AN EU INITIATIVE ON CONCESSIONS

Transcription

1 AN EU INITIATIVE ON CONCESSIONS QUESTIONNAIRE TO BUSINESS The Commission is presently assessing the need for and impact of an initiative on concessions 1 with a view to improving the current legal framework. In this context, the Commission has prepared the present questionnaire the aim of which is to learn from private and public undertakings, as well as from their associations on their experience with concessions, hear their views on how the present rules work and to gather suggestions for improvements. The questionnaire is part of a wider consultation of stakeholders which includes an open consultation and two other specific questionnaires addressed to social partners and contracting authorities. An initiative on concessions would aim to facilitate the use of concessions and ensure best value for money for both users and contracting authorities, by providing all interested parties with legal security and guaranteeing transparency and equal treatment for economic operators. It would also enhance competition and the internal market in concessions contracts, and contribute to EU policy goals in the field of Public-Private Partnerships, as explained in the Commission's Communication on «Mobilising private and public investment for recovery and long term structural change: developing Public Private Partnerships». In line with the Lisbon Treaty provisions and, in particular, the principle of proportionality, and taking into due account of the Commission's guidelines on «Better Regulation» as well as the European Parliament's report on new developments in public procurement (2009/2175(INI)), the Commission will seek to establish the most appropriate way to meet those objectives without making the legal framework too complex or burdensome while ensuring the necessary legal certainty. Profile: Name: Abertis Infraestructuras, S.A. DISCLAIMER: This is a working paper compiled by abertis Corporate Legal Department, with the assistance of the Strategy and Corporate Development Department as well as the Studies and Communications Corporate Department. Abertis Infraestructuras, S.A. takes no responsibility for any errors or omissions in the information contained in this paper or for the correctness thereof. 1 According to the current definition of concessions set out in art. 1 (3) 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, ( concessions are contracts similar to public contracts, with a difference that the contractor bears the economic risk of the exploitation of the work or service at stake. In light of the resulting case law of the EU Court of Justice, "the essential characteristic of the concession is that it is the concessionaire himself who bears the main, or at least the substantial, operating risk". 1

2 0.a. Type of organisation Public company (i.e. a sociedad anónima of Spanish law) 0.b Scope of activity World 0.c Size of the respondent If you respond as a company: - How many people do you employ? 12,500 as a group worldwide. - What is your average turnover over the last 3 years? 3,750 million euros. If you respond as an industry or professional association, what is the approximate N/A - Number of members and geographic coverage of your association - Total number of employees of the members of the association, - Aggregate turnover of the members of the association? 0.d What sector(s) do you operate in / do you represent? Airport services Road & Motorway operation Car parks Other: Telecommunications infrastructures, development and operation of logistic parks. 0.e Country where your organisation / company is based AT BE BG CY CZ DE DK EE EL ES FI FR HU IE IT LT X LU LV MT NL PL PT RO SE SI SK UK IS LI NO CH 2

3 0.f Experience with concessions - Does your company currently hold a concession? The abertis group is ranked third in Europe in terms of kilometres managed trough concession agreements (3,527 kilometres). In Spain, it is the largest group of highcapacity route operators and it manages, also through concessions, more than 1,500 kilometres of toll-roads. Also, abertis participates in the management of 5,795 additional kilometres, through its stakes in concessions in Italy, Portugal, the UK, Argentina and Chile. The group has also relevant concession agreements in the airport and car park sectors in Europe. abertis airports network includes several international airports, managed under a system of ownership or concession, in the United Kingdom (London Luton Airport, Cardiff and Belfast International) and in Sweden (Stockholm Skavsta). Saba, a wholly-owned subsidiary of abertis, is the leading car parks operator in Spain and one of the largest in Europe. It has a presence, also mostly through concessions, in more than 70 towns and cities in Spain, France, Italy, Portugal and Andorra, making it one of the industry s leading companies. - Have you ever participated in a concession tendering procedure in a Member State other than the one you are established in? If not, please indicate the reasons. Yes. Please refer to the previous answer. Assessment of the current situation 1. What is according to your estimation - the economic importance (by number and value of contracts) of the use of concessions in the market(s) where you presently operate and/or you are familiar with? We do not have precise data to answer this question accurately. What is their increase potential? The potential for a considerable increase in the use of concession agreements in the transport infrastructures sector is high in mostly all markets (both by country and by specific areas of activity) particularly given the current economic situation and the states interest in finding a right balance between the objectives of giving a stimulus to the economy and curbing fiscal deficits. Nevertheless, there may be differences between specific areas of activity. Please respond to the aforementioned questions for each market separately. 3

4 2. Are you familiar with the jurisprudence of the Court of the EU on definition and award of concessions? Yes. Do you consider it to provide sufficient clarification as to your rights and guarantees under EU law on the award of concessions in the Member States where you presently operate and/or you are familiar with (please specify the Member State(s), if more than one, please respond separately for each Member State concerned)? Please explain your answer. No. The Court s jurisprudence may be clear as regards the definition of concessions but has not moderated the somewhat inflexible and very broad application, particularly to contracts outside the scope of the Directives, in the field of procurement of the principle of transparency issued directly from the EU Treaties without further development. There is no doubt that transparency is critical to a fair and efficient public procurement system, but a rigid interpretation of the contents of such sketchily articulated Treaty principle has led to unexpected and certainly unwanted results and deprived the EU procurement regime of the legal certainty it requires. Further legislative development of the principle and its adjustment to the variety of scenarios and types of contracts possible are much needed. As regards legal certainty, we describe two different scenarios depending on the EU Member States where abertis operates and we are familiar with: a) Member States with a long-standing tradition of fully-regulated concession agreements in light of an overarching goal of public service. That is the case of Spain, France, Italy or Portugal. b) Member States where concession agreements are not regulated by statute, such as the United Kingdom. In the first case, Member States regulate concession agreements in full, from the moment the contract is publicly tendered until termination, including the most relevant events foreseeable in the life of the agreement. Logically, these legislations, which cover long-term concessions (in Spain, up to 50 years for service concessions) regulate the possibility to modify the terms and conditions of the concessions. The stated purpose of these legislations is to attain the best management of a public service, whose requirements may evolve with time. In these legislations concepts such as ius variandi, factum principis and force majeure have a long-standing tradition and allow for contract modifications if the general interest so requires, provided appropriate compensation is granted to the concessionaire. In Member States which lack a regulation of the contents of concession agreements, an overly strict interpretation of the EC case law has the effect of hampering any reasonable evolution of a concession contract. 4

5 3. The Commission explained the definition and the application of the Treaty principles to the award of concessions in its Communication on Concessions 2 and on the Green paper on PPPs 3. Do you consider that the guidance provided by the Commission is sufficient to ensure equal access to the award of concessions in the Member States where you operate and/or you are familiar with? Please respond separately for each relevant Member State and explain your answer. Both documents are helpful as they insist on and clarify rules and principles that ensure an equal access to the award of concessions in the Member States, as well as a fair and transparent procedure based in the principles of non-discrimination, equality of treatment, transparency, mutual recognition and proportionality in all the EU Member States in which abertis operates. Nevertheless, as explained above, more legal certainty is required in the area of concession contract variations. 4. In your view, are there any entry barriers to concession markets in EU Member States? If so, please name them and explain. No. In our view there are no relevant legal or procedural entry barriers to concession markets in EU Member States in the sectors in which abertis operates (transport infrastructures such as toll-roads, airports or car parks). In these sectors competitors for the grant of concession agreements are relatively large and have the capacity to compete on equal terms. There may be natural entry barriers based on language, local knowledge, etc. which put local bidders at advantage even in public tenders of large and complex infrastructure projects (they have a better knowledge of local needs, etc.) but tender procedures in this sector generally respect EU requirements for transparency and non-discrimination. 5. Please describe the advertisement practices for the award of services concessions in the Member States where you presently operate and/or you are familiar with (please specify the Member State(s), if more than one, please respond separately for each Member State concerned). Advertisement practices in the Member States and sectors in which abertis operates are generally correct and ensure transparency and orderly tender processes. 2 Commission interpretative communication on concessions under Community law, Official Journal C 121, 29/04/2000, 3 Green Paper on public-private partnerships and Community law on public contracts and concessions, COM/2004/0327 final, 5

6 In particular, at what level does publication take place? In Spain, France, Italy, Portugal and the United Kingdom: x Local, x Regional, x National, x International What information is to be included in the call for tender? In Spain, France, Italy, Portugal and the United Kingdom: x Name and contacts of the contracting authority x Nature, extent and value of the services and subsidiary works x Time limit for submission of offers x Personal, technical and financial conditions to be met by the candidates x Award procedure chosen x Criteria which will be applied in the award of the contract. Name and address of the body responsible for appeal and, where appropriate, mediation procedures. What sectors are concerned (see point 0d)? Please respond separately for each relevant Member State. Generally, all sectors mentioned in point 0d above. 6. Are you aware of any practices of direct award of concessions in the EU? If yes, please provide, if possible, concrete examples. No. 7. Do you consider that the advertisement practice of service concessions in the EU Member States where you presently operate and/or you are familiar with is usually fair and transparent and ensures effective access to the market? Yes. The advertisement practice in the Member States in which abertis operates is transparent and ensures effective access to the market. 6

7 Is the information easily available to a normally vigilant non-national EU economic operator? Please respond separately for each relevant Member State. We think that this information is easily available to a normally vigilant non-national EU economic operator, through the Official Journal of the European Union in relevant tenders or those submitted to harmonization regulation; the Official Journal of the European Member States and regional or local Official Journals, often made available to potential bidders through the internet (e.g. perfil del contratante in Spain). The relevant size of contracts in our areas of expertise makes it relatively easy to have prompt access to information on new tenders. 8. If you consider that there are no clear rules at EU level governing - publication (in case of service concessions) and - award procedure of concessions, does this situation bring about any additional costs (such as, e.g., the cost of legal advice or paid sources of information) for EU economic operators? If yes, please explain, with reference to each of the cases above. In our view, the rules at EU level governing publication (in case of service concessions) and award procedure of concessions are generally clear. 9. Do you consider the diversity of national rules and practices related to the award of concessions to be an obstacle to the cross-border provision of services? Does it generate any additional costs and administrative burden? Please explain your answer. As far as we are concerned, the current diversity of national rules and practices related to the award of concessions does not create a relevant obstacle to the cross-border provision of services nor relevant additional costs or administrative burden. The problem arises from the different interpretation of some concepts and principles derived from the EU Commission s and Court s jurisprudence (in particularly the broad and vaguely defined transparency requirement) between those Member States with their own concession legislation and those who have simply transposed EU Directives on public procurement and have not coupled it with a set of rules regarding the full duration of public contracts. 10. Can you estimate the average number of tenderers in services concessions award procedures you have participated in? The number of bidders in tenders related to transport infrastructures has usually ranged between five and ten. Were there any tenderers from other Member States? Yes, usually. 7

8 11. With regard to your experience, which are the procedures normally used for the award of concessions in the Member States where you presently operate and/or you are familiar with? Please respond separately for each relevant Member State. Spain: Normally, public tender; open procedure and restricted procedure, exceptionally, negotiated procedure and since 2007 the competitive dialogue. France: Normally, a public tender with two stages, in the second stage the entity/authority can negotiate the bid. Italy: In order to award concessions, the procedure can be carried out as: open procedure (each tender submits the offer pursuant to the terms and conditions set out in the call for competition) and restricted procedure (each candidate must submit an expression of interest in line with the conditions set out in the call for competition and, after this step, the economic operator meeting the requirements makes its tender based on the specifications provided in the invitation to tender issued by awarding authority). United Kingdom: It has implemented the EU procurement directives. Nowadays in United Kingdom authorities are using the competitive dialogue procedure (mostly in PPP projects). 12. In your view, which are the most important features of fair and transparent, concession tendering procedure (with reference to, e.g., technical specifications, selection criteria, award criteria, negotiation)? There must be a right balance between the different qualification and award criteria. 1. For instance, a mere auction based on price is likely to ensure the most objective selection of preferred bidders but may favour inappropriate candidates to the detriment of more experienced and reliable ones. On the other hand, criteria based on the evaluation of know-how, consumer satisfaction, innovation, social welfare 4, etc. may allow for a greater degree of 4 Comparison of Recent Toll Road Concession Transactions in the United States and France. Profs. Germà Bel (Universitat de Barcelona) & John Foote (Harvard University. John Kennedy School of Government). (pp.18-22): (...) in the concept of the public interest which, for the purposes of this paper, we define as being equivalent to the economist s concept of social welfare. Social welfare includes the welfare of all agents involved in or affected by a policy or situation; consumers (users), producers, workers, and taxpayers. There is a fifth party if the policy has relevant external effects (e.g. congestion, pollution, etc.). This social welfare concept can be expresses by the following function: PI SW = CS + β PS + γ WS + δ TS + EE, where SW stands for Social Welfare, CS stands for Consumers Surplus (or Welfare), PS stands for Producer Surplus, WS stands for Workers Surplus Welfare, TS stands for Taxpayers Surplus (all as defined below), and EE stands for External Effects. α, β, γ, and δ are the different weights given to the welfare of each of these groups. (When policymakers make decisions with redistributive implications, they are implicitly weighting each of the categories. If one does not want to consider distributional considerations, we can assume that α = β = γ = δ. In this way, transfers between groups do not 8

9 subjectivity on the side of the contracting authority but are nevertheless important and it is fair that they are considered. Legislations should focus on striking a right balance between these different criteria, while moderating the risks of excessive subjectivity in their evaluation by the contracting authorities by introducing basic guarantees of objectivity and non-discrimination. 2. As to negotiated procedures, while they are undoubtedly useful in the context of complex agreements, the final bid should always refer to a fixed set of contractual terms (resulting from previous negotiations with several bidders selected on the basis of their capacity). 13. Do you consider that the awarding procedure in which you participated in EU Member States were usually fair and transparent? Please respond separately for each relevant Member State. Yes, in all Member States in which abertis is present. 14. Which of the key features you mentioned in your response to question nº 12 were lacking? From our point of view, the only aspect that could be improved is the need to look for higher specification in subjective criteria. 15. What is the average duration of service concessions in the sector you operate in the Member States where you presently operate and/or you are familiar with? The average duration of service concession in the sector where abertis operates is between 30 and 50 years. How does (short or long) duration of concession contracts affect competition for those contracts? Please respond separately for each relevant Member State. In the sectors in which abertis operates, concession agreements must necessarily have a long duration, as duration is directly determined by the size of investment made, which the concessionaire needs to recuperate through the exploitation of the change aggregated social welfare. It is worth noting that even in this trivial case transfers tell interesting stories about winners and losers.) The definitions of the various surpluses are: Consumers surplus is the difference between what a consumer is willing to pay for a good and the actual price of the good. Producer surplus is the difference between what a producer obtains from selling a good and the cost involved in producing it. Workers surplus is the difference between what workers receive from working and the wage that workers would be willing to accept in order to keep the job. Taxpayers surplus is the difference between the utility derived from public services and the costs implied by taxation to pay for the services. With respect to toll road concessions, the following social welfare relationships hold: If lengthening the concession period results in a higher concession price, then local taxpayer surplus increases. Higher tolls paid by consumers results in extra profits for the producer- (i.e. the concessionaire), and this, in turn, increases taxpayer surplus because of the resulting higher concession price The point here is that merely transferring cash from consumers to taxpayers does not increase overall social welfare. (.) 9

10 infrastructure. Short concession terms, if they put at risk the capacity of the concessionaire to obtain an appropriate return on investment, are therefore likely to reduce the interest of potential bidders. Competition between bidders must be guaranteed by means of transparent and non-discriminatory tender procedures. Duration of the contracts as such should not be the most relevant element to judge the quality of a public procurement system. 16. Have you ever challenged a decision of a contracting entity/authority with regard to the award of a services concession? If not, why? No. In our view the procedures in which we have participated have generally been fair. Do you consider that the remedies system for services concessions in place in the relevant Member States allowed for effective challenging of decisions of the awarding authority? Not in all cases, probably. We are confident that this will improve in some Member States with the transposition of Directive 2007/66/EC of the European Parliament and of the Council of 11 December 2007 with regard to improving the effectiveness of review procedures concerning the award of public contracts, and with the creation of a body of first instance, which is independent of the contracting authority, that reviews some contract award decisions. 17. Do you consider it difficult distinguishing between public contracts and concessions 5? Not in the sectors in which abertis operates. If yes, please explain with reference to one or more of the responses below. a) It is difficult to define "substantial" or "significant part" of the operating risk; b) It is not clear what categories of risks are to be taken into account to this effect; c) It is not clear how much of the consideration can be paid by the contracting authority; c) Other reasons (please specify). 18. In your view, what are the possible shortcomings and operational downsides, if any, associated with the present definition of concession in the EU law 6? 5 According to the ECJ judgment in Helmut Mueller case (C-451/08), "the essential characteristic of the concession is that it is the concessionaire himself who bears the main, or at least the substantial, operating risk" 6 See Article 1 (3) and (4) of Directive 2004/18/EC (referred to in footnote 1) 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, ( 10

11 As stated above, it is not the definition of concession which creates any particular issue in the sectors in which abertis operates. It is rather the lack of certainty created by a rigid application of procurement rules to the life of complex and long-term concession agreements, particularly as regards contract variations. 19. Are you aware of any public contracts that have been awarded as concessions in order to elude detailed EU or national law award provisions? If so, please provide, if possible, concrete examples. No. Maybe the only aspect to be improved in some European Members legislation is a better balance between evaluation criteria that are clearly objective and those that allow for a greater degree of subjectivity. 20. Do you consider it difficult distinguishing, with reference to EU law, between public concessions and licences or authorisation schemes? Please explain and, if possible, give examples. No. Again, in the sectors in which abertis operates the relationship between the contracting authority and the private operator is almost always based on a concession agreement, which regulates in detail the rights and obligations of the parties and the possible events in the life of the agreement. Otherwise, if the contracting authority does not transfer the operational risk to the private operator, the relationship may be structured as a service agreement. We understand that there may be a terminology problem that needs to be resolved but in our view a licence or authorisation is the single official act that grants permission to perform an activity or work whereas the concept of public concession makes reference to the full contractual arrangement between the contracting authority and the private operator. 21. Are you aware, in tendering procedures you have participated of any practices of tenderers or of market structures restricting competition between tenderers (i.e. collusion or other unfair methods of competition, oligopolies, etc.)? Please explain. No. 22. What is your assessment of the provisions of Directive 2004/18/EC 7 on works concessions (especially as to what concerns advertisement, time limits, award of complementary works and sub-contracting)? In particular: a) Do they ensure a sufficient degree of transparency and equal treatment of the award procedure? Yes, through publication and the principles of transparency and non-discrimination. b) Do they ensure sufficient degree of legal clarity? 7 See in particular Articles 56 to 65 of Directive 2004/18/EC (referred to in footnote 1). The award of services concessions are presently not subject to any provisions of this Directive (with the exception of the definition itself, see Article 1 (4)). 11

12 Yes, if we refer exclusively to the award procedure. Nevertheless, as explained above, the rigid interpretation and application of some of principles derived from it creates legal uncertainty with a negative effect on the reasonable evolution and adaptation of long-term agreements. c) Do they involve important costs? If yes, what categories of costs (compliance cost? enforcement cost?) and what is their importance in relation to the contract value? No. d) What are their benefits? The possibility to participate in any tender procedure under a shared set of rules and principles such as transparency or non-discrimination. e) What is their impact on prices and quality? The few operators that participate in big infrastructures tender procedure are technically and financially very strong, thus in this area the impact on prices or quality is relatively low. Expected impacts of new legislation on concessions General issues 23. In your opinion, what would be the results of new legislation providing for compulsory advertisement of services concessions at the European level in the Member State where you presently operate and/or you are familiar with, regarding: a) Consumers b) Companies c) Incumbent operators d) Jobs and wages e) Investments and innovation f) The market structure g) Public subventions (associated with the provision of the service)? Compulsory advertisement is positive in general. 12

13 24. Under EU law public authorities are free to provide services (including services of general economic interest) directly or to externalise provision of those services to third parties (i.a. by means of concessions). Without prejudice to this freedom, what could be the impact, if any, of a new legislation providing for compulsory advertisement of concessions at the European level in relation to services which are at present: a) Directly provided by public authorities or public "in-house" 8 entities (notably in terms of possible incentives for shift towards concession-based provision of services)? b) Provided on the basis of concessions (notably in terms of possible incentives for shift towards direct provision of services by administration or public "in-house" entities)? Please distinguish between the likely impact on short, medium and long term. We have not enough data to support a response to these questions. 25. In case of a new legislation providing for compulsory advertisement of services concessions at the European level, do you expect to see new entrants to the market? If yes, please indicate the categories of entrants below which are likely to enter the market Foreign (non-national) companies Domestic companies extending activities to new business areas (e.g. multiutility companies) Joint ventures between national and foreign companies Small and Medium Enterprises We think that nowadays the advertisements of service concessions in European Members are correct. In fact information arrives to the interested parties through official diaries and specific magazines or counsels as stated above under point (7). That is the reason why we would not expect to see new entrants to the market. Specific questions 26. With reference to service concessions would you be in favour of EU rules providing for: 8 The conditions of the "in-house" status have been specified by the ECJ in its judgment in the Teckal case (C- 107/98) 13

14 a) The obligation for the contracting authority to publish a concession notice in the Official Journal of the European Union? What should the thresholds for publication and which method should be used to calculate them? Yes. The threshold for publication should be based on the economic value of the contract in line with current rules for other types of public contracts. b) The obligation to respect minimal deadlines for the presentation of applications for the concession (e.g. not less than 52 days); Yes. c) The obligation for a concession holder to respect the principle of nondiscrimination while selecting holders of sub-contracts (if possible, please also give your assessment of the relevant provision presently applicable to works concession holders) 9 ; We agree with the obligation of concession holders to respect the principle of nondiscrimination while selecting holders of sub-contracts. The relevant provision presently applicable to works concession holders works properly. d) The possibility for direct award of additional services to the original concession holder only if these services, through unforeseen circumstances, have become necessary for the performance of the originally stipulated services and if such additional services are technically or economically inseparable from or strictly necessary for the completion of the original services; Absolutely in favour. If contract extensions or variations were permitted only in those cases where they are explicitly foreseen in the original contract and where their terms have already been agreed, most contracting authorities, particularly in the infrastructure concessions sector, would be placed in an impossible situation. For example, a tollroad cannot have from the start the traffic capacity that may or may not be required in 50-years time. Traffic capacity must evolve with necessity. Otherwise, other key principles of the EU (environmental, social, mobility within the EU, etc.) would be neglected. Although the jurisprudence of the Court of the EU admits changes to the terms of a public contract, it also establishes that Changes to essential terms of contracts not provided for in the initial tender documents require a new procurement procedure. This statement requires much development and refinement by legislation in order to adjust it to the great variety of contracts, EU policy objectives and scenarios that may be envisaged. In the words of Peter Trepte: It is undeniable that certain operators may seek to abuse the possibility of contract variations but to exclude that possibility where there are good reasons for varying the terms of the contract, would be to fly in the face of reality and risk disrupting ongoing contracts with the consequent deleterious effects on value for money. In this area, formulaic application of the 9 See Title III, Chapters II-III of Directive 2004/18/CE 14

15 Directives needs to be avoided in order not to abolish any rule of reason altogether. 10 This has become one of the most difficult issues in mature concession contracts in Europe. Indeed, experience proves that in mature transport-infrastructure concessions, the unforeseen evolution of the different factors affecting them (demographic pressure, high traffic increases, etc.) often renders necessary the expansion of the infrastructure concerned well before the concession period elapses. In these cases, it is also highly likely that an early termination of the concession agreement to allow for a re-tendering procedure is uneconomical and unfeasible for the public authority. A restrictive interpretation to the requirement of necessity for the performance of the service would also have negative consequences for the contracting authorities. It would often force them to maintain in use until the end of the concession period an infrastructure that has run out of capacity and thereby ceased to be adequately fulfilling its intended purpose of public service. Further, if the only solution available to solve recurrent capacity problems is to terminate and re-tender concession agreements, legal insecurity for potential bidders in future tender process would increase considerably. Such a restrictive interpretation of the rule would inhibit rather than promote participation in concessions tender processes. This interpretation is in conflict with the purpose of the regulations and the EU Treaty rules. Experienced competitors in tenders for infrastructure concessions know, accept and share this approach, simply because a future good management of the infrastructure depends on it. Already the working paper on the Report on the public consultation on the green paper on public-private partnerships and community law on public contracts and concessions, elaborated by the Commission Staff (Brussels ) explained that: An overwhelming majority of contributors to the consultation acknowledges the need for adjustments to long-term PPPs over time. It is considered crucial that the initial PPP contracts provide for a certain degree of flexibility. Various contributors say that public services, in particular, need to be adjusted regularly to the changing needs of consumers and public authorities. Thus, PPP contracts should have some scope for adjustments. Furthermore, such provisions in the initial contract are considered unproblematic as they are laid down under conditions of full competition. e) The possibility for the contracting authority to require the concession holder to award a minimum of 30% of sub-contracts to the third parties, or to request the concession holder to specify the percentage of services to be sub-contracted to the third parties; Yes. We are familiar with this formula and it works well. 10 Peter Trepte in Public Procurement in the EU - A practitioner s guide. Oxford University Press

16 f) Effective remedies for aggrieved bidders with the same guarantees as those provided under the Remedies Directives 11? Yes. Please explain your answers above. For each of the above options, please indicate what effects you would expect on access to the market, competition in the sector and what might be other specific positive/negative impact (e.g. on innovation, consumer satisfaction, sustainability of services, public subventions, jobs,) 27. With reference to service concessions and public works concessions would you be in favour of EU rules providing for: a) The obligation to clearly announce qualification criteria restricted to issues related to financial, economic and technical capacity of a tenderer? Please justify indicating possible effects on access to the market and competition in the sector and other specific positive/negative impact (e.g. on innovation, consumer satisfaction, sustainability of services, public subventions, jobs,). Please refer to our answer to question (12) above. b) The possibility for an EU operator (such as a SME) to prove it meets qualification criteria for participation in a tendering procedure in particular by relying on the standing of other entities (other members of the consortium, sub-contractors), regardless of the legal nature of the links which it has with them, provided that it is able to show that it actually has at its disposal the resources of those entities. Yes. In fact, large infrastructure concessions require that bidders team up in consortia, where each consortium member contributes a specific know-how (technical expertise, know-how on construction or management, local knowledge, etc.) or financial capacity. Qualification for participation and award criteria in a tendering procedure should indeed apply to each consortium or group of companies taken as whole, provided consortium members are contractually bound to act together or if applied to a group of companies that these are under common control. c) The obligation to restrict the admissible award criteria to price and economically most advantageous tender? Alternatively, would you be in 11 Directive 2007/66/EC of the European Parliament and of the Council of 11 December 2007 amending Council Directives 89/665/EEC and 92/13/EEC with regard to improving the effectiveness of review procedures concerning the award of public contracts ( Council Directive 89/665/EEC of 21 December 1989 on the coordination of the laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts ( Council Directive 92/13/EEC of 25 February 1992 coordinating the laws, regulations and administrative provisions relating to the application of Community rules on the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors ( 16

17 favour of introducing basic guarantees of objectivity and non-discrimination while setting award criteria? Not always the price or the economically most advantageous offer guarantees the best management of a concession. There are other important matters to take into account such as effective know-how, environmental concerns, innovation, etc. Nevertheless, it is a good idea to introduce basic guarantees of objectivity and nondiscrimination while setting award criteria. This would undoubtedly reduce the risk of discrimination. d) Provisions on non-discriminatory use of technical specifications, e.g. as provided for in Art. 23 of Directive 2004/18/EC? We agree with provisions on non-discriminatory use of technical specifications as the ones provided for in Art. 23 of Directive 2004/18/EC. e) The limitation (with the exception of the utilities sector) of the choice between an open procedure, restricted procedure or competitive dialogue, as described in Directive 2004/18/EC, and admitting negotiated procedure only in exceptional situations, e.g. those currently provided for in Art. 30 of Directive 2004/18/EC? Yes. Please explain your answers above. For each of the above options, please indicate what effects you would expect on access to the market, competition in the sector and what might be other specific positive/negative impact (e.g. on innovation, consumer satisfaction, sustainability of services, public subventions, jobs) 28. Do you consider that the current legal framework of modifications of concessions, as established by the European Court of Justice in its Succhi di Frutta, Pressetext, Acoset and Wall AG judgments12, is sufficiently clear an allows to take into account the evolving nature of concessions? Please explain. No. The case law mentioned refers to specific types of agreements very different in nature and implications from the complex and long-term concession agreements typical in the transport-infrastructures sector. Just as an example, it is hard to extract principles of interpretation from the judgment of the Court on the case 496/99, C.A.S. Succhi di Frutta (which refers to a tendering procedure for the supply of fruit juice) and apply them effectively to a concession agreement for a large transport infrastructure who will always have also important implications on key areas such as mobility of people and goods, environment, social cohesion, etc. As the advocate general Mr. Kokott, in Case C-454/06, Pressetext Nachrichtenagentur GmbH, put it it is necessary to clarify in what circumstances an amendment to an existing contract is to be regarded as the award of a new public service contract. He added that (29) Admittedly, it is not always easy in practice to distinguish between 12 Respectively, cases C-496/99, C-454/06, C-196/08 and C-91/08 17

18 material and non-material contractual amendments because that has to be decided on a case-by-case basis. The use of uncertain legal concepts requiring interpretation is however unavoidable in any area of law and is far from unknown in procurement law. We would add to Mr. Kokott s words that it is also very important to take into account different situations that may not be comparable to each other. A short-term agreement for the distribution of fruit may have little to do with a 35-year concession agreement for the operation of an international airport in some aspects. We agree with the opinion already given by some stakeholders as reflected in the working paper on the Report on the public consultation on the green paper on publicprivate partnerships and community law on public contracts and concessions elaborated by the Commission Staff (Brussels ), section Adjustments to long terms PPPs over time according to which adjustments to the PPP contract or concessions should be allowed, even if they are not provided for in the initial contract or concession. They argue that not all needs for future adjustments of a contract can be foreseen when it is concluded and only practical experience with performance of the contract show whether and where adjustments over time are necessary. 29. If you encountered any problem in relation with the award of concessions other than those referred to in the questions above, or you wish to make any other remarks on a EU initiative on concessions, please describe them here (specifying whether it concerns works concessions or services concessions). 18