Case C‑388/12

Comune di Ancona

v

Regione Marche

(Request for a preliminary ruling from the Tribunale amministrativo regionale per le Marche)

‛Structural Funds — European Regional Development Fund (ERDF) — Financial contribution from a Structural Fund — Criteria for the eligibility of expenditure — Regulation (EC) No 1260/1999 — Article 30(4) — Principle of durability of the operation — ‘Substantial modification’ of an operation — Award of a concession contract without advertisement or a competitive tendering procedure’

Summary — Judgment of the Court (Fourth Chamber), 14 November 2013

Economic, social and territorial cohesion — Structural assistance — Financing by the European Union — Regulation No 1260/1999 — Financial contribution from the Funds — Eligibility of expenditure — Conditions — Durability of the operation — Lack of substantial modification — Concept of substantial modification — Use of works for activities other than those envisaged in the project submitted for funding — Included — Conditions

Economic, social and territorial cohesion — Structural assistance — Financing by the European Union — Regulation No 1260/1999 — Financial contribution from the Funds — Eligibility of expenditure — Conditions — Durability of the operation — Scope — Lack of substantial modifications within the period of five years from the decision of the national authorities or the managing authority on the contribution of the Funds

Article 30(4) of Regulation No 1260/1999 laying down general provisions on the Structural Funds must be interpreted as meaning that the modifications referred to in that provision include not only those that take place during the performance of a project but also those that take place afterwards, in particular in the course of the project’s management, provided that those modifications take place within the five-year period specified in that provision. The Structural Funds pursue objectives that cannot be achieved unless the grants made by those funds and the related controls cover not only the measures and expenditure connected with the carrying out of an operation, but also the measures and expenditure connected with the procedures for the operation’s implementation and management, within the five-year period specified in Article 30(4) of Regulation No 1260/1999. That is the only way of ensuring that action under the funds is efficient, by preventing them from being used to fund projects which, once carried out, undergo a modification to their management, as a result of which they no longer contribute to the objectives for which the funding was granted. (see paras 28, 29, operative part 1)

The existence of an undue advantage is one of the factors which potentially constitute a substantial modification for the purposes of Article 30(4) of Regulation No 1260/1999 laying down general provisions on the Structural Funds. Accordingly, before making a finding as to the existence or not, in the circumstances of the case before it, of a substantial modification for the purposes of that provision, the referring court must, in particular, determine whether the contested modification has given rise to an undue advantage and/or whether it has affected the nature or implementation conditions of the operation. Therefore, that provision must be interpreted as meaning that in order to undertake an assessment as to whether the grant of the concession generates substantial revenue for the contracting authority or undue advantage for the concessionaire, it is not first necessary to establish whether the works under concession have undergone a substantial modification. (see paras 31-33, operative part 2)

Article 30(4) of Regulation No 1260/1999 laying down general provisions on the Structural Funds must be interpreted as referring both to physical modifications — where the works carried out are not as specified in the project approved for funding — and to modifications affecting function, it being understood that, in the case of a modification consisting in the use of works for activities other than those originally envisaged in the project submitted for funding, such a modification must be capable of significantly reducing the capacity of the operation in question to attain its designated objective. In the light of the second condition laid down in point (b) of the first subparagraph of Article 30(4) of that regulation, it must also be pointed out that, for it to be possible to classify the modification consisting in the use of the works for activities other than those envisaged in the project submitted for funding as a ‘substantial modification’ for the purposes of Article 30(4) of that regulation, that modification must have been brought about as a result of the — at least partial — cessation of some of the activities envisaged in the project submitted for funding. (see paras 41, 42, operative part 3)