Brussels, 09/09/2011 (Agence Europe) - The European Commission will shortly unveil a draft directive on the issuing of concessions (see EUROPE 10427) to ease the legal requirements and bring service concessions in line with the rules for works concessions.
In the preliminary draft directive, which has been seen by this newsletter, the Commission writes that until the exact transparency and non-discrimination requirements have been clarified (under the Lisbon Treaty), legal insecurity increases the risk of illegally awarded contracts having to be annulled and this discourages public authorities from issuing contracts. The directive will amend the two current public procurement directives (2004/18/EC and 2004/17/EC) that lay down rules governing publicity, transparency and equal opportunities. Application of European appeal rules will be extended to contracts under the new directive.
Any industry with a turnover of over €4.8 million will be covered by the directive, but it will not cover services with no commercial value to other countries, like healthcare and social work (crèches, school canteens and the like), which should reassure local authorities that want to keep control over such contracts. Contracts for passenger rail, road and air transport will not be covered by the directive.
Transferring the operational risk. Based on European case law, the Commission has clarified the definition of the contracts in question, referring to the idea of substantial operational risk. A contract gives the right to carry out work and supply services and always includes the transfer to the contract-holder of the economic risk, including the fact that the contract-holder may lose money as a result of the cost of carrying out the contract. In the European Court of Justice Eurawasser ruling (Case C-206/08) in September 2009, the Court ruled that the payment of contract-holders by third parties is sufficient for a contract to be the type of contract covered by the new directive as long as the contract-holder bears a significant proportion of the operational risks. (M.B./transl.fl)