 481 of 14 November 1995 and ensure in particular:

12.

Mobit is an Italian group of companies (‘società consortile’) consisting of several undertakings in the transport sector.

13.

Autolinee Toscane is an Italian company controlled by RATP through the companies RATP DEV SA and RATP DEV Italia Srl. According to the information provided by the referring court, RATP is a public institution established and controlled by the French State, which has awarded RATP public service transport contracts since 1948. The contract awarded to RATP in France, in force at the material time, expires on 31 December 2039.

14.

By notice published in the Official Journal of the European Union on 5 October 2013, the Regione Toscana initiated a procedure for the award of the concession for local public transport services within its territory.

15.

The Regione Toscana sent invitations to tender to the only two entities which had expressed an interest in participating in the procedure, namely Mobit and Autolinee Toscane.

16.

On 24 November 2015, the contract was provisionally awarded to Autolinee Toscane. It was definitively awarded to Autolinee Toscane by decision of 2 March 2016.

17.

On 15 April 2016, Mobit challenged that definitive award decision before the Tribunale amministrativo della Toscana (Administrative Court of Tuscany, Italy). By its action, Mobit challenged the lawfulness of the procedure, relying on pleas in law alleging that it was unlawful for Autolinee Toscane to participate in the tendering procedure and that there were flaws in the successful tender, or, in the alternative, that the entire procedure was unlawful.

18.

Autolinee Toscane lodged a counterclaim, seeking exclusion of the tender submitted by Mobit. RATP intervened in the proceedings in support of Autolinee Toscane.

19.

By judgment of 28 October 2016, the Tribunale amministrativo della Toscana (Administrative Court of Tuscany) upheld both Mobit’s main action and Autolinee Toscane’s counterclaim. That Court annulled the contested acts and measures as from the award decision in favour of Autolinee Toscane, whose tender was held not to fulfil the requirements laid down in the rules governing the invitation to tender. That court also excluded Mobit’s tender, which therefore could not take the place of Autolinee Toscane’s tender in the award procedure.

20.

Mobit appealed against that judgment to the referring court, alleging, in particular, infringement of Article 2(b) and (j), Article 5(2) and Article 8(3) of Regulation No 1370/2007.

21.

In particular, Mobit argued that Autolinee Toscane ought to have been excluded from the award procedure pursuant to Article 5(2)(b) and (d) of Regulation No 1370/2007, since it is controlled by an undertaking — RATP — which has been directly awarded a contract in France and should be classified as an internal operator within the meaning of the abovementioned provisions.

22.

According to the referring court, if that regulation is to be interpreted as requiring, in the context of a competitive tendering procedure, the exclusion of undertakings which have been directly awarded a contract, the referring court is required to reverse the judgment at first instance and to rule that Autolinee Toscane could not be awarded the contract.

23.

Accordingly, the Consiglio di Stato (Council of State) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:

24.

The requests for a preliminary ruling were lodged at the Court Registry on 12 June 2017.

25.

Written observations were submitted by Mobit, Autolinee Toscane, the Regione Toscana, RATP, the French and Portuguese Governments and the European Commission.

26.

Mobit, Autolinee Toscane, the Regione Toscana, RATP, the Italian and French Governments and the Commission attended the hearing of 21 June 2018 in order to present oral argument.

27.

The referring court raised four questions concerning the interpretation of Article 5(2) and Article 8(3) of Regulation No 1370/2007, in order to determine whether an operator, such as Autolinee Toscane in the main proceedings, must be excluded from a competitive tendering procedure on the ground that that operator is controlled by another operator, namely RATP in that dispute, which was directly awarded a contract before the entry into force of that regulation.

28.

In my view, no provision of Regulation No 1370/2007 precludes, in the circumstances of the main proceedings, a public service transport contract from being awarded to an operator such as Autolinee Toscane on the basis of a competitive tendering procedure.

29.

Three distinct and autonomous grounds constitute the basis for this approach, that is to say the transitional arrangement provided for in Article 8(2) of Regulation No 1370/2007 (Section A), the transitional arrangement provided for in Article 8(3) of that regulation (Section B) and the relationship between Article 5(2) and Article 5(3) of that regulation (Section C).

30.

For the sake of completeness, I shall examine in Section D the concepts of ‘internal operator’ and ‘competent authority’, which are the subject matter of the second and third questions.

31.

The first question raised by the referring court concerns the applicability of Article 5(2) of Regulation No 1370/2007 to direct awards made before the entry into force of that regulation. In the dispute in the main proceedings, that question concerns the direct award of a contract to RATP in France, which is not the subject matter of that dispute but which might, according to the argument put forward by Mobit, lead to Autolinee Toscane being excluded from the award procedure at issue in that dispute, pursuant to Article 5(2)(b) of that regulation. ( 4 )

32.

However, before even examining that question, it is necessary to ask whether a competent authority such as the Regione Toscana was required to comply with Article 5 of Regulation No 1370/2007 in the context of an award procedure closed on 2 March 2016, such as that at issue in the main proceedings. ( 5 )

33.

In my view, first of all, it follows from the transitional arrangement provided for in Article 8(2) of Regulation No 1370/2007 that Article 5 of that regulation is not applicable in the context of an award procedure such as that at issue in the main proceedings (subsection 1).

34.

Next, for the sake of completeness, I shall examine an argument put forward by Mobit according to which that transitional arrangement relates only to Article 5(3) of that regulation, notwithstanding the clear wording of Article 8(2) of the regulation (subsection 2).

35.

Lastly, I shall set out the reasons why it is necessary to draw a distinction between the transitional arrangement provided for in Article 8(2) of Regulation No 1370/2007 and that provided for in Article 8(3) of that regulation (subsection 3), that latter arrangement forming the subject matter of Section B of this Opinion.

36.

I would point out that Article 12 of Regulation No 1370/2007 provides that that regulation is to enter into force on 3 December 2009. However, the first sentence of the first subparagraph of Article 8(2) of that regulation provides that the award of public service contracts for transport by rail and by road must comply with Article 5 of that regulation as from 3 December 2019.

37.

In other words, the first sentence of the first subparagraph of Article 8(2) of Regulation No 1370/2007 provides for a transitional period of ten years, from the entry into force of that regulation until 2 December 2019, during which the competent authorities of the Member States are not required to comply with Article 5 of that regulation when awarding a public service contract for the provision of road transport, such as the contract at issue in the main proceedings.

38.

The dispute in the main proceedings concerns an award made on 2 March 2016, that is before the expiry of that transitional period. ( 6 ) I infer from this that the Regione Toscana was not required to comply with Article 5 of Regulation No 1370/2007 in the context of that dispute.

39.

It would be otherwise only if the award at issue in that dispute fell within a national scheme implementing in advance Article 5 of Regulation No 1370/2007, as expressly authorised and even encouraged by the second sentence of the first subparagraph of Article 8(2) of that regulation. In such circumstances, it would be necessary to conclude that the Regione Toscana was indeed required to comply with Article 5 in that dispute, to the extent determined by that national scheme.

40.

However, there is no evidence in the file before the Court that the Italian Republic or the Regione Toscana decided to implement Article 5 of Regulation No 1370/2007 in advance, that is to say before the expiry of the transitional period. When questioned on this subject at the hearing, the Italian Government and the Regione Toscana confirmed that there had been no advance implementation. It is, however, for the referring court to verify that this is indeed the case.

41.

Accordingly, I propose that the Court answer as follows the questions referred for a preliminary ruling. Article 8(2) of Regulation No 1370/2007 must be interpreted as meaning that Article 5 of that regulation is not applicable in the context of an award procedure carried out before the expiry of the transitional period prescribed in Article 8(2) of that regulation, such as that at issue in the main proceedings, except where that award falls within a national scheme implementing Article 5 of that regulation in advance and to the extent determined by that scheme.

42.

It is apparent from the wording of Article 8(2) of Regulation No 1370/2007 that that provision establishes a temporary exemption covering the whole of Article 5 of that regulation, as argued by Autolinee Toscane, the Regione Toscana, RATP and the French Government.

43.

Nevertheless, the Commission, in its interpretative guidelines concerning Regulation No 1370/2007, has stated that ‘only Article 5(3) … seems pertinent in this context’. ( 7 ) Mobit supported that interpretation in its written observations.

44.

To justify that interpretation, the Commission put forward a systemic argument in its guidelines. In the Commission’s view, the provisions of Article 5 of Regulation No 1370/2007, other than those contained in Article 5(3), are ‘more lenient [than] the general Treaty principles and corresponding case-law’. In other words, the ‘freezing’ of the application of those provisions during the transitional period would compel the competent authorities to comply with stricter obligations, that is those deriving from general Treaty principles and the corresponding case-law.

45.

In my view, that interpretation must be rejected for the following three reasons.

46.

First of all, it contradicts the unambiguous wording of the first subparagraph of Article 8(2) of Regulation No 1370/2007, which refers to Article 5 of that regulation without further qualification.

47.

Next, it is not for the Court to ‘intuit’ the scope of a transitional arrangement, such as that provided for in Article 8(2) of Regulation No 1370/2007, by making systemic comparisons between the obligations arising, respectively, from two instruments, in the present case that regulation and the FEU Treaty. Such an approach would, in my view, set a dangerous precedent in the light of the principles of the separation of powers and legal certainty.

48.

Lastly, it seems to me that the Commission is seeking to reintroduce, by way of interpretation, a restriction which has been rejected by the EU legislature. That restriction of the scope of Article 8(2) of Regulation No 1370/2007 was not only not provided for in the first version of that regulation, as adopted on 23 October 2007, but was also rejected by the EU legislature when it adopted Regulation (EU) 2016/2338 of the European Parliament and of the Council of 14 December 2016 amending Regulation No 1370/2007 concerning the opening of the market for domestic passenger transport services by rail. ( 8 )

49.

In its proposal for an amending regulation, the Commission had expressly proposed restricting the scope of Article 8(2) of Regulation No 1370/2007 solely to Article 5(3) of that regulation. ( 9 ) However, the final text of the amending regulation, as adopted by the Council and the European Parliament, contains no such restriction. ( 10 )

50.

I infer from the foregoing that Article 8(2) of Regulation No 1370/2007 provides for a transitional period during which none of the provisions of Article 5 of that regulation are binding.

51.

For the following reasons, I consider that Article 8(2) and Article 8(3) of Regulation No 1370/2007 establish two distinct transitional arrangements, as argued, in essence, by RATP, the French Government and the Commission.

52.

I would point out, as a preliminary point, that the legislative process leading to the adoption of Regulation No 1370/2007, which was initiated by a Commission proposal dated 26 July 2000, was particularly long and difficult. Following a lasting stalemate within the Council, ( 11 ) substantial amendments were made to the text initially proposed by the Commission. In particular, the transitional mechanisms provided for in Article 8(2) and (3) of that regulation are, to a large extent, based on the Common Position adopted by the Council on 11 December 2006. ( 12 )

53.

In the first place, those two provisions cover awards made during different periods. Article 8(2) of Regulation No 1370/2007 aims to ensure a transition for new awards, that is to say those made after 3 December 2009, the date of entry into force of that regulation. ( 13 ) On the other hand, Article 8(3) of that regulation sets out a transitional mechanism for existing awards, that is to say those made before 3 December 2009.

54.

In the second place, the expiry dates of the two transitional mechanisms differ. On the one hand, the mechanism established in Article 8(2) of Regulation No 1370/2007 expires on 2 December 2019. It is clear from the wording of that provision that it is necessary to comply with Article 5 of that regulation as from 3 December 2019.

55.

On the other hand, Article 8(3) of that regulation provides that contracts awarded in the past may continue until they expire, whilst prescribing a deadline for most of those contracts. To take a specific example, the contract directly awarded by the French State to RATP, which was relied upon by Mobit in the main proceedings, expires on 31 December 2039 but may benefit from the arrangement provided for in the aforementioned provision only until the deadline of 3 December 2039. ( 14 ) Therefore, it is clear that the duration of that second transitional mechanism does not coincide with the duration of the first transitional mechanism, which expires on 2 December 2019.

56.

Thus, the first transitional mechanism defers the application of Article 5 of Regulation No 1370/2007 to new awards until 3 December 2019, whereas the second transitional mechanism precludes the application of that regulation to existing awards until their expiry or a prescribed deadline.

57.

In the third place, the scope of the transitional mechanism provided for in Article 8(2) of Regulation No 1370/2007 is limited to Article 5 of that regulation, the application of which is delayed for new awards made between 3 December 2009 and 2 December 2019. However, the transitional mechanism provided for in Article 8(3) of the regulation is not, in my view, restricted to a particular provision and thus covers all the provisions of that regulation, which provisions cannot be applied to existing awards. ( 15 )

58.

In the fourth place, the opening words of Article 8(2) of Regulation No 1370/2007, that is to say the phrase ‘without prejudice to paragraph 3’, suggest the existence of an additional transitional mechanism established in Article 8(3). Similarly, the expression ‘in the application of paragraph 2’, used in Article 8(3) of that regulation, evokes the complementary nature of the mechanism provided for in that provision.

59.

In the fifth place, the intention to establish two distinct transitional mechanisms also follows from the common position adopted by the Council, ( 16 ) on which the wording of Article 8 of Regulation No 1370/2007 is based.

60.

In summary, as the French Government clearly explained at the hearing, Regulation No 1370/2007 provided for three distinct arrangements on the basis of the date of the contract award, with a view to reconciling the imperatives of openness to competition, legal certainty and legitimate expectations.

61.

The definitive arrangement applies to new awards of contracts made as from 3 December 2019, which must comply with Regulation No 1370/2007 in their entirety.

62.

The first transitional arrangement concerns new awards made between 3 December 2009 and 2 December 2019, in respect of which the application of Article 5 of that regulation is suspended pursuant to Article 8(2) of the regulation.

63.

The second transitional arrangement excludes the application of the regulation to awards made before 3 December 2009, in accordance with the detailed rules laid down in Article 8(3) of that regulation.

64.

In the following section, I shall examine the applicability of that last arrangement in circumstances such as those of the main proceedings.

65.

By its first and fourth questions, which must be examined together, the referring court asks, in essence, whether Article 8(3) of Regulation No 1370/2007 must be interpreted as meaning that Article 5(2) of that regulation is applicable to the direct award of a contract made before the entry into force of the regulation, it being understood that that contract will expire after the 30-year period prescribed for the contracts referred to in point (b) of the first subparagraph of Article 8(3) of that regulation.

66.

I would again emphasise that the ‘direct award’ referred to in that question was not made by Regione Toscana in the procedure which gave rise to the dispute in the main proceedings, since that procedure took place in the context of a competitive tender organised after the entry into force of Regulation No 1370/2007.

67.

In fact, that question concerns the direct award of a contract to RATP in France before that regulation entered into force. I would point out, in that regard, that the referring court seeks to ascertain whether Autolinee Toscane must be excluded from the award procedure at issue in the main proceedings on the ground that it is controlled by RATP. ( 17 )

68.

Like the French Government and the Commission, I consider that, in accordance with the detailed rules provided for in Article 8(3) of Regulation No 1370/2007, Article 5(2) of that regulation, and in particular Article 5(2)(b) thereof, does not apply to a direct award made before that regulation entered into force, for the following reasons.

69.

In the first place, it is clear from points (a) to (d) of the first subparagraph of Article 8(3) of Regulation No 1370/2007 that that transitional arrangement applies to any contract awarded before the entry into force of that regulation on 3 December 2009. ( 18 )

70.

In the second place, the purpose of Article 8(3) of Regulation No 1370/2007 is to exclude the application of that regulation, in accordance with the detailed rules laid down in that provision, to contracts awarded before 3 December 2009. That exclusion may, in my view, take two distinct forms.

71.

First, the validity of such contracts cannot be called into question on grounds of infringement of Regulation No 1370/2007, and in particular Article 5 thereof. This follows from the second subparagraph of Article 8(3) of that regulation, according to which the contracts referred to ‘may continue’.

72.

Secondly, under the first subparagraph of Article 8(3) of that regulation, ‘no account shall be taken of’ such contracts. I infer from that provision that the competent authorities of the Member States must not take into account contracts awarded before the entry into force of that regulation when awarding a contract pursuant to Article 5 of that regulation.

73.

In the dispute in the main proceedings, only that second effect is relevant, since the referring court is raising the question of the possibility of excluding Autolinee Toscane from the award procedure at issue on account of the direct award of a contract to RATP before 3 December 2009.

74.

In the third place, the second subparagraph of Article 8(3) of Regulation No 1370/2007 determines the duration of that transitional arrangement, which varies according to the date and type of award.

75.

In that regard, it is clear from the findings of fact made by the Tribunale amministrativo della Toscana (Administrative Court of Tuscany, Italy), which were reproduced by the referring court ( 19 ) and have not been challenged by the parties submitting observations to the Court, that:

76.

Consequently, the contract awarded to RATP in France falls within point (b) of the first subparagraph of Article 8(3) of Regulation No 1370/2007, as noted by the referring court.

77.

Under the second subparagraph of Article 8(3) of that regulation, those types of contract may ‘continue until they expire, but for no longer than 30 years’.

78.

It is unfortunate that this latter provision does not specify the starting point of the 30-year period, as pointed out by Mobit and by the Commission. In theory, there are various possible starting points, such as the date of the original draft regulation proposed by the Commission (26 July 2000), as suggested by Mobit, the date of the entry into force of Regulation No 1370/2007 (3 December 2009), the day following the expiry of the transitional period established in Article 8(2) of that regulation (3 December 2019), the date on which the contract in question was awarded, or even the date on which the contract came into effect.

79.

However, in my estimation the starting point for that 30-year period should be the date of the entry into force of Regulation No 1370/2007, for the following two reasons. First, using a date that relates to the contract in question would not permit the application of a uniform solution to all contracts that come within Article 8(3) of that regulation. This would give rise to implementation difficulties for the competent authorities and to legal uncertainty for operators in the transport sector.

80.

Secondly, it should be noted that that provision refers to all contracts entered into before 3 December 2009, which is the date on which the regulation came into force. Therefore, it seems reasonable to me to consider that this date also represents the starting point for the 30 years stipulated in the second paragraph of Article 8(3) of Regulation No 1370/2007 with regard to the contracts referred to in subparagraphs (b) and (c) of the first paragraph of Article 8(3) of that regulation, as assumed by the referring court and the French Government.

81.

According to that interpretation of the relevant provisions, this 30-year period must therefore be considered to expire on 3 December 2039. ( 20 )

82.

By its fourth question, the referring court seeks to clarify whether the contract awarded by the French Government to RATP can take advantage of the transitional arrangement set out in Article 8(3) of Regulation No 1370/2007 even though that contract will expire on 31 December 2039, that is, after 3 December 2039, which is the date on which the 30-year period expires.

83.

On this point, Mobit argues that the contract awarded to RATP does not comply with the aforesaid provision, because of the duration of the contract. However, it seems to me that this stance is the product of confusion between the conditions required in order for the transitional arrangement to apply and the effects of that arrangement.

84.

On the one hand, it can be seen from the wording of the first subparagraph of Article 8(3) of Regulation No 1370/2007 that that transitional arrangement applies to all contracts awarded before 3 December 2009, regardless of their duration. On the other, the second subparagraph of Article 8(3) specifies the effects and duration of the arrangement rather than the type of contract that is subject to them.

85.

Under this interpretation of the relevant provisions, there can be no doubt that the contract awarded by the French Government to RATP can indeed take advantage of the transitional arrangement set out in Article 8(3) of Regulation No 1370/2007, in spite of the fact that it will expire on 31 December 2039, as stated by Autolinee Toscane, RATP, the region of Tuscany, the French and Portuguese Governments, and the Commission. However, it may benefit from that arrangement only during the period of 30 years laid down for the contracts specified in point (b) of the first subparagraph of Article 8(3) of that regulation, which will expire on 3 December 2039.

86.

Consequently, Article 5(2)(b) of Regulation No 1370/2007 may not apply to a contract such as that held by RATP until 4 December 2039. The relatively lengthy duration of that transitional arrangement can be attributed, in particular, to the difficulty in reaching agreement within the Council on the adoption of the aforesaid regulation. ( 21 )

87.

Having regard to the considerations set out above, I propose that the Court of Justice should reply to the first and fourth questions referred as follows: Article 8(3) of Regulation No 1370/2007 must be interpreted as meaning that Article 5(2) and (3) of that regulation does not apply to a contract specified in point (b) of the first subparagraph of Article 8(3) of that regulation for a period of 30 years, which will expire on 3 December 2039, in spite of the fact that that contract will expire after 3 December 2039.

88.

Like the answer proposed in Section A of this Opinion, that answer provides a response to all the questions raised by the referring court. In the further alternative, I shall examine in the next section whether Article 5 of Regulation No 1370/2007 may be interpreted as meaning that an undertaking must be excluded from a competitive tendering procedure on the ground that it is controlled by an undertaking which previously benefited from a direct award.

89.

The second and third questions raised by the referring court are based on a premiss which requires particular examination, that is to say the possibility or even obligation to exclude an undertaking, such as Autolinee Toscane in the dispute in the main proceedings, from a competitive tendering procedure, within the meaning of Article 5(3) of Regulation No 1370/2007, on the ground that that undertaking or the undertaking which controls it, such as RATP in that dispute, has been directly awarded a contract for the purposes of Article 5(2) of that regulation.

90.

For the following reasons, I consider that that premiss is erroneous. Indeed, I agree with the position put forward by the Commission that an undertaking cannot be excluded from a competitive tendering procedure on the ground that it has also been directly awarded a contract.

91.

I would point out that Article 5 of Regulation No 1370/2007 offers the competent authority the freedom to choose between a direct award procedure, governed by Article 5(2) of that regulation, and a competitive tendering procedure, referred to in Article 5(3) of that regulation.

92.

Nevertheless, that freedom of choice was made subject to a requirement that the activity of the internal operator be geographically limited if the competent authority chooses to award a contract directly. That principle of limitation, the content of which is set out in Article 5(2) of Regulation No 1370/2007, is intended to prevent any distortions of competition which might result from the participation, in a competitive tendering procedure, of an internal operator benefitting from favourable economic terms under another contract awarded without a competitive tender.

93.

None of the parties submitting observations to the Court has disputed the principle of that requirement to limit the activities of the internal operator. However, those parties have put forward differing views as to the penalty provided for in the event of infringement of that requirement.

94.

The referring court has assumed that that penalty consists in the exclusion of internal operators from all competitive tendering procedures. That view has been taken by Mobit and the Italian Government.

95.

On the other hand, Autolinee Toscane, Regione Toscana, RATP, the French Government and the Commission have argued that an internal operator’s participation in a competitive tendering procedure does not lead to that operator’s exclusion from that procedure but rather to the invalidity of the direct award from which that operator benefited.

96.

In my view, failure to comply with the limitation requirement laid down in Article 5(2)(b) of Regulation No 1370/2007 cannot have any impact on a competitive tendering procedure within the meaning of Article 5(3) of that regulation.

97.

First, I note that the limitation requirement is provided for in Article 5(2) of Regulation No 1370/2007, which governs direct awards, and not in Article 5(3) of that regulation, which covers awards by way of a competitive tender.

98.

Secondly, that interpretation follows from the wording of Article 5(2) of Regulation No 1370/2007. Indeed, it is apparent from Article 5(2)(b) of that regulation, and in particular from the words ‘the condition for applying this paragraph is that’, that the requirement to limit the activities of the internal operator is a condition for the validity of internal award procedures.

99.

Thirdly, the wording of the second sentence of Article 5(3) of Regulation No 1370/2007 also militates against excluding operators who have benefited from a direct award, since it expressly requires that that procedure be ‘open to all operators’. I would point out, in that regard, that Article 5(3) of that regulation, which concerns competitive tendering procedures, contains a reference neither to the limitation requirement laid down in Article 5(2)(b) of that regulation nor to any similar requirement.

100.

It is true that a formal reading of the wording ‘any competent authority which has recourse to a third party other than an internal operator’, which opens the first sentence of Article 5(3) of Regulation No 1370/2007, might suggest that all internal operators are automatically excluded from competitive tendering procedures. In reality, that expression necessarily refers only to the internal operators of the competent authority concerned, namely the authority which is awarding the contract by competitive tender.

101.

Indeed, the effect of that wording is not to exclude any internal operator from competitive tendering procedures, but rather to require competitive tendering whenever a competent authority does not directly award a contract in accordance with Article 5(2) of Regulation No 1370/2007. In other words, competent authorities are required to award a contract either directly or following a competitive tendering procedure, ( 22 ) and are also required, when opting for the latter procedure, to open it to all operators.

102.

Fourthly, the interpretation proposed by the Commission is consistent with one of the objectives pursued by Regulation No 1370/2007, namely to increase the use of competitive tendering procedures for the award of public service transport contracts. ( 23 ) According to that interpretation, an internal operator’s participation in a competitive tendering procedure is liable to be penalised by the invalidity of the direct awards made to it. ( 24 ) In my view, there is little doubt that that penalty is likely to deter an internal operator from participating in a competitive tendering procedure. Nevertheless, any internal operator remains fully entitled to participate in competitive tendering procedures, the effectiveness of which is thus preserved.

103.

I infer from the foregoing that Article 5 of Regulation No 1370/2007 must be interpreted as meaning that it does not preclude a public service transport contract, such as that at issue in the dispute in the main proceedings, from being awarded on the basis of a competitive tendering procedure to an operator controlled by another operator which was directly awarded a contract before the entry into force of that regulation.

104.

On the other hand, the participation of an internal operator in a competitive tendering procedure could, where appropriate, call into question the validity of the direct award of a contract to that undertaking, or to the undertaking which controls it, assuming that Article 5 is applicable. ( 25 ) I would point out that that issue, in my view, falls outside the subject matter of the dispute in the main proceedings.

105.

Like RATP, Autolinee Toscane, the French Government and the Commission, I consider that there is no need to answer the second and third questions.

106.

It is clear from the answers which I have proposed in the preceding sections of this Opinion that Regulation No 1370/2007 does not preclude, in the circumstances of the main proceedings, a public service transport contract from being awarded on the basis of a competitive tendering procedure to an operator such as Autolinee Toscane.

107.

Nevertheless, for the sake of completeness, I shall briefly answer in this section the second and third questions.

108.

By its second question, the referring court asks, in essence, whether Article 2(j) and Article 5(2) of Regulation No 1370/2007 must be interpreted as meaning that it is possible to regard as an ‘internal operator’ a legal person governed by public law to which a State authority has directly awarded a public service contract for the provision of local transport and which is directly connected to that authority in terms of its organisation and control and whose capital is owned by the State.

109.

According to the explanations provided by that court, that question seeks to clarify the status of RATP in the light of that regulation.

110.

In my view, the answer to that question largely depends on the findings of fact which fall within the jurisdiction of the national court.

111.

More specifically, it is for the national court to ascertain whether the competent authority exercises over the operator concerned ‘control similar to that exercised over its own departments’, in the light of the criteria laid down in Article 5(2)(a) of Regulation No 1370/2007.

112.

As Mobit rightly noted, the fact that an operator, such as RATP, takes the legal form of a legal person governed by public law is irrelevant for the purposes of classification as an internal operator. Regulation No 1370/2007 makes no distinction between public undertakings and private undertakings, according to recital 12 thereof.

113.

By its third question, the referring court asks, in essence, whether Article 5(2) of Regulation No 1370/2007, read in the light of Article 2(b) of that regulation, must be interpreted as meaning that a contract which has been directly awarded in accordance with that provision may subsequently be excluded from its scope because the power to organise the transport services concerned has been transferred to an institution which does not exercise ‘similar control’ over the contractor directly awarded those services.

114.

According to the explanations provided by the referring court, that question is motivated by the need to identify the competent authority for the transport services provided by RATP. According to that court, that competent authority could be either the French State, which has retained the real right to award the concession granted to RATP, or the Syndicat des transports d’Île-de-France (‘STIF’), a public administrative institution which has not been controlled by the French State since 2004 and which has been entrusted with the task of organising transport in the Paris area. The referring court points out, however, that STIF has no power as regards the supervision, arrangements, scope and duties of the concession awarded ‘ex lege’ to RATP.

115.

Again, I feel that the answer to that question largely depends on findings of fact which it is for the national court to make.

116.

In the light of the definition of ‘competent authority’ set out in Article 2(b) of Regulation No 1370/2007, three scenarios may be envisaged following the transfer to STIF of the power to organise the transport services concerned:

117.

Thus, for the purposes of deciding whether the contract directly awarded to RATP continues to fall within Article 5(2) of Regulation No 1370/2007, the national court must determine, first, whether the French State and/or STIF must be regarded as competent authorities. Secondly, it must assess whether the requirements of ‘similar control’ and of limitation of the internal operator’s activities are fulfilled.

118.

In accordance with the wording of the question raised, the referring court considers that STIF does not exercise ‘similar control’over RATP, for the purposes of Article 5(2) of Regulation No 1370/2007. Therefore, the contract held by RATP continues to fall within that provision, notwithstanding the transfer to STIF of the power to organise the transport services concerned, if, first, the State authority retains, alone or jointly with STIF, the power to intervene in public passenger transport in the geographical area concerned (and hence may be regarded as a ‘competent authority’) and, secondly, that authority continues to exercise ‘similar control’ over the contractor.

119.

I therefore propose that the Court answer as follows the second and third questions referred.

120.

Article 5(2) of Regulation No 1370/2007, read in the light of Article 2(j) of that regulation, must be interpreted as meaning that it is possible to regard as an ‘internal operator’ a legal person governed by public law to which a State authority has directly awarded a public service contract for the provision of local transport, provided that that authority exercises over that person ‘control similar’ to that exercised over its own departments.

121.

Moreover, Article 5(2) of Regulation No 1370/2007, read in the light of Article 2(b) of that regulation, must be interpreted as meaning that the transfer of the power to organise transport services from the State authority to an institution not exercising ‘similar control’ over the contractor does not result in the exclusion of the contract awarded from the scope of that provision provided, first, that the State authority retains, alone or jointly with that institution, the power to intervene in public passenger transport in the geographical area concerned (and hence may be regarded as a ‘competent authority’) and, secondly, that that authority continues to exercise ‘similar control’ over the contractor.

122.

In view of the foregoing, I propose that the Court answer as follows the questions referred by the Consiglio di Stato (Council of State, Italy):