Opinion of Mr Advocate General Alber delivered on 18 March 1999. - RI.SAN. Srl v Comune di Ischia, Italia Lavoro SpA and Ischia Ambiente SpA. - Reference for a preliminary ruling: Tribunale amministrativo regionale della Campania - Italy. - Freedom of establishment - Freedom to provide services - Organisation of urban waste collection service. - Case C-108/98.



European Court reports 1999 Page I-05219



Opinion of the Advocate-General

A - Introduction

1 The present reference for a preliminary ruling concerns the applicability of provisions in the fields of freedom to provide services, freedom of establishment, competition law and of Directive 92/50/EEC relating to the coordination of procedures for the award of public service contracts. (1)

2 The applicant in the main proceedings, RI.SAN. Srl, which brought two actions before the national court for the annulment of the two municipal council resolutions mentioned below, was entrusted with the collection of solid urban waste in the Municipality of Ischia up to 4 January 1997. By municipal council resolution of 7 November 1996, the urban waste removal service was entrusted to Ischia Ambiente SpA - without a public tendering procedure.

3 The company Ischia Ambiente SpA was set up by the Municipality of Ischia and GEPI SpA, a State-owned financing company, (2) on the basis of the municipal council resolution of 6 July 1966.

4 Under Italian law, in order to promote employment, the municipalities are entitled to set up public limited companies with GEPI SpA, inter alia for the purpose of operating local public services. Italian law allows local authorities to select GEPI SpA directly as partner for operating a local public service, without any form of selection procedure or public tendering. GEPI SpA is required to transfer its shareholding in such mixed capital companies within five years by public tender.

5 In that regard, RI.SAN Srl claims that the municipal council resolutions infringe Community law. The referring court considers, therefore, that the present case raises questions on the interpretation of Article 59 et seq. of the EC Treaty and of the provisions of competition law.

B - The facts and the questions referred for a preliminary ruling

6 The first resolution challenged, namely Municipal Council Resolution No 25 of 19 March 1996, concerns the constitution with GEPI SpA of a public limited company, Ischia Ambiente SpA, with a majority public shareholding, for the removal of solid urban waste in the Municipality of Ischia. That resolution also approved the statutes of the company to be formed and the corresponding technical, economic and financial plans. The Municipality of Ischia subscribed 51% and GEPI SpA 49% of the share capital of Ischia Ambiente SpA.

7 In its action for annulment relating to these matters, RI.SAN Srl pleads infringement of several Italian laws and also procedural infringement in the absence of any public procedure for the selection of the co-shareholder.

8 Municipal Council Resolution No 99 of 7 November 1996 entrusted Ischia Ambiente SpA with the removal of solid urban waste in the Municipality of Ischia. In that regard, apart from the infringement of several Italian laws, RI.SAN Srl alleges in particular that the contract for operating the public service was awarded without any tendering procedure either for the selection of the second shareholder of the mixed-capital company or for the award of the contract and that that constitutes - in its opinion - a manifest breach of Community law.

9 Municipal Council Resolution No 25 on the constitution of a mixed-capital public limited company with a mainly public shareholding was expressly adopted on the basis of Article 4(6) of Law No 95 of 29 March 1995. Under that provision, the municipalities and provinces are allowed, in order to promote employment or the re-employment of workers, to set up public limited companies with GEPI SpA inter alia for the purpose of operating local public services. Article 4(8) of that law requires GEPI SpA to transfer its shareholdings in the aforesaid companies within five years by means of a public tendering procedure in accordance with the provisions governing GEPI SpA's activities.

10 According to the explanations given by the national court, the relevant provisions of national law are designed to allow the local authorities to choose directly and without any form of selection procedure GEPI SpA as partner for the operation of local public services, provided that this serves the purpose of promoting the employment or re-employment of workers. In this case that requirement is satisfied, since in all the contested measures it is, inter alia, declared that the objective is to ensure that employment levels in the sector are maintained.

11 For the national court, therefore, that raises the question whether Article 4(6) of Law No 95 is compatible with Community law. The main proceedings involve the `direct selection of a private party - without any competition - for the operation of a local public service in accordance with a special procedure expressly provided for by the national Law on the administrative autonomy of local authorities (legge nationale sur le autonomi locali), Law No 142 of 8 June 1990, Article 22(3)(e), namely the creation of a limited company whose capital is constituted mainly by public funds from the local authority and which will automatically be entrusted with the operation of this public utility'. That therefore rules out any competition, even at the stage of selecting the partner. For the national court those provisions are in direct conflict with the provisions on freedom to provide services and on free competition set out in the EC Treaty.

12 The national court therefore essentially seeks to ascertain whether a presumed breach of the principles of freedom to provide services and effective competition arising from the direct choice of GEPI SpA as partner by the Municipality of Ischia `can be justified by virtue of the derogations provided for and allowed by the Treaty (Articles 55, 66 and 90(2))'. The fact that `in the initial stage of constitution of the mixed management company for operation of the local public utilities, and for the first five years of its existence, normal recourse to non-discriminatory competitive selection procedures for the choice of the operator of the public utility' is excluded could be considered as constituting such a breach. According to the provisions referred to by the national court and to the basic concepts underlying the Treaty, it is as a rule necessary to conduct a public tendering procedure or a restricted public selection procedure in order to guarantee effective competition and transparency in the selection of the partner. Since no such procedure was conducted, (3) it must be determined whether the action taken by the municipality was `justified'.

13 For the national court, therefore, the issue is not the applicability of Directive 92/50 but the general applicability of Articles 55, 60 and 90(2) of the EC Treaty. The national court moreover regards the Directive as not applicable, since the services in question are not provided to a contracting authority for consideration on the basis of a contract for pecuniary interest.

14 The Tribunale Amministrativo Regionale della Campania (Naples) therefore referred the following questions to the Court for a preliminary ruling:

`(1) Must Article 55 of the Treaty (which is applicable inter alia to the services sector by virtue of the reference in Article 66 of the Treaty), pursuant to which "[t]he provisions of this Chapter shall not apply, so far as any given Member State is concerned, to activities which in that State are connected, even occasionally, with the exercise of official authority", must be interpreted so widely as to include the activities of GEPI SpA (later Itainvest SpA) as a participant in local authorities' mixed companies for the operation of local public utilities, within the meaning of 4(6) of Law No 95 of 29 March 1995 (converting into a statute, with amendments, Decree-law No 26 of 31 January 1995), even where that participation purports to be for the purpose of "promoting employment or the reemployment of workers" already assigned to the service the management of which is at issue, having regard to Article 5 of Law No 184 of 22 March 1971 establishing GEPI SpA, which gives GEPI SpA the same task of "contributing to the maintenance and growth of employment levels facing temporary difficulties, such as to demonstrate the specific possibility of reorganising the undertakings concerned", in the manner set out therein?

(2) In view of the abovementioned legislation governing GEPI SpA (later Itainvest SpA), may there be applicable to this case the derogation provided for in Article 90(2) of the Treaty according to which "[u]ndertakings entrusted with the operation of services of general economic interest ... shall be subject to the rules contained in this Treaty, in particular to the rules on competition, in so far as the application of those rules does not obstruct the performance in law or in fact, of the particular tasks assigned to them"?'

C - The relevant legislation

Community law

15 Directive 92/50, which finds its legal basis in Article 57(2), last sentence, and Article 66 of the EC Treaty, contains the provisions concerning the procedure for awarding public service contracts. It defines, inter alia, the terms `public service contract' and `contracting authority'. Contracting authorities are required to award contracts which have as their object the services listed in Annex IA and IB of the directive in accordance with the provisions of the directive, and thus inter alia by way of public tendering procedure. To that end the various award procedures are also laid down in the directive.

16 Article 1 of the Directive defines the scope of application as follows:

`For the purposes of this Directive:

(a) public service contracts shall mean contracts for pecuniary interest concluded in writing between a service provider and a contracting authority, ...

(b) contracting authorities shall mean the State, regional or local authorities, bodies governed by public law, associations formed by one or more of such authorities or bodies governed by public law.

Body governed by public law means any body:

- established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character, and

- having legal personality and

- financed, for the most part, by the State, or regional or local authorities, or other bodies governed by public law; or subject to management supervision by those bodies; or having an administrative, managerial or supervisory board, more than half of whose members are appointed by the State, regional or local authorities or by other bodies governed by public law.

...'

17 Article 6 of Directive 92/50 provides for the following derogation:

`This Directive shall not apply to public service contracts awarded to an entity which is itself a contracting authority within the meaning of Article 1 (b) on the basis of an exclusive right which it enjoys pursuant to a published law, regulation or administrative provision which is compatible with the Treaty.'

National law

18 GEPI SpA was constituted on the basis of Article 5 of Law No 184/71 of 22 March 1971. (4) GEPI SpA was established with the express purpose of maintaining and increasing employment levels.

19 Article 22(3)(a) to (e) of Law No 142/90 of 8 June 1990 (5) on local autonomy provides that municipalities and provinces may operate the public service undertakings which fall within their spheres of competence in different ways. So far as is relevant to the present case, this can be done by direct management (a), by award of a concession to third parties (b), or by means of a public limited company (e) the share capital of which is constituted mainly by public funds and, where necessary, with public or private partners. The decisive factors in this respect are the appropriateness of the procedure and the nature of the services to be provided.

20 Article 4(6) of Law No 95/95 of 29 March 1995 concerning mixed capital companies of a public-service nature (6) allows the municipalities and provinces to set up public limited companies directly with GEPI SpA inter alia for the purpose of operating local public services, with a view to promoting employment and re-employment of workers. Article 4(8) requires GEPI SpA to transfer its shareholdings in such companies within five years by means of a public tendering procedure.

D - Arguments of the parties

21 RI.SAN Srl takes the view that Directive 92/50 is applicable in this case. As its structure as a limited company governed by private law shows, Ischia Ambiente SpA is not a contracting authority and consequently the directive applies. Article 6 precludes application of the directive only in the specific case where a public service contract is awarded to an entity which is itself a contracting authority and is not, therefore, active commercially. Nor - so RI.SAN Srl claims - is there an award of a concession in this case. As Ischia Ambiente SpA is also not part of the public administration, the services provided are not so-called in-house services, namely services performed by way of direct management. It follows that the contract for the removal of solid urban waste in the Municipality of Ischia should have been awarded by public tender in compliance with Directive 92/50.

22 GEPI SpA and Ischia Ambiente SpA take the view that the primary-law provisions of the Treaty do not apply in this case since a purely domestic (Italian) situation is concerned. As regards Directive 92/50, both of those companies claim that the task entrusted to Ischia Ambiente SpA, namely the removal of solid urban waste in the Municipality of Ischia, constitutes an in-house service. Both GEPI SpA and Ischia Ambiente SpA form an integral part of the administration and the discharge of the task was simply the subject of internal delegation between organs. Directive 92/50, however, applies only to contracts awarded to third parties which are not part of the administration. In the case of GEPI SpA, moreover, there is an award of a concession, which also falls outside the scope of Directive 92/50, since that directive applies only to services provided under public service contracts. Were Directive 92/50 nevertheless to apply, the derogation allowed under Article 6 would be relevant since both GEPI SpA and Ischia Ambiente SpA are contracting authorities. As a result, this case falls outside the scope of the Directive. The majority - at least - of both companies' share-capital was paid up with public funds and over half the members of the Board of Directors of Ischia Ambiente SpA represent the Municipality: therefore, all the parties concerned are contracting authorities.

23 The Municipality of Ischia first queries the relevance to the decision in the main proceedings of the questions referred for a preliminary ruling. Since the Municipality is the majority shareholder of Ischia Ambiente SpA and GEPI SpA is part of the public administration, Community law does not apply. In the event of infringement of the provisions of Directive 92/50, `Article 55 of the EC treaty would apply'. In any event, what it concerned in this case was in-house services of the local authority undertaken in the public interest. Furthermore, the objectives pursued justify the procedure adopted. The procedure chosen enables the local authorities to cope with economic and financial difficulties, thereby securing the supply of public services to their citizens. Moreover, such a procedure maintains existing jobs and can even create new jobs. The fact that the urban waste removal service was entrusted to Ischia Ambiente SpA for a limited period of five years also shows that the Italian legislation is not incompatible with Community law.

24 The Italian Government, too, maintains that the provisions of the Treaty do not apply in this case since a purely domestic situation is concerned. Moreover, both GEPI SpA and Ischia Ambiente SpA are part of the public administration and are not undertakings pursuing economic activities. The situation in point does not fall within the scope of the provisions on freedom to provide services or freedom of establishment. Since those companies do not compete in operating the waste removal service, there cannot be any breach of the competition provision of the Treaty in this respect. The fact that this case involves in-house services precludes the applicability of Directive 92/50. Ischia Ambiente SpA is, as a part of the public administration. There is thus no contract for the provision of services for pecuniary interest.

25 The Commission also maintains that the context is purely domestic and that, therefore, the provisions of the Treaty cited by the national court do not apply here. As regards the applicability of Directive 92/50, the Commission submits that this case concerns either a concession or in-house services. In view of the explanations provided by the national court, the Commission believes either hypothesis is possible, but the facts cannot be precisely classified on the basis of the individual indications provided. If either of these hypotheses were true, Directive 92/50 would not apply to the facts at issue in the main proceedings. The Commission is not in a position to provide a definitive answer in absence of more complete information. For want of that information, the Commission thinks that it is also possible that the task of removing urban waste in the Municipality of Ischia was entrusted to Ischia Ambiente SpA on the basis of an agreement or public contract for pecuniary interest. In that case, Directive 92/50 would in principle apply. However, the information provided by the national court is in this respect also too scant for the Commission to answer that question definitively. It is therefore for the national court itself to determine whether Directive 92/50 applies in the light of the provisions of that directive and the criteria developed by the case-law of the Court.

26 Where necessary, I shall come back in the course of the following analysis to the other arguments put forward by the parties in their written pleadings or at the hearing.

C - Analysis

The first question

27 By its first question the referring court wishes to establish whether the activity of GEPI SpA falls within the scope of Article 55 of the EC Treaty, read in conjunction with Article 66 according to which the rules concerning freedom to provide services do not apply to activities which in a Member State are connected, even occasionally, with the exercise of official authority.

28 Although - as may be seen from the order for reference - that question ultimately seeks to establish whether or not an open tendering procedure for the selection of the partner, in this case GEPI SpA, would have been required under the general principles laid down in the Treaty, it would seem appropriate to ascertain first whether, in accordance with Articles 55 and 66 of the EC Treaty, the rules concerning freedom to provide services and freedom of establishment apply at all in this case. Whether or not this is a general obligation to initiate a public tendering procedure is a question which can be left aside for the time being.

29 GEPI SpA set up a company with the Municipality of Ischia for the management of a local public service. In that regard, however, the Commission correctly suggests that as a result the rules applicable under the Treaty are not the rules governing the services sector but rather those concerning freedom of establishment.

30 According to case-law of the Court, the provisions of the chapter on services are subordinate to those of the chapter on the right of establishment. (7)

31 Services within the meaning of Article 60 of the EC Treaty are characterised by their temporary nature. That criterion is met where a service is provided only occasionally (8) or for a limited duration. (9) Moreover, for the rules on freedom of services to apply, there must be a transfrontier element. That is the case where the person providing the service goes to the Member State where the person for whom it is provided is established, (10) or vice versa, (11) or where the service is provided for remuneration. (12)

32 Freedom of establishment is characterised by a longer duration of the service provided: the frequency, regularity and continuity of the service are further criteria distinguishing freedom of establishment from the freedom to provide services.

33 Managing a local public service is an activity of long duration. Such activity is exercised continuously at set intervals. In view of its importance, that activity must be carried out on a regular basis. The proper performance of the service in question requires more than the merely occasional removal of urban waste.

34 As the service provider must be on the spot and the service must be repeated frequently, the rules concerning freedom of establishment must be taken into consideration in appraising the facts at issue here.

35 The scope of the right to establishment ratione personae must also be taken into account in this case since, in accordance with Article 58 of the EC Treaty, companies are also entitled to that right.

36 For the rules on freedom of establishment to apply, there must, however, also be some element relevant to Community law. That is the case only if the factual context involves a transfrontier element, namely if the freedom of movement of a company of another Member State is restricted.

37 However, there is no such transfrontier element here: GEPI SpA and RI.SAN Srl are both Italian companies established in Italy. The same is true of Ischia Ambiente SpA. The only other party involved is the Italian Municipality of Ischia. Therefore, the transfrontier element is lacking in this case.

38 In the result, in view of this purely domestic context, the Community rules on freedom of establishment do not apply and there is, therefore, no need to examine whether the derogation provided for in Article 55 of the EC Treaty is relevant. Nor is it necessary to consider the question raised implicitly by the national court whether, by virtue of the principles underlying the Treaty, there is a general obligation to initiate public tendering procedures - which, moreover, is not evident. Whether a specific obligation to initiate a procedure is a matter which will fail to be addressed is only in the context of the applicability of Directive 92/50.

The second question

39 By its second question, the national court wishes to know whether Article 90(2) of the Treaty applies to the activities of GEPI SpA.

40 Article 90(1) of the EC Treaty requires Member States, with regard to public undertakings, inter alia neither to enact nor maintain in force any measure contrary to the rules contained in the EC Treaty. By virtue of Article 90(2), undertakings entrusted with the operation of services of general economic interest are subject to the rules contained in the Treaty, in particular to the rules on competition, in so far as the application of such rules does not obstruct the performance, in law or in fact, of the particular tasks assigned to them.

41 The Italian Government, the Commission and GEPI SpA maintain that, in view of the purely domestic factual context, Article 90 of the EC Treaty does not apply either. The Commission argues, moreover, that the undertakings to which the restriction set out in Article 90(2) applies must be undertakings within the meaning of Article 90(1). However, GEPI SpA is not, it maintains, such an undertaking.

42 By virtue of its wording, Article 90(2) of the EC Treaty covers both public and private undertakings. However, Article 90(2) by no means applies only to undertakings within the meaning of Article 90(1) of the Treaty, (13) so that there is no need to determine whether or not GEPI SpA is an undertaking within the meaning of Article 90(1).

43 GEPI SpA must, however, be an undertaking within the meaning of Article 90(2) of the Treaty. To qualify as such, GEPI SpA must be `entrusted with the operation of services of general economic interest'. The concept of services within the meaning of Article 90(2) differs from that within the meaning of Article 60. For the purposes of Article 90(2) of the Treaty, services encompass services of all kinds. That includes the making available, providing and distribution of services in kind and covers, in particular, the provision of services for the public. At this point already, it is clear that the activities of GEPI SpA cannot attract the application of Article 90(2). GEPI SpA was constituted with the objectives to establishing and increasing employment. However, GEPI SpA does not, unlike Ischia Ambiente SpA, offer any services in the form, for example, of itself being active in the context of services for the public. It is purely a state-owned financing company participating in companies together with the public authorities. That does not qualify as a supply of services for the purposes of Article 90(2) of the Treaty since the financing of and participating in companies are not public services. The fact that the companies of which GEPI SpA is a joint founder might well provide services within the meaning of Article 90(2) of the Treaty is irrelevant here since only the activities of GEPI SpA are material and these, specifically, do not consist in providing services.

44 Contrary to the view, set out above, put forward by the Italian Government, the Commission and GEPI SpA, the application of the provisions of Article 90 of the Treaty is not precluded merely because a purely domestic situation is in point. Both Article 90(1) and Article 90(2) refer to all provisions of the Treaty. These include the rules on freedom of establishment but these rules, here, as I have shown above, do not, in fact apply on account of the domestic context. That non-applicability clearly extends also to the sphere of Article 90 of the Treaty. If, however, as an undertaking entrusted with the operation of services, GEPI SpA were to fall within the scope of Article 90(2) of the Treaty, the other rules contained in the Treaty would also have to be taken into account. The rules on competition are particularly significant in the context of Article 90(2): those rules can apply to situations which are to begin with purely domestic if adverse effects on the common market are possible. Consequently, it is not possible to refuse to regard Article 90(2) of the Treaty as applicable merely on the ground that a purely domestic situation is concerned.

45 In the final analysis, however, Article 90(2) of the EC Treaty does not apply in this case since GEPI SpA is not an undertaking entrusted with the operation of services within the meaning of that provision.

The applicability of Directive 92/50

46 Although in the questions referred for a preliminary ruling the national court has not asked this Court to take a view on the applicability of Directive 92/50, that point must be examined in the interests of a thorough analysis of the facts at issue. The applicability of the directive must be examined, in particular, in order to provide the national court with all the necessary material for resolving the dispute, especially since the national court proceeds on the assumption that free competition is impeded and that Directive 92/50 is designed to eliminate practices restricting competition. (14)

47 In its order for reference the national court takes the view, relying on the eighth recital of the directive, (15) that the directive does not apply since the court does not regard assignment of the task of waste removal to Ischia Ambiente SpA as a public-service contract within the meaning of the directive, but rather as the grant of a concession falling outside the scope of the directive.

48 Unlike RI.SAN Srl, GEPI SpA, Ischia Ambiente SpA and the Italian Government also argue that Directive 92/50 does not apply, but the Commission does not wish to express a definitive opinion in that regard in view of the - in its opinion - insufficient information available.

49 Directive 92/50 only applies if the legal relationship between the Municipality of Ischia and Ischia Ambiente SpA is based on a public-service contract within the meaning of Article 1(a) of the Directive. In accordance with the eighth recital, the Directive does not apply to the provision of services which is not based on contracts. The directive does not cover concessions. (16) Even in-house services provided by part of the public administration fall outside the scope of Directive 92/50 if only because there is no a public contract in the sense that a third party is entrusted with providing the service.

50 There is no uniform definition of a concession under Community law; however, for there to be a concession, a number of factors must be present. (17) Thus the recipient of the services to be provided must be third, non-contracting, parties. The service to be provided must, moreover, correspond to a task in the general interest, a task as a rule incumbent on a public authority. The remuneration of the concessionaire must be commensurate with the services provided and, lastly, the concessionaire must bear the economic risk connected with the performance of the service.

51 Whether or not there is in this case a concession for the purposes of Community law is a matter for the national court to decide. However, it seems clear that the beneficiaries of the waste disposal service are the residents of the municipality, namely persons who are not parties to the contract. Moreover, it can be said that the necessary general interest in the removal of urban waste also does exist. The regular removal of urban waste is necessary if only on grounds of public health and safety. For this reason, the public authority must either discharge this task itself or have it performed in a manner which enables it to retain a decisive influence. (18) In Italy, according to the written observations of the Italian Government, that task is assigned to the municipalities in implementation of Directive 75/442/EEC. (19) How the remuneration arrangements are governed and the economic risk is shared between the Municipality of Ischia and Ischia Ambiente SpA cannot be conclusively determined on the basis of the information supplied by the national court. It is therefore for the national court to establish whether the various requirements for there to be a grant of a concession are satisfied, in which case Directive 92/50 would not apply.

52 Whether the Municipality and Ischia Ambiente SpA are part of the same public administration - and whether an in-house service is therefore involved - must be established by examining the facts. Contrary to RI.SAN Srl's contention, the fact that Ischia Ambiente SpA is a public limited company does not per se preclude it from being part of the public administration. Ischia Ambiente SpA must instead be classified following functional criteria. (20) In that regard, the degree of influence exerted by the public administration over the company is decisive.

53 The final appreciation of that aspect falls once again to the national court. It is clear from the explanations it has supplied that the Municipality of Ischia holds 51% of the share capital of Ischia Ambiente SpA. The remaining 49% is held by GEPI SpA for a period of five years. GEPI SpA is in its turn wholly owned by the Italian State and acts as a finance company for the purpose, inter alia, of setting up companies with municipalities with a view to performing the tasks incumbent on the latter. GEPI SpA must also be classified by means of a functional appraisal. Even without a full knowledge of the internal organisation of GEPI SpA, it may properly be concluded from the fact that the Italian State holds 100% of its share capital that the company is part of the Italian State in that respect. The Italian State, therefore, through GEPI SpA, has a holding in Ischia Ambiente SpA. It follows that Ischia Ambiente SpA is controlled by public authorities. It would be unduly formalistic to seek to distinguish between the public authorities `Municipality of Ischia' and `Italian State'. In the result, the situation differs in no respect from that which would exist if the Italian State had directly provided the Municipality of Ischia with the funds required to form the company on its own. In the final analysis, the fact that the Municipality of Ischia chose that particular, organisational structure cannot lead to any other classification of Ischia Ambiente SpA.

54 However, in addition to financial interconnections, a delegation of tasks between the public bodies is necessary for it to be possible to say that there is a service `in-house'. In that respect, depending on the circumstances, it might be necessary that the Municipality should control Ischia Ambiente SpA's further activity, for example, by making available further municipal funding and perhaps by setting tariffs for the disposal of urban waste. However, the explanations provided by the national court do not show with absolute certainty whether or not such an allocation of tasks exists. But if the national court were to establish that both the financial and organisational interconnections between the Municipality and Ischia Ambiente SpA correspond to those requirements, then the services would indeed qualify as in-house services and Directive 92/50 would not apply in this case either.

55 Applicability of the directive would come into question, if at all, only if Ischia Ambiente SpA were not part of the public administration, or if the services provided were not in-house services or if there were not a concession within the meaning of Community law. In that case, the directive would become applicable since the Municipality of Ischia, as a local authority, would be a contracting authority within the meaning of Article 1(b) of Directive 92/50. There could also be a contract within the meaning of Article 1(a) of the directive if there were an exchange of services between two distinct legal entities. However, it would have to be a contract for pecuniary interest concluded in writing, (21) which is not the case according to the indications contained in the order of reference.

56 GEPI SpA and the Italian Government argue, moreover, that even if Directive 92/50 were applicable, the derogation provided in Article 6 of the directive would apply.

57 However, the derogating provision in Article 6 of the directive, quoted in paragraph 17 above, would be applicable only under certain conditions. Ischia Ambiente SpA would indeed be a contracting authority within the meaning of Article 1(b) of the directive. The three conditions specified in Article 1(b) of the directive, which must be satisfied concurrently, are fulfilled by (22) Ischia Ambiente SpA. (23) Nevertheless, the public contract should - as expressly required by Article 6 - have been awarded to Ischia Ambiente SpA on the basis of an exclusive right enjoyed by it. Whether or not Ischia Ambiente SpA has such an exclusive right cannot be established from the indications provided in the order for reference. On this matter too the final determination must be made by the national court.

58 To summarise, it may thus be said, that what could be on the basis of the facts in the main proceedings, concerned is either an award of a concession or an `in-house' delegation of tasks. It is ultimately the task of the national court to determine, in the light of the relevant legislation and the criteria laid down by the case-law of the Court, whether one of these situations is concerned. As regards the derogation contained in Article 6 of Directive 92/50, it is also for the national court to establish whether the conditions set out in that article are satisfied.

F - Conclusion

59 In view of the foregoing, I propose that the Court answer the questions referred by the Tribunale Amministrativo Regionale della Campania, Naples, as follows:

(1) Article 52 et seq. (or, as the case may be, Article 59 et seq.) of the EC Treaty do not apply to purely domestic situations which lack any specific Community connection where, as in the case at issue, the legality of a provision of national law - pursuant to which municipalities are authorised, freely and without a public tendering procedure, to choose a particular and specifically-named company as partner for constituting a joint undertaking - is challenged before a national court by another undertaking established in the same Member State.

(2) Article 90(2) of the EC Treaty - and, consequently, the provisions of the Treaty and, in particular the rules on competition - are not applicable to an undertaking such as GEPI SpA which was constituted for the sole purpose of forming companies with the municipalities, since that undertaking does not provide services within the meaning of Article 90(2) of the EC Treaty.

(1) - Council Directive 92/50/EEC of 18 June 1992 relating to the coordination of procedures for the award of public service contracts (OJ 1992 L 209, p. 1).

(2) - GEPI SpA later became Itainvest SpA and then Italialavoro SpA: for the purposes of this Opinion, the company will nevertheless be referred to as GEPI SpA.

(3) - Moreover, Italian law generally also requires such competitive procedures. However, Article 4(6) of Law No 95 deviates from that rule.

(4) - Law No 184/71 of 22 March 1971 (GURI No 105 of 28 April 1971).

(5) - Law No 142/90 of 8 June 1990 (GURI No 105 of 28 April 1971).

(6) - Law No 95/95 of 29 March 1995 (GURI No 77 of 1 April 1995) amending Decree Law No 26/95 of 31 January 1995 (GURI No 26 of 31 January 1995).

(7) - Case C-55/94 Gebhard v Consiglio dell'Ordine degli Avvocati e Procuratori di Milano [1995] ECR I-4165, at paragraph 22.

(8) - Case 252/83 Commission v Denmark [1986] ECR 3713.

(9) - Case C-180/89 Commission v Italy `Tourist guides' [1991] ECR I-709.

(10) - Case 33/74 Van Binsbergen [1974] ECR 1299, paragraphs 10 to 12.

(11) - Joined Cases 286/82 and 26/83 Luisi and Carbone [1984] ECR 377, paragraph 10.

(12) - Case 352/85 Bond van Adverteers v Netherlands [1988] ECR 2085, paragraph 15.

(13) - Case 52/76 Benedetti v Munari [1977] ECR 163, at paragraphs 20 to 22.

(14) - See the 20th recital of Directive 92/50.

(15) - The eighth recital reads: `whereas the provision of services is covered by this Directive only in so far as it is based on contracts; whereas the provision of services on other bases, such as law or regulations, or employment contracts, is not covered'.

(16) - See in this respect the Opinion of Advocate General La Pergola in Case C-360/96 Gemeente Arnhem and Gemeente Rheden v BFI Holding [1998] ECR I-6821, at paragraph 26.

(17) - See the Opinion of Advocate General La Pergola in Case C-360/96 (cited in footnote 16) at paragraph 26.

(18) - See the judgment in Case C-360/96 (cited in footnote 16), at paragraph 52.

(19) - Council Directive 75/442/EEC of 15 July 1975 on waste (OJ 1975 L 194, p. 47).

(20) - To ensure a more equitable appraisal of the facts and specificities of each case, the Court has favoured a functional rather than a formal method of analysis. The Court has followed such a method with regard to the notion of `contracting party' since its judgment in Case 31/87 (Beentjes v Netherlands [1988] ECR 4635).

(21) - See Article 1(a) of Directive 92/50.

(22) - The Court ruled to that effect in Case C-44/96 (Mannesmann Anlagebau Austria and Others v Strohal Rotationsdruck [1998] ECR I-73, at paragraphs 20 and 21) with regard to a `body governed by public law' within the meaning of Article 1(b) of Council Directive 93/37/EEC of 14 June 1993 concerning the coordination of procedures for the award of public works contracts (OJ 1993 L 199, p. 54), which has the same wording as Article 1(b) of Directive 92/50.

(23) - Those conditions are as follows:

Body governed by public law means any body

- established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character, and

- having legal personality and

- financed, for the most part, by the State, or regional or local authorities, or other bodies governed by public law; or subject to management supervision by those bodies; or having an administrative, managerial or supervisory board, more than half of whose members are appointed by the State, regional or local authorities or by other bodies governed by public law.