Opinion of the Committee of the Regions on the Green Paper on public-private partnerships and Community law on public contracts and concessions
Date: 2004-11-17
Institutions: European Committee of the Regions
Subjects: award of contract, public contract, service concession

22.3.2005

EN

Official Journal of the European Union

C 71/19

Opinion of the Committee of the Regions on the Green Paper on public-private partnerships and
Community law on public contracts and concessions

(2005/C 71/05)

THE COMMITTEE OF THE REGIONS

Having regard to the European Commission's Green Paper on public-private partnerships and Community
law on public contracts and concessions (COM(2004) 327 final);

Having regard to the Commission's decision of 30 April 2004 to consult it on this subject, under the first
paragraph of Article 265 of the Treaty establishing the European Community;

Having regard to the decision of its President of 26 May 2004 to instruct the Commission for Economic
and Social Policy to draw up an opinion on this subject;

Having regard to the its opinion on the Proposal for a Directive of the European Parliament and of the
Council on the co-ordination of procedures for the award of public supply contracts, public service
contracts and public works contracts and the Proposal for a Directive of the European Parliament and of
the Council co-ordinating the procurement procedures of entities operating in the water, energy and trans-
port sectors; (COM(2000) 275 final – 2000/0115 COD and COM(2000) 276 final – 2000/0117COD –
CdR 312/2000 fin) (1);

Having regard to its opinion on the Green Paper on Services of general interest in Europe (COM(2003)
270 final – CdR 149/2003 fin) (2);

Having regard to its opinion on the Mid-term review of the Lisbon Strategy. Having regard to the Commu-
the European Employment
nication from the Commission on Strengthening the implementation of
Strategy. Having regard to the proposal for a Council Decision on Guidelines for the employment policies
of the Member States; Having regard to the Council recommendations on the implementation of the
Member States' employment policies; (COM(2004) 239 final – CdR 152/2004 fin);

Having regard to its draft opinion (CdR 239/2004 rev. 1) adopted on 4 October 2004 by the Commission
for Economic and Social Policy (rapporteur: Ms Segersten Larsson, Chair of Värmland County Council
Executive Committee (SE-EPP);

adopted the following opinion at its 57th plenary session on 17 and 18 November 2004 (meeting
of 17 November):

1. The Committee of the Regions' views

THE COMMITTEE OF THE REGIONS

characteristics of PPPs. The Green Paper also asks a number of
questions, the answers to which are expected to be very impor-
tant for the Commission's future work;

1.1 welcomes the Commission's Green Paper on public
private partnerships and EU law on public procurement and
concessions, since cooperation between municipalities/regions
and the business world has become increasingly important in
the European Union. Growth, cohesion and competition issues
can be tied in with one of the most important aspects of the
Lisbon Strategy: improving the climate for the smooth opera-
tion of the Internal Market. At the same time, the Committee
would highlight
the considerable discrepancies between the
Member States and between different action areas in terms of
cooperation forms and the extent of these;

notes that the Green Paper contains no concrete propo-
1.2
sals. It does, however, aim to show the extent to which Com-
munity rules apply to the phase of selection of the private
partner and to the subsequent phase, with a view to identifying
any uncertainties, and to analyse the extent to which the Com-
munity framework is suited to the imperatives and specific

considers that a public-private partnership cannot be
1.3
seen as a purely technical, legal matter; it must be extended
and illustrated from a political perspective;

hopes that all

1.4
issues connected with partnerships,
procurement and services of general interest will be addressed
holistically;

believes that

the local and regional authorities,

1.5
i.e.
those closest to citizens, are best placed to decide whether they
should provide services themselves, contract them out or run
them in cooperation with other partners. The Committee
would stress the political assemblies' crucial role in assessing
who is to run publicly funded services;

(1) OJ C 144 of 16.05.2001, p. 23
(2) OJ C 73 of 23.3.2004, p. 7

takes the view that the local and regional authorities

1.6
are often best placed to assess how services should be funded;

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Official Journal of the European Union

22.3.2005

1.7
would emphasise the different roles played by the
municipalities and regions, since in addition to organising,
managing and monitoring operations, they also run services in-
house;

1.8
does not believe that partnerships should be seen as a
miracle solution; the potential added value of a public-private
partnership must be assessed on a project-to-project basis;

1.9
agrees with the Green Paper's assertion that the public
partner must be able define the objectives to be attained in
terms of public interest, quality of services provided and
pricing policy, and it
responsibility for monitoring
compliance with these objectives.

takes

Development of the public-private partnership

THE COMMITTEE OF THE REGIONS

1.10
much more broadly than originally intended;

notes that ‘partnership’ has come to be interpreted

suggests that

1.11
‘public-private partnership’ should in
future be defined more restrictively, to denote extended rela-
tionships, joint risk-taking, and major financial commitment;

considers that it is, consequently, extremely important
1.12
in
to better define the concept of public-private partnership,
order to provide for an appropriate debate regarding any future
Community initiatives;

observes

that partnership/cooperation is usually
1.13
perceived as a wider phenomenon than just public-private part-
nership. Municipalities and regional authorities also work with
many other players, such as other local and regional authori-
ties, universities, trades unions, religious communities, associa-
tions, social and professional interest groups, voluntary organi-
sations, and private individuals. These partners can also be
expected to gain in importance in the future;

1.14
notes that traditional forms of procurement, in which
the parties aim for closer cooperation and joint responsibility,
are also sometimes referred to as public-private partnerships or
‘contractual public-private partnerships’;

1.15
considers that closer cooperation is also important in
traditional procurement procedures, particularly during the
implementation phase;

1.17
emphasises that multiple controls on the provision of
services of general economic interest, as well as on partnerships
involving the public authorities already exist. It should not be
forgotten that economic and political decisions are subject to a
multiple democratic voting procedure and therefore to advance
controls, and to scrutiny by their own supervisory bodies. All
these guarantee qualified publicity.

2. The Committee of the Regions' recommendations

THE COMMITTEE OF THE REGIONS

stresses that EU Treaty principles on,

for example,
2.1
transparency, equal opportunities, proportionality and mutual
recognition must underpin all the different types of partnership
projects;

does not consider it appropriate to introduce any
2.2
this stage, since the
Community partnership legislation at
notion of
‘partnership’ has not been clearly defined. The
Committee does not believe that public-private partnerships
can be incorporated into Community procurement directives,
since these do not provide sufficient encouragement for initia-
tive, risk-taking or flexibility. The regulatory framework is
insufficiently flexible, since partnerships involve a more active
role as a partner rather than as a traditional service provider.
While the Commission does indeed seem to have taken on
board some aspects of the Committee of the Regions' previous
opinions, this is not sufficient;

2.3
emphasises the central role of local and regional autho-
rities in defining, organising, funding and monitoring services
of general interest;

2.4
believes that, with reference to their duty to guarantee
access to services of general interest, public authorities should
be free to choose and experiment with different models as long
treatment,
as certain principles such as transparency, equal
proportionality and mutual recognition are complied with;

2.5
considers that the local and regional authorities are also
best placed to decide service type, format and quality require-
ments, since they are closest to citizens. Moreover, the demo-
cratic procedures which the public authorities are subject to in
such decisions ensure qualified supervision and transparency;

important

considers it

2.6
these
authorities should be free to decide whether to provide services
in-house, contract them out or run them in cooperation with
other parties;

to re-emphasise that

1.16
points out that, in a joint-partnership or ‘institutional’
public-private partnership, ultimate responsibility often lies
with the public authority. The value-added results from more
responsibility being shouldered by the private sector, and from
joint-financing, new ideas and approaches, and the establish-
ment of a long-term relationship;

2.7
stresses the need for local and regional authorities to be
able to develop other individual, flexible forms of cooperation;

stresses the need to focus more on the citizen, since

2.8
services are provided for citizens;

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2.9
asserted in its opinion on the Proposal for a Directive
of the European Parliament and of the Council on the co-ordi-
nation of procedures for the award of public supply contracts,
that
public service contracts and public works contracts,
public-private partnership projects must be flexible and gener-
ally accessible.
It also highlighted the need for extensive
dialogue between the purchaser and the supplier throughout
the procurement procedure;

2.10
noted in the same opinion that ‘it must be established
that procurement by regional and local authorities from their
own independent legal entities does not fall within the scope of
the directives and must be regarded as production carried out
under their own management’;

2.11 welcomes the Green paper's assertion that
‘Com-
munity law on public contracts and concessions is neutral as
regards the choice exercised by Member States to provide a
public service themselves or to entrust it to a third party’;

2.12
notes that many countries are developing a kind of
partnership in which individual citizens decide who is to
provide the service. The public authority's
role is more
concerned with guaranteeing minimum quality levels and
ensuring companies are bona fide. Current procurement rules
take no account of these situations where citizens are impor-
tant players and take the final decision regarding who is to
provide the service;

2.13
is as yet unable to say whether Community legisla-
tion on service concessions should be introduced, because the
expression ‘partnership’ has not been defined. The Committee
does not believe that service concessions should come under
Community procurement directives, since concessions require a
more flexible procedure than procurement;

notes that current procurement

2.14
legislation is still
complicated and does not encourage flexibility or innovative
ideas;

stresses the need for

2.15
the decision to transfer a
company from the public to the private sector to be an
the exclusive
economic policy decision, and consequently,
competence of the Member States;

Brussels, 17 November 2004

2.16
hopes that experience resulting from competitive
dialogue will be taken on board before any further measures
are proposed. The Committee would also point out that, in its
it expressed reservations
opinion on procurement directives,
about this type of procurement and called instead for greater
use to be made of negotiated procurement;

2.17
hopes that the Commission will clarify the legal situa-
tion in the light of the Teckal case, as it is interpreted differ-
ently in the Member States. The Committee does not believe
that activities carried out by a wholly-owned public company
should be governed by Community procurement legislation, as
they are public-controlled and equivalent to in-house opera-
in
the bulk of
tions.
conjunction with the public authorities that own it;

the work is carried out

In addition,

2.18
consensus when concluding long-term agreements;

would stress the need for

local/regional political

2.19
would underline the need to take account of demo-
cratic requirements, which must reflect citizens' wishes, in addi-
tion to the needs of competition;

2.20
‘partnership’ has been defined;

intends to return to the matter once the expression

2.21

finally, would raise some further questions:

— How is the democratic element to be safeguarded in part-

nership projects and procurement?

— What

is the potential

for citizens to exercise political

authority?

— What economic latitude is available in long-term contracts?

— How can political freedom of action be ensured?

— How are changing needs and circumstances handled in

long-term contracts?

— How will citizens be assured of operational transparency?

— Is there any assurance the authorities will be able to
manage, monitor and guarantee high quality services for
citizens?

— What is the impact and importance of the Structural Funds

in developing public-private partnerships?

The President

of the Committee of the Regions

Peter STRAUB