Luxembourg, 22/01/2007 (Agence Europe) - In its judgement C-220/5, the Court of Justice of the European Communities ruled that, when engaging a semi-public development company, the municipality of Roanne (France) should have sent out a call for tenders in line with Community law on competition when public works contracts are at stake. The municipal services directorate in Roanne had sealed an agreement with a semi-public company for the redevelopment of a leisure centre. The project was not subject to a call for competition as was the requirement set out in French legislation on public works at the time. The Court judgement therefore implies that the French legislation should be amended, although the necessary changes have already largely been made.
The municipality of Roanne had engaged the Société d'équipement du department de la Loire (SEDL) to construct a leisure centre in the area around the railway station in 2002. After this, several members of the municipal council headed by the former mayor, Jean Arnoux, called on the Tribunal administratif de Lyon to annul the municipal court's resolution resulting in SEDL's engagement, as they took the view that the agreement should have been made subject to advertising and a call for tenders, as is the case for any public works contract under Council Directive 93/37/EEC concerning the coordination of procedures for the awarding of public works contracts. The Tribunal administratif de Lyon asked the Court of Justice of the European Communities about the status of the engagement of SEDL and, according to a Court press release dated 18 January, the Court held that “the agreement must be classified as a public works contract within the meaning of the directive”..
Several arguments put forward were rejected, including those pointing out that: - most of the work carried out was intended for the private sector market; - execution of the work by SEDL (not including work that was sub-contracted) did not exceed the threshold beyond which the directive should apply; - and the municipal council was dispensed from the usual contract-awarding procedures under national legislation. The Court ruled that none of the above arguments had grounds to justify them.
The directorate general for services of the town of Roanne had not yet had the possibility to examine the ruling at the time of going to press, but a representative of its lawyers, Xavier Cadoz, from Philippe Petit in Lyons, explained to EUROPE that the situation is specific to the public works market in France, which is characterised by “public power prerogatives”. In 2002, the constitution of semi-public companies throughout the country meant that the authorities were forced to engage them for all public works contracts under the “Code de l'urbanisme”.
Mr Cadoz went on to say, however, that this situation has now largely been regularised by a new law that came out in July 2005, authorising private service providers to tender offers for public works in competition with semi-public companies, which implies deliberation on the part of contract-awarding powers, an approach that is in line with Community competition law for public procurement.
Although French legislation has already begun to adjust, this affair marks a turning point in relations between the Community law and French public procurement. As Louis Pralus wrote in the regional daily, “L'Essor”, one day before the ruling: “This is the first time that the European Court will have to enact on an affair of this kind. Its decision could therefore make case-law. It is current practice to make this kind of agreement”.
The decision came as no surprise to anyone in fact. Mr Cadoz stressed that the Tribunal de Lyon “did not really have a choice” other than to come into line. On the other hand, it remains to be seen how the tribunal will interpret the retroactive validity clause provided for in the new French legislation. (cd)