WRITTEN QUESTION P-0348/03

by Roberta Angelilli (UEN) to the Commission

(6 February 2003)

Subject: Formation of a joint stock holding company for the City of Rome: possible conflict between public and corporate interests

The recent proposal for a Rome City Council decision concerning the possibility of forming a holding company that would take over all the holdings in the 83 companies which that council currently controls gives rise to many doubts regarding the activities carried on by such companies and their legitimacy in respect of Community laws on public service contracts.

The companies in question provide, inter alia, services of general interest such as urban and extra-urban transport, refuse collection and disposal and water supply. The aim of the holding company being formed should be to strategically coordinate and rationalise the activities of the companies it controls.

In reality, an examination of the company's statutes shows that its object is not only defined in general and very vague and all-embracing terms, but also involves carrying out services for the City of Rome which, owing to the aforesaid general nature of the company's object, could include public services. Such services would therefore be awarded to the company on the basis of a clause in the company's statutes and not via the call for tenders required by the Community rules governing this area (Directive 92/50/EEC(1) on supply contracts and Directive 97/52/EC(2) on service contracts).

Furthermore, the transfer to a joint stock company of the supervisory powers previously exercised by the City Council calls (as has been established by the Court of Justice, not least in cases C 126/01 and C 280/00) for greater caution to be shown with regard to principles such as equality of treatment and the continuity of services, since the intention is to transfer responsibilities from a public-law body whose purpose is to safeguard these principles, and which therefore enjoys a privileged position, to a legal entity governed by private law whose purpose is to manage its shareholders' assets, and which would enjoy a privileged position with no particular guarantees for the market.

In view of this and since the formation of this company occasions further doubts, which will be addressed in two subsequent questions entitled Suspected breach of competition rules and Doubts regarding compliance with public service rules:

1. does the Commission not consider that the proposal described above contravenes the above-mentioned rules on public contracts;

2. what is its opinion on the situation described above, and in particular on the juxtaposition of the company's private sector status and its public service objectives?

(1) OJ L 209, 24.7.1992, p. 1.

(2) OJ L 328, 28.11.1997, p. 1.

Answer given by Mr Bolkestein on behalf of the Commission

(11 March 2003)

The Commission would first of all like to inform the Honourable Member that it knows there are certain problems with Italian legislation in the field of local public services which is incompatible with Community law on public procurement and concessions. This legislation is currently the subject of an infringement procedure under which the Commission recently sent a supplementary letter of formal notice to the Italian government.

With regard to the specific problem of the creation of a holding company to which a contracting authority would transfer its holdings in the companies it controls, the Commission feels that whilst the management of these holdings by a holding company controlled by this contracting authority could influence the quality of the relationship between these holdings and the latter, this is not, in itself, a decisive factor when it comes to evaluating whether the award of services to these companies under its control is compatible with Community law on public procurement and concessions.