European Parliament resolution on public-private partnerships and Community law on public procurement and concessions (2006/2043(INI))
Date: 2006-10-26
Institutions: Committee on the Internal Market and Consumer Protection, European Parliament
Subjects: EU law, public authorities, public contract, public-private partnership, service concession

20.12.2006

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P6_TA(2006)0462

Public-private partnerships

European Parliament resolution on public-private partnerships and Community law on public
procurement and concessions (2006/2043(INI))

The European Parliament,

— having regard to the Commission Green Paper on public-private partnerships and Community law on

public contracts and concessions (COM(2004)0327),

— having regard to the Treaty establishing the European Community, particularly Article 5(2) thereof on
the principle of subsidiarity and Articles 43 to 49 thereof on freedom of establishment and freedom to
provide services, and to the principles derived therefrom of transparency, equal treatment, proportion-
ality and mutual recognition,

— having regard to the directives on public procurement currently in force,

— having regard to the Council of Europe's European Charter of Local Self-Government of 15 October

1985,

— having regard to Article I-5 of the Treaty establishing a Constitution for Europe,

— having regard to Rule 45 of its Rules of Procedure,

— having regard to the report of the Committee on the Internal Market and Consumer Protection and the
opinions of the Committee on Economic and Monetary Affairs, the Committee on Transport and Tour-
ism and the Committee on Regional Development (A6-0363/2006),

A. whereas numerous public-private partnerships (PPPs) have been created in many Member States over

the past decade,

B. whereas there is as yet no definition applicable throughout Europe, nor are there any specific provisions

in current Community law, to cover all the different forms of PPP,

C. whereas a PPP can be described as a long-term, contractually regulated cooperation between public
authorities and the private sector to carry out public assignments, in which the requisite resources are
placed under joint management and project risks are apportioned appropriately on the basis of the risk
management skills of the project partners,

D. whereas PPPs are often legally, financially and commercially complicated structures, bringing together
private undertakings and public authorities for the purpose of jointly carrying out and managing infra-
structure projects or providing public services,

E. whereas in the main, local and municipal authorities have sought to enter into PPP projects; whereas,
however, there is also a need for such projects at European level, not least to implement the trans-
European transport networks,

F. whereas PPPs are not a first step towards the privatisation of public tasks,

G. whereas the purpose of PPP contracts is to enable public authorities to benefit from the design, con-
struction and management skills of private enterprises and, if necessary, from their financial skills,

H. whereas cooperation between public authorities and industry can produce synergies and public benefits,
enable public funds to be used more efficiently, serve as an alternative to privatisation in times of scarce
budgetary funding and help public administrations to modernise by acquiring know-how from the
private sector,

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I. whereas PPPs come as a matter of principle within the scope of the Treaty's internal market provisions,
particularly the principles of transparency, equal treatment, proportionality and mutual recognition, as
well as within the provisions of secondary Community law on public procurement,

J. whereas private investors must be provided with guarantees that the terms of a contract will not be

altered during its lifetime,

K. whereas any legal regime for PPPs should respect the right of local and regional self-government, in so

far as it is enshrined in the Member States' national laws,

L. whereas PPPs represent a possible way of organising the fulfilment of public sector tasks, and whereas
the public sector must continue to be able to determine whether it fulfils a task itself or does so
through its own undertakings or through third parties from the private sector,

M. whereas citizens' awareness of the impact of PPPs should be increased,

General comments

1. Welcomes the fact that the Commission produced the above mentioned Green Paper on public-private
partnerships and Community law on public contracts and concessions, a report on the public consultation
on the Green Paper and, finally, a communication on possible follow-up measures in the field of PPPs
(COM(2005)0569);

Considers it premature to assess the effects of the public procurement directives and therefore is
2.
against a review of these directives; opposes the creation of a separate legal regime for PPPs but considers
that there is a need for legislative initiatives in the areas of concessions, respecting the principles of the
internal market and threshold values and providing simple rules for tendering procedures, and for clarifica-
tion with regard to institutionalised public-private partnerships (IPPPs);

3.
Calls on the Commission, in regulating future PPPs and in the current impact assessment of the legal
provisions on concessions, to give serious consideration to regional self-government interests and to involve
representatives of regional as well as local interests in drawing up future rules;

Favours transitional periods for existing contracts that have been concluded in good faith in

4.
accordance with national law, in order to avoid legal uncertainty;

5.

Rejects every means of circumventing the law on public procurement and concessions;

Considers that as a matter of principle the law on public procurement should be applied whenever a

6.
private partner is to be selected;

Considers that the outsourcing of the provision of services of general interest requires the contracting

7.
authority to award the contract on the basis of public procurement procedures;

Is of the opinion that when tasks have been satisfactorily carried out with the assistance of private
8.
partners, restoring them to the municipal sphere of responsibility cannot constitute a sound alternative to
PPPs which is consistent with competition principles;

Considers that municipalities and their subsidiaries should be permitted to be exempted from the
9.
competition principles only when they are carrying out their purely local tasks which bear no relation to
the internal market;

Draws attention to the importance of transparency, respect for which must be evident whenever
10.
public funds are involved, and which should entail the right of elected representatives to inspect agreements
and documents;

Recommends that the Member States create transparent mechanisms guaranteeing that private inves-

11.
tors' legal and financial interests are protected during the whole lifetime of a contract;

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Takes the view that transparent rules on the award of public contracts serve to enhance effective

12.
competition and protection from corruption in the interests of citizens;

Emphasises that the expression ‘conflict of interests’ should be defined at EU level in the interests of

13.
establishing a fair and equitable sharing of risk;

Recommends that in the implementation of PPPs, there should be provision for binding requirements

14.
to account to citizens, so as to ensure safety, efficiency and quality standards;

Recommends that the Member States alleviate the task of the public sector by improving the training

15.
of decision-makers with the task of selecting private partners for PPPs;

16.
Expects the Member States to make arrangements to ensure that the consequences for local authority
employees are handled sensitively and in good time, and that fair agreements about the transfer of (public or
private sector) employees and their employment conditions are promoted and respected, in line with Coun-
cil Directive 2001/23/EC of 12 March 2001 on the approximation of the laws of the Member States relat-
ing to the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of
undertakings or businesses (1);

Expects the provisions of Directive 2001/23/EC to be complied with by the public authorities in the

17.
Member States;

18.
Opposes the establishment of a European agency for PPPs, but welcomes other ways of sharing
experience concerning best and worst practices, such as the networking of national and regional authorities
responsible for the management of PPPs;

19.
Encourages the Commission and the European Investment Bank to gather together their expertise
and disseminate it, especially in those Member States where the public authorities are not familiar with PPPs;

Emphasises that accumulated experience of PPPs helps to prevent the repetition of mistakes and of

20.
failed methods;

21.
Opposes the creation of rules on the award of public procurement contracts beneath the threshold
values at EU level, underlines the responsibility of the Member States to implement in an efficient way the
Treaty principles of transparency, non-discrimination and the freedom to provide services in relation to
public procurement contracts beneath the threshold values and confirms its position that the creation of
public procurement rules at EU level is a prerogative of the Council and Parliament;

22.
Calls on the Commission to ensure, by exercising Community-level control over state aid, that the
granting of subsidies does not involve any discrimination between operators, whether private, public or a
mixture of the two;

PPPs as public contracts

23.
Shares the Commission's view that in the award of public construction or service contracts, the
selection and commissioning of the private partner should as a matter of principle be governed by the
public procurement directives if that selection and the award of the contract are concurrent;

Takes the view that the public body must be able to choose between the open and the restricted

24.
procedure;

25.
Takes the view that on grounds of transparency, the negotiated procedure should be confined to
those exceptional cases which are provided for in the relevant provisions of the public procurement direc-
tives;

(1) OJ L 82, 22.3.2001, p. 16.

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26.
Favours, on the grounds of flexibility, awarding contracts by means of a competitive dialogue where
a contract entails ‘legal and financial complexity’, and calls on the Commission to clarify the condition of
‘legal and financial complexity’ in such a way as to allow the maximum possible room for negotiation; takes
the view that legal and financial complexity can be assumed to be present where typical PPP features such as
a life-cycle concept and a long-term transfer of risk to private operators are present; takes the view that in a
competitive dialogue procedure the risk of confidential information being published outside the procedure
must be eliminated;

PPPs as concessions

Takes note of the fact that after carrying out a detailed impact assessment the Commission would
27.
like to take legislative action; considers that if such legislation is proposed by the Commission, it should
allow public authorities, through flexible, transparent and non-discriminatory procedures, to choose the best
partner according to criteria which are defined in advance;

Expects any legislation clearly to define concessions as distinct from public contracts and to lay down

28.
objectively verifiable criteria for selection;

Takes the view that concessions should be of limited but variable duration, depending on the length
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of time taken for the amortisation of the private investment, so that competitors are not excluded from
competition for an unnecessarily long time; takes the view that the duration of partnership relations should
be established so that free competition is as a matter of principle restricted only to the extent needed to
ensure the amortisation of the investment and an appropriate return on the capital employed and to refi-
nance future investments;

30.
Takes the view that the principle of transparency requires the factors on which the determination of
the duration of the contract is based to be published in the tender documents, so that tenderers can take
this into account when drawing up their tenders;

31.
Considers that a comprehensive approach to procurement (the life-cycle concept) and competition
between tenderers in terms of innovation result in efficiency gains if, when projects are carried out jointly,
risk-sharing is optimised and there are functional specifications and a highly incentivising payment mechan-
ism;

32.
Asks the Commission to draw conclusions from experience gained of competitive dialogue in order
to make recommendations as to an appropriate procurement procedure in the field of concessions, as the
flexibility of competitive dialogues is as a rule suited to the complexity of concessions, without jeopardising
respect for the principles of transparency, equal treatment and proportionality;

Supports the Commission in its efforts to ascertain whether standard procurement rules should be
33.
created for all PPPs on a contractual basis, irrespective of whether the PPPs concerned qualify as a public
contract or a concession;

IPPPs and ‘in-house relations’

Supports the Commission's efforts to take action in the field of IPPPs in view of the clear signs of

34.
existing legal uncertainty;

35.
Acknowledges the fact that practitioners want clarity about the application of procurement law to the
creation of public-private undertakings in connection with the award of a contract or concession, and calls
on the Commission to provide the relevant clarifications at the earliest opportunity;

Does not believe that ‘in-house relations’ without award procedures should be further extended in
36.
scope as this would dispense certain sectors from the need to comply with internal market and competition
rules;

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37.
Considers it necessary, in view of the transparency requirement and the ban on discrimination, for
procurement law to be applied when an IPPP is set up and in the event of a transfer of a share to a private
partner in connection with an IPPP, in so far as the act of setting it up or the transfer is related in time and
substance to the assignment of a public contract;

38.
Understands, in view of the proliferating case-law, the widespread legal uncertainty that has grown
up as to the application of in-house criteria and therefore calls on the Commission to devise criteria, based
on the current case-law of the Court of Justice, that establish a stable frame of reference for public authority
decision-making, and to consider the possibility of incorporating these criteria into Community legislation;

Considers that a threshold value, however defined, for the minimum stake of a public contracting
is held jointly with private partners would result in certain

39.
authority in an undertaking whose capital
permanent protected stakes and that any limit put forward for discussion consequently poses problems;

Takes the view that, if the first invitation to tender for the establishment of a public-private under-

40.
taking has been precise and comprehensive, a further tendering procedure is unnecessary;

Calls for a more precise definition of the concept of ‘similar control’, which the organising public
41.
authority exercises over the service provider, particularly in cases where public-private undertakings provide,
on behalf of the organising public authority and in connection with the performance of its tasks, services
that are mainly funded or underwritten by the organising public authority;

Cooperation between public authorities

42. Welcomes as a general principle, in the interests of local self-government and efficient administra-
tion, some form of cooperation at local authority level, not least to bring about synergies, as long as this
does not enable abuse leading to market closure;

Considers it necessary that the Commission clarify the legal uncertainty regarding cooperation

43.
between public authorities which has arisen as a result of the jurisprudence of the Court of Justice;

44.
Shares the view of the Court of Justice expressed in its judgment in Case C-84/03 Commission v
Spain (1) that cooperation agreements between public authorities cannot be exempted from procurement
law across the board by means of the use of a legal form under national law; takes the view that there is
a need for demarcation between measures which are purely administrative and/or organisational in nature
and procurement contracts between administrative authorities;

Considers that cases of cooperation between public authorities are not relevant with regard to pro-

45.
curement law if:

— the cooperation is between local authorities,

— the tasks, the performance of which was assigned to these local authorities, are to be considered a
matter of administrative reorganisation or if the supervisory powers of the local authorities concerned
are similar to those which they exercise with regard to their own departments, and

— the activities are essentially performed for the local authorities concerned;

46.
Rejects the application of procurement law in cases where public authorities plan to carry out tasks
within their territory in conjunction with other public authorities as a measure of administrative reorganisa-
tion, without offering the provision of the services concerned to third parties on the open market;

Considers that the transfer of responsibilities for public sector tasks from one public authority to

47.
another does not come within the scope of Community procurement law;

(1)

[2005] ECR I-139.

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48.
Considers, however, that procurement law always needs to be applied when public authorities offer
services on the market as private undertakings in the context of cooperation between such public autho-
rities or arrange for public tasks to be carried out by private undertakings or other public authorities out-
side the scope of this cooperation;

Instructs its President to forward this resolution to the Council and the Commission, the European

49.
Economic and Social Committee and the Committee of the Regions.

*

*

*

P6_TA(2006)0463

Posting of workers

European Parliament resolution on the application of Directive 96/71/EC on the posting of workers
(2006/2038(INI))

The European Parliament,

— having regard to Directive 96/71/EC of the European Parliament and of the Council of 16 December
1996 concerning the posting of workers in the framework of the provision of services (1) (the Posting
of Workers Directive),

— having regard to the Commission communication on the implementation of Directive 96/71/EC in the

Member States (COM(2003)0458),

— having regard to the Commission communication entitled, Guidance on the posting of workers within

the framework of the provision of services (COM(2006)0159) (Guidance),

— having regard to the Commission's services report on the implementation of Directive 96/71/EC

(SEC(2006)0439) (Services Report),

— having regard to its resolution of 15 January 2004 on the implementation of Directive 96/71/EC in the

Member States (2),

— having regard to Articles 27 and 34 of the Charter of Fundamental Rights of the European Union,

— having regard to the Migrant Workers (Supplementary Provisions) Convention C143 of the Interna-

tional Labour Organization,

— having regard to Council Framework Decision 2005/214/JHA of 24 February 2005 on the application

of the principle of mutual recognition to financial penalties (3),

— having regard to the judgments of the Court of Justice of the European Communities of 9 August 1994
in Case C-43/93, Vander Elst (4), of 23 November 1999 Joined Cases C-369/96 and 376/96, Arblade (5),
of 25 October 2001 in Joined Cases C-49/98, C-50/98, C-52/98, C-54/98, C-68/98 and C-71/98,
Finalarte (6), of 7 February 2002 in Case C-279/00, Commission v Italy (7), of 12 October 2004
in Case C-60/03, Wolff & Müller GmbH (8), of 21 October 2004 in Case C-445/03, Commission
v Luxembourg (9), and of 19 January 2006 in Case C-244/04, Commission v Germany (10),

— having regard to Council Directive 91/533/EEC of 14 October 1991 on an employer's obligation to
inform the employees of the conditions applicable to the contract or employment relationship (11),

(1) OJ L 18, 21.1.1997, p. 1.
(2) OJ C 92 E, 16.4.2004, p. 404.
(3) OJ L 76, 22.3.2005, p. 16.
(4)
(5)
(6)
(7)
(8)
(9)
(10) [2006] ECR I-885.
(11) OJ L 288, 18.10.1991, p. 32.

[1994] ECR I-3803.
[1999] ECR I-8453.
[2001] ECR I-7831.
[2002] ECR I-1425.
[2004] ECR I-9553.
[2004] ECR I-10191.