Brussels, 31/08/2007 (Agence Europe) - At the end of 2005, the European Commission had taken stock of the political options open to it following the results of the consultation on the Green Paper on Public-Private Partnerships (PPP) (see EUROPE 9077). It recommended a legislative initiative for concessions, a specific form of PPP, and announced an interpretative communication on the so-called “institutionalised” PPPs (see EUROPE 9472). Currently carrying out an impact assessment study to determine how appropriate it would be to have a directive on concessions, t he Commission sketched out several avenues for reflection on this subject in a document that it circulated end June with the consultative committee on public procurement, a copy of which has been obtained by EUROPE. Questions raised by member states mainly concern the definition of concessions, their aim, award procedure, changes made, the question of subcontracting, thresholds beyond which new European rules would apply, and the applicability of these rules to concessions granted in the special sectors of water, energy, transport and postal services (Directive 2004/17/EC).
A concession is a form of PPP which differs from the traditional public contract in so far as the economic operator designated as concessionaire by a contract awarding authority bears part of the operational or financial risks inherent to the concession and is totally or partially remunerated through exploitation of the concession. It may refer either to works (eg.: construction or exploitation of toll bridge or tunnel) or to services (eg.: setting up and exploitation of a public transport network or of waste collection system). Some provisions of Directive 2007/18/EC governing the traditional public contracts specifically concern public works contracts. They mainly concern: publication of the information notice announcing the awarding authority's wish to use a concession, the attribution of complementary work and the contracts signed by concessionaires. Service concessions, on the other hand, do not comply with the principles set out in the European treaty.
In its document, the Commission raises the question of the need to specify the current definition of a concession, especially when it comes to exploitation of risks and rights. Works and services concessions do not follow the same rules, so it is “necessary to reflect on whether or not this difference in legal regime needs to be maintained”. Should, therefore, a possible directive comprise different rules for the two kinds of concessions on thresholds, award procedures, duration and concessionaires' obligations? Must the methodology used to calculate the value of a concession be identical to that used for public markets? Could other elements be taken into account such as an estimation of risks and rates of return on investment? When it comes to attribution procedures, the provisions of Directive 2004/18/EC on the choice of procedure do not apply to works concessions. The Commission asks member states about the need to define a new procedure specific to the awarding of concessions. It would also like to gather their experience on “competitive dialogue”, an award procedure introduced into European legislation in 2004 and which authorises an awarding authority to hold dialogue with several candidates before the contract awarding stage with a view to developing solutions that meet the needs.
Contracts relating to concessions are generally long term due to the major investment that they imply and the time necessary for costs to be amortized. In a concern not to hamper competition, however, the Commission considers it necessary to reflect on the need for rules to limit the maximum duration of concessions, rather than just impose a time limit, so that they do not limit competition beyond what is necessary to allow concessionaires to recover the investments and make a profit. Another key element to be discussed is that of subcontracting, i.e. contracts awarded by concessionaires to third parties. The situation may differ depending on the nature of the concession. Directive 2004/18/EC authorises the awarding powers to call on the future concessionaire to subcontract at least 30% of the value of the work - whereas for the service concessions, a public entity sometimes finds it is in its interest to restrict subcontracting within the framework of a concession so as to maintain sufficient control on the concessionaire tasked with public service provision. Finally, member states are invited to give their point of view on the impact of the “substantial changes” of the concession's object on the validity of the contract. According to European legislation, these major changes are equivalent to awarding a new concession and require a new awarding procedure to be launched. During the consultation on the Green Paper, some operators felt that relaunching the procedure for awarding a concession depends in fact on the nature and the extent of the changes. The need for retendering or renegotiating concessions would be much lessened if the concession contract included various clauses or mechanisms to deal with future and unknown eventualities. (mb)