REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the functioning of Directive 2014/23/EU on the award of concession contracts and on the impact on the internal market of the exclusions set out in Article 12
Date: 2023-07-28
Institutions: Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, European Commission
Subjects: administrative transparency, application of EU law, award of contract, principle of legal certainty, public procurement, service concession, single market, tendering, water management

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   EUROPEAN COMMISSION  Brussels, 28.7.2023  COM(2023) 460 final  REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the functioning of Directive 2014/23/EU on the award of concession contracts and on the impact on the internal market of the exclusions set out in Article 12 {SWD(2023) 267 final}  
 
 
REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND 
THE COUNCIL 

on the functioning of Directive 2014/23/EU on the award of concession contracts and on 
the impact on the internal market of the exclusions set out in Article 12 

1. 

INTRODUCTION 

The Commission estimates that the overall value of government procurement in the EU was 
around  EUR  2 163  billion  in  2018  or  13.6%  of  EU  GDP1,  out  of  which  around  EUR  670 
billion2 was covered by the three public procurement Directives. When public authorities need 
to mobilise private capital and know-how to complement scarce public resources, concessions 
can be a very attractive way of carrying out projects of public interest  while limiting public 
debt.  Concessions  are  contractual  arrangements  where  one  or  more  public  contracting 
authorities  or  contracting  entities  entrust  the  execution  of  works,  or  the  provision  and  the 
management  of  services,  to  one  or  more  private  economic  operators.  Concession  contracts, 
which amount to an average value of EUR 63 billion a year, underpin partnerships between 
the public sector and private companies in key strategic sectors. This is notably the case for 
the  development  of  infrastructure,  such  as  ports  and  airports,  parking  garages,  toll  roads, 
motorway  maintenance,  or  the  provision  of  services  of  general  economic  interest  such  as 
energy or waste disposal. 

Directive 2014/23/EU3 on the award of concession contracts (hereinafter the “Directive”) was 
adopted  to  address  the  absence  of  a  coherent,  all-encompassing  EU-level  framework  for 
concessions. The aim of the Directive is to provide a clear legal framework that promotes the 
use of concessions while improving market access for businesses by ensuring transparency and 
fairness in award procedures.  

The fourth paragraph of Article 53 of the Directive mandates the Commission to “review the 
functioning  of  this  Directive  and  […]  to  report  to  the  European  Parliament  and  to  the 
Council”,  while  the  third  paragraph  of  that  Article  requires  the  Commission  to  “assess  the 
economic effects on the internal market of the exclusion [of the water sector]” from the scope 
of  the  Directive.  This  Report  presents  the  main  findings  of  that  review  and  assessment.  It 
draws  on  information  from  the  Commission  Staff  Working  Document  on  the  application  of 
the  Directive  (“Commission  Staff  Working  Document”),  which  is  to  be  read  in  conjunction 
with this Report. 

Indicators 

Procurement 

Public 
2018, 
(https://ec.europa.eu/docsroom/documents/48156). 
See note 1, page 1. 
Directive 2014/23/EU of the European Parliament and of the Council of 26 February 2014 on the award 
of concession contracts, OJ L 94, 28.3.2014, p. 1–64.  

GROW, 

2021 

May 

DG 

17, 

1 

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The  Report  and  Staff  Working  Document  are  based  on  a  body  of  evidence  coming  from 
multiple sources,  such as data extracted from  the  Tenders Electronic Daily  database (TED); 
information made available by Member States in accordance with Article 45 of the Directive4; 
the Study on the implementation of the Concessions Directive carried out for the Commission 
by  London  Economics  Europe  and  Spark  Legal  (2021)5;  a  survey  launched  by  the 
Commission services in 2021 to collect information from Member States on the organisation 
of the water sector and positions expressed by stakeholders during an online stakeholder event 
organised  by  the  Commission  on  the  review  of  the  functioning  of  the  Directive  and  the 
assessment of water exclusion.  

The late transposition of the Directive by all Member States - the Directive has been applied 
in the whole of the EU only since 2020 - prevents a full assessment of the functioning of the 
Directive  and  the  water  sector  exclusion  at  this  point  in  time.  More  experience  with  the 
Directive is necessary to make a fully-fledged assessment of its functioning as well as of the 
impact  of  excluding  the  water  sector  from  the  scope  of  the  Directive.  Nevertheless,  the 
tendencies  observed  on  the  basis  of  available  data  point  to  increased  transparency  in 
improved 
concessions  contracts, 
administrative capacity to oversee public procurement and concessions at national level. 

increased  SME’s  participation 

to  concessions  and 

2. 

THE EU CONCESSIONS MARKET 

The total value of concessions covered by the Directive and awarded between 2016 and 2021 
is estimated at EUR 377.5 billion. Total value of concessions  represents 12 % of the  yearly 
overall  public  procurement  market  covered  by  the  three  public  procurement  Directives 
combined6.  The  Directive  applies  to  concessions  with  a  value  equal  or  greater  than 
EUR 5 382 0007. 

The total number of concessions awarded in the EU has roughly doubled since the 18 April 
2016  -  the  transposition  deadline  -  and  continues  to  increase8.  This  upwards  trend  can  be 
observed in most Member States. 

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Fourth  paragraph  of  Article  53  of  the  Directive  indicates  that  the  review  of  the  functioning  of  the 
Directive shall be based on information that Member States provide in accordance with Article 45(3). 
The Study is going to be published together with this Report. 
2018 data referring to Directive 2014/23/EU, Directive 2014/24/EU of the European Parliament and of 
the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC, OJ L 94, 
28.3.2014, p. 65–242 and Directive 2014/25/EU of the European Parliament and of the Council of 26 
February 2014 on procurement by entities operating in the water, energy, transport and postal services 
sectors and repealing Directive 2004/17/EC, OJ L 94, 28.3.2014, p. 243–374.  
Concessions with values lower than this threshold are often published in TED. 
Comparison between total numbers of concessions awarded in the period 2012 - 18 April 2016 and the 
period  19  April  2016  -  2019.  For  more  details  see  Chapter  3  of  the  Commission  Staff  Working 
Document. 

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Figure 1: Concession award notices by year [number, value in billion EUR], EEA countries

Source: Study on the implementation of the Concessions Directive - London Economics Europe and Spark Legal 
(2021), figure 41. 

France  and  Italy  account  for  more  than  two  thirds  of  the  EU  concessions  market.  Together 
with  Spain  and  Germany,  these  Member  States  make  up  for  85  %  of  the  total  increase  of 
concession  awards  in  the  same  period.  Member  States  such  as  Austria,  Czech  Republic, 
Finland, Hungary, Croatia, Malta and Sweden have also registered large increases in the use 
of concessions.  

Figure 2: Yearly average number of concessions by Member States, pre- and post-Directive 
[number] 

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Source:  In-house  calculation  based  on  Study  on  the  implementation  of  the  Concessions  Directive  -  London 
Economics Europe and Spark Legal (2021), figure 17. 

The  number  of  service  concession  awards  has  sharply  increased  since  18  April  2016  -  the 
transposition deadline. The number of works concession awards however, has been gradually 
decreasing before and continued on the same trend after this date. 

The sectors with the largest number of concession awards since 2016 are: (1) hotel, restaurant 
and retail trade services; (2) recreational, cultural and sporting services; and (3) construction 
work.  

3. 

TRANSPOSITION AND INFRINGEMENT PROCEEDINGS 

The Commission’s objective is to achieve early compliance so that the benefits of EU law are 
felt  by  the  people  and  businesses  as  soon  as  possible.  This  is  why  the  Commission  has 
increased its support to Member States over the years to prevent breaches from happening in 
the  first  place  and  otherwise  to  resolve  them  in  the  early  stages  of  the  procedure,  without 
having  to  refer  a  Member  State  to  the  Court  of  Justice.  This  has  led  to  a  decrease  in  the 
number of cases where the Member States were late in transposing directives. To strengthen 

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this approach, the Commission has recently proposed to set concrete targets on enforcement 
with the aim of limiting both the transposition as well as conformity deficit to 0.5%9. 

As  regards  the  Directive,  Member  States  had  to  transpose  it  into  national  law  by  18  April 
2016.  At  the  expiry  of  the  transposition  period,  only  six  Member  States  had  communicated 
the  necessary  measures  to  the  Commission  and  infringement  cases  for  non-communication 
were  launched  in  2016.  By  February  202010,  all  EU  Member  States  had  transposed  the 
Directive and all infringements relating to late transposition have been closed. However, three 
Member States did not transpose the Article which provides for specific exclusions from the 
application  of  the  Directive  in  the  field  of  water,  and  three  Member  States  did  so  only 
partially.  These  Member  States  therefore  apply  (in  full  or  partially)  the  Directive  also  to 
concessions for work and services in specific fields of the water sector. 

An assessment of the national transposition measures identified that only ten Member States 
were in full conformity with all the obligations of the Directive on the date of the expiry of 
the  transposition  deadline.  The  Commission  therefore  initiated  infringement  proceedings 
against the remaining Member States in four successive waves (January 2019, October 2019, 
June  2021  and  December  2021).  Following  notification  of  national  measures  and  their 
assessment,  the  proceedings  against  eight  Member  States  have  been  formally  closed  as  a 
result  of  the  corrective  legislative  action  taken  by  them.  The  remaining  proceedings  are 
ongoing11  and  concern  elements  such  as  scope,  the  criteria  for  exclusion  of  economic 
operators, and modification of contracts.  

In  several  Member  States,  national  authorities  have  issued  guidance  on  the  rules  on 
concessions. 

4. 

MAIN FINDINGS OF THE REVIEW OF THE FUNCTIONING OF THE DIRECTIVE 

The  Directive  pursues  two  principal  objectives:  (1)  providing  certainty  on  the  legal 
framework by defining certain concepts and codifying certain principles relating to the award 
of concessions, in line with the case law of the European Court of Justice, and (2) improving 
access  to  the  concessions  markets  by  increasing  transparency  and  fairness  in  award 
procedures.  

4.1. 

Legal certainty 

The definition of “concession” 

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10 
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Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic  and  Social  Committee  and  the  Committee  of  the  Regions  -  The  Single  Market  at  30 
(COM(2023) 162 final of 16 March 2023). 
The last Member State transposed the Directive on 26.02.2020. 
Some  of  the  infringement  procedures  concern  all  three  public  procurement  Directives,  and  will 
therefore  be  formally  closed  only  when  all  issues  (pertaining  to  the  three  Directives  referred  to  in 
footnote  6)  have  been  solved.  In  this  respect,  it  may  appear  that  some  Member  States  have  ongoing 
infringements even if, strictly speaking, issues related to the implementation of the Directive may have 
been solved in the meantime. 

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The Directive provides a definition of concessions at EU level12. In practice, it seems that the 
term “concession” is often used in Member States’ legislation  for sectors and issues that  go 
beyond the scope of the Directive. Most notably, in the majority of Member States, national 
legislation  often  use  the  term  “concession”  to  refer  to  other  legal  concepts,  such  as 
authorisations or licences13. 

Those  discrepancies  may  lead  to  higher  costs  as  economic  operators  participating  in  cross-
border  concessions  cannot  rely  on  one  single  meaning  of  “concession”.  It  may  also  lead  to 
time-consuming  misunderstandings  on  the  side  of  both  contracting  authorities/entities  and 
economic  operators,  not  only  about  the  interpretation  of  the  applicable  definition,  but  also 
about which legislation applies. 

The definition of “operating risk” 

The  presence  of  an  operating  risk14  is  what  differentiates  concession  contracts  from  other 
types  of  public  contracts.  Therefore,  the  transposition  of  this  notion  is  key  to  ensure  the 
correct  implementation  of  the  Directive.  Yet,  only  four  Member  States  have  transposed  the 
concept exactly as set out in the Directive. Over twenty Member States transposed the concept 
through a slightly different wording than the one provided in the Directive, and two Member 
States did not address the operating risk at all in their national legislation. At this stage it is 
not  possible  to  say  whether  those  discrepancies  have  practical  economic  impact.  Different 
interpretations  of  operating  risk  could  mean  that  public  procurement  for  the  same  type  of 
work or service provisions will be treated differently across Member States, or could not even 
be subject to the provisions transposing the Directive. 

Modifications of concession contracts 

The  Directive  also  includes  specific  provisions  on  concession  contract  modification 
developed  through  case  law  and  provides  practical  solutions  for  dealing  with  unforeseen 
circumstances requiring a concession to be modified during its term. Contract modifications 
need  to  be  handled  carefully,  in  particular  modifications  without  a  new  opening  of 
competition, to ensure effective competition and transparency. 

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14 

The Directive defines concessions as written contracts between one or more contracting authorities or 
contracting entities and one or more economic operators (concessionaire), where the latter is entrusted 
with the execution of works or the provision and management of services and is remunerated by being 
given  the  right  to  exploit  the  respective  works  or  service,  or  by  being  given  this  right  together  with 
payment.  
This  is  to  be  distinguished  from  “authorisations”  or  “licences”  which  involve  a  public  authority 
establishing  conditions  for  a  contractor  to  carry  out  a  certain  operation.  Whereas  an  authorisation  or 
licence provides a contractor with the right to exploit that authorisation or licence, a concessionaire is 
under  an  obligation.  Directive  2006/123/EC  of  the  European  Parliament  and  of  the  Council  of  12 
December  2006  on  services  in  the  internal  market  (OJ  L  376,  27.12.2006,  p.  36)  applies  to 
authorisations and licences. 
The Directive defines the notion of “operating risk.” Concession contracts always involve the transfer to 
the concessionaire of an operating risk of economic nature. This means that the concessionaire may not 
recoup  investments  made  and  the  costs  incurred  in  operating  the  works  or  services  awarded  under 
normal  operating  conditions,  even  if  a  part  of  the  risk  remains  with  the  contracting  authority  or 
contracting entity. 

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A  few  Member  States  have  developed  guidance  on  contract  modifications.  Eleven  Member 
States have introduced an  explicit requirement in  national legislation that any modifications 
must  be  approved  by  a  government  authority  other  than  the  procuring  authority  responsible 
for  the  initial  contract.  However,  modification  of  contracts  during  their  term,  including 
wrongful extension of contracts and amendments without a new call for competition are often 
reported as a source of wrong application.  

Concessions and other public private partnerships 

The  Directive  clarifies  the  cases  in  which  a  contract  concluded  between  a  contracting 
authority  and  an  economic  operator  is  not  subject  to  the  concession  award  rules.  This  is 
guided by the principles set out in the case law of the European Court of Justice as there is no 
EU law defining and regulating the concept of public private partnership. 

Member  States  have  taken  different  approaches  to  legislating  about  public  private 
partnerships.  Some  national  legal  frameworks  include  rules  that  specify  how  public  private 
partnerships  relate  to  the  rules  on  concessions,  while  in  other  Member  States  there  are 
diverging definitions of the term public private partners at national level and/or less clarity as 
to how legislation on this topic refers to the definition of, and rules on, concessions. 

4.2. 

Application and enforcement  - sources of incorrect application of the rules for 
the award of concession contracts 

All  Member  States  report  significant  and  successful  efforts  to  put  in  place  monitoring 
authorities and structures to ensure correct and efficient application of the rules for award of 
concessions.  Most  Member  States  have  appointed  a  single  Public  Procurement  Monitoring 
Authority.  The  reporting  by  Member  States  does  not  distinguish  between  concessions  and 
other types of procurements. The information on the causes of incorrect application, structural 
or recurring problems is therefore presented across the board for all types of procurement.  

The  most  frequent  cause  of  incorrect  application  or  of  legal  uncertainty,  as  reported  by 
Member States, is the lack of procurement skills, modification of contracts during their term, 
calculation of the estimated value of the procurement and artificial splitting into lots.  

As  regards  the  practical  application  of  the  rules,  Member  States  report  difficulties  linked  to 
the  interpretation  and  verification  of  exclusion  grounds,  formulation  of  meaningful  award 
criteria other than price only, including criteria linked to strategic objectives, use of negotiated 
procedure  without  publication,  classification  of  contracts  as  public  contracts  or  concession, 
and transparency.   

Member  States  had  put  in  place  general  anti-corruption  legislation  and  institutions  even 
before  the  adoption  of  the  Directive.  In  most  Member  States,  the  national  competition 
authorities, prosecutors and other enforcement agencies are primarily responsible for carrying 
out such policies. In addition to that, some Member States have specific institutions dedicated 
to combatting fraud or corruption.  

In order to mitigate the risks of conflict of interest, corruption, collusion and cartels, most of 
Member  States  have  adopted  soft  law  measures  such  as  national  anti-corruption  strategies, 

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guidance  (e.g.  to  detect  collusive  behaviour,  awareness-raising  and  training,  leniency 
programmes  for  operators  that  come  forward  with  information  and  prevention  activities), 
codes of conduct for civil servants and professionalisation. Furthermore, most Member States 
have  adopted  measures  going  beyond  the  requirements  of  the  Directive,  by  introducing  for 
instance broader definitions of conflict of interest, penalties or even annulment of contracts in 
line with the OECD guidelines15. 

Box 1: Guidance on addressing collusion in public procurement and concessions 

The Commission has recently published new guidance16 for European contracting authorities 
and  entities  on  how  to  address  suspected  cases  of  collusion  in  public  procurement  and 
concessions.  

The guidance lists the tools aiming, on one hand, to support Member States and contracting 
authorities in building capacity to address cases of collusion and, on the other hand, to foster 
cooperation  between  national  central  procurement  and  competition  authorities  to  ensure 
support  to  contracting  authorities.  The  guidance  also  includes  user-friendly  tips  for 
contracting authorities on how to apply the collusion-related exclusion ground provided for 
in the public procurement Directives. 

4.3. 

Findings related to better access to the concession market 

The following factors have been considered when assessing whether the Directive improved 
access to the concession market: (i) transparency through publication; (ii) SME participation 
in concession awards; (iii) number of tender offers; and (iv) cross-border participation in the 
EU concessions market.  

Transparency through publication 

Data  extracted  from  TED  suggests  that,  since  18  April  2016,  there  has  been  an  important 
increase in the number of published concession notices: from 664 in 2016 to 1 877 in 2021. 
Similarly, the yearly average of published concession award notices have increased from 143 
in 2016 to 993 in 2021.  

It appears, however, that the number of concession notices is still around twice as high as the 
number  of  concession  award  notices17.  This  discrepancy  between  the  number  of  concession 
notices and concession award notices, appears in all Member States and seems to be driven by 
several  factors,  such  as:  concessions  may  be  advertised  through  notices  but  they  might  not 

15 

16 

17 

OECD  Recommendation  on  Fighting  Bid  Rigging 
in  Public  Procurement  available  at: 
https://www.oecd.org/daf/competition/oecdrecommendationonfightingbidrigginginpublicprocurement.h
tm.  
Notice on tools to fight collusion in public procurement and on guidance on how to apply the related 
exclusion ground, C (2021) 1631 of 15.03.2021. 
Concession  notices  are  published  in  the  Official  Journal  at  the  beginning  of  the  tender  procedure  in 
order to ensure adequate advertising of the tender while concession award notices are published at the 
end and contains information  on the outcome of the tender procedure. For more details please refer to 
Chapter  5.2  Providing  Better  Access  to  the  concessions  market  of  the  Staff  Working  Document 
accompanying the Report. 

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eventually  be  awarded,  and  multiple  contracts  notices  may  eventually  become  a  single 
concession award18.  

Quality  of  data  reported  in  TED  is  expected  to  increase  with  the  implementation  of 
Regulation (EU) 2019/178019 on new standard forms for notices (eForms) which will become 
mandatory as of 25 October 202320. 

While the increased publication of concession notices and concession award notices suggests 
that transparency has improved since 18 April 2016, it is also notable that there has been an 
increase in concession awards without a prior publication of a contract notice21 in TED. Since 
2018,  the  total  yearly  value  of  concessions  awarded  without  publication  of  a  concession 
notice have been higher than concessions awarded following the publication of a concession 
notice. For instance, in 2021 the total value of concessions awarded without publication of a 
contract  notice  was  EUR  44  billion,  while  the  total  value  of  concessions  awarded  with 
publication  of  a  concession  notice  was  EUR  37  billion.  Concession  awards  without  prior 
publication  occur  mainly  in  the  electricity  distribution  sector  which  is  characterised  by  few 
suppliers  and  where  technical  reasons  or  the  existence  of  exclusive  rights  may  explain  the 
absence of competition. 

SMEs participation in concession awards 

Prior to 18 April 2016, information about contractors’ size was not recorded in TED and it is 
therefore not possible to compare the incidence of awards to SMEs before and after this date. 
However,  since  2016  there  has  been  a  significant  increase  in  the  number  of  concessions 
awarded to SMEs: from 22.4 % in 2016 to 31.6 % in 2021. There are indications that Member 
States that provide national guidance on concessions attract more SMEs22. 

In terms of value, however, SMEs do not account for a similarly important share of contracts 
awarded.  According  to  TED,  SMEs  were  mainly  awarded  contracts  of  low  value  (the  SME 
share has varied from 11.2 % in 2017 to 3.9 % in 2021). Although large concessionaires won 
only  two  in  three  concession  contract  in  the  relevant  period,  such  contracts  accounted  for 
nearly  92  %  of  the  concessions  market  in  terms  of  value.  The  number  and  value  of 
concessions  awarded  to  SMEs  is  relatively  low  compared  to  their  overall  importance  in  the 
economy.  

18  

19 

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21 

22  

The  difference  may  also  be  methodological  as  non-awarded  and  cancelled  concessions  have  been 
removed from the database registering award notices but not from the database registering concession 
notices. 
Commission Implementing Regulation (EU) 2022/2303 of 24 November 2022 amending Implementing 
Regulation  (EU)  2019/1780  of  23  September  2019  establishing  standard  forms  for  the  publication  of 
notices in the field of public procurement  OJ L 305, 25.11.2022, p. 12. 
The  Regulation  (EU)  2022/2303  applies  from  14  November  2022.  Between  that  date  and 
24 October 2023, the use of eForms by buyers is only optional. Most Member States will switch at the 
end of the transition period. 
According to Article 31(4) of the Directive, a public buyer is not obliged under certain circumstances 
and for certain sectors to publish a concession notice. 
Study  on  the  implementation  of  the  Concessions  Directive  -  London  Economics  Europe  and  Spark 
Legal (2021), p. 108. 

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The  SME  Strategy  and  Action  Plan  on  Intellectual  Property  Rights23  pointed  out  that 
innovation  procurement  offers  untapped  opportunities  for  startups  and  the  development  of 
innovative  solutions.  Public  investment  and  innovation  are  two  essential  ways  to  meet  the 
challenges of the recovery, the green and digital transition and the creation of a more resilient 
economy  in  the  EU.  The  Commission  considers  green  public  procurement  as  an  important 
instrument  to  stimulate  the  demand  for  net-zero  products  at  large  scale  as  reflected  in  the 
Green Deal Industrial Plan24. 

Additionally,  in  2021,  the  Commission  adopted  a  Guidance  notice  on  innovation 
procurement25  intended  to  boost  innovation  procurement  and  help  economic  operators  to 
develop innovative solutions in key industrial  ecosystems, in particular where public buyers 
are critical investors. 

Number of tender offers 

Analysis  of  data  collected  from  TED  since  18  April  2016  shows  that  the  yearly  average  of 
number of tender offers per concession award notice has decreased between 2016 and 2019. 
In 2020 and 2021,  the average number of  offers increased, but  the 2021  figure (2.44 tender 
offers per award) remains below 2016 values.  

Cross-border26 participation in the EU concessions market 

For  low-value  concessions  falling  under  the  Directive,  the  share  of  economic  operators 
bidding from their home market to win a concession in another Member State (direct cross-
border)  is  2.4  %.  The  share  of  economic  operators  bidding  and  winning  through  local 
subsidiaries (indirect cross-border) is 15.5%. Cross-border awards for high-value concession 
stands at 3.4% for direct cross-border and 8.5% for indirect cross border27. 

Regarding  intra-EU  (cross-border)  awards,  firms  headquartered  in  France  but  with 
subsidiaries in other Member States are among the most frequent winners of intra-EU (cross-
border) concession contract, followed by firms from Luxembourg, Germany and Sweden28. 

A survey made as part of a recent study29 indicated that the companies perceive the following 
barriers  in  respect  to  the  process  of  cross-border  and  foreign  participation  and  contract 

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26 

27  

28 

29  

Communication  from  the  Commission.  Making  the  most  of  the  EU’s  innovative  potential  –  An 
intellectual  property  action  plan  to  support  the  EU’s  recovery  and  resilience.  COM  (2020)760  final, 
25.11.2020.  
Communication from the Commission to the European Parliament, the European Council, the Council, 
the Economic and Social Committee and the Committee of the Regions, A Green Deal Industrial Plan 
for the Net-Zero Age, COM(2023) 62 final of 1.2.2023. 
Commission Notice Guidance on Innovation Procurement, C (2021) 4320, of 18.6.2021. 
Contracts awarded intra-EU by a contracting authority or contracting entity in one Member State to an 
economic operator from another Member State. 
Study  on  the  measurement  of  cross-border  penetration  in  the  EU  public  procurement  market,  Final 
report,  Prometeia  SpA,  BIP  Business  Integration  Partners–  Spa,  Economics  for  Policy  a  knowledge 
Center of Nova School of Business and Economics Lisboa, March 2021, p. 66 and 78. 
For  more  details  please  refer  to  Chapter  5.3  Cross-border  and  foreign  participation  in  the  EU 
concessions market of the Staff Working Document accompanying the Report. 
See footnote 25, p. 10. 

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implementation:  burdensome  administrative  requirements  and  legal  framework,  difficult 
access to procurement information, and language. 

Box 2: Foreign participation to the EU concessions market 

When  comparing  the  number  of  intra-EU  (cross-border)  with  non-EU  (foreign)30  awards, 
concessionaires  coming  from  non-EU  countries  prevail.  Regarding  non-EU  awards,  firms 
headquartered in the United Kingdom and the United States but with subsidiaries within the 
EU are the most frequent foreign winners of concession contracts. 

The  Commission  has  adopted  measures    to  prevent  distortion  of  the  internal  market  due  to 
foreign  subsidies,  including  in  the  public  procurement  and  concessions  market.  In  this 
respect, the Regulation  on foreign subsidies31 adopted on 14 December 2022 aims to tackle 
adequately  tenders  benefiting  from  foreign  subsidies  in  public  procurement  contracts  and 
concessions which cause distortions in the internal market. The Commission has the power, 
upon  notification  prior  to  the  award  of  a  contract,  to  examine  information  on  foreign 
financial  contributions  to  the  participating  economic  operator  in  the  context  of  a  public 
procurement  and  concession  tender  procedure.  Prior  notifications  are  mandatory  above  a 
threshold of EUR 250 Million, to capture economically significant cases. The Regulation will 
apply from 12 July 2023.  

The  International  Procurement  Instrument  Regulation  (IPI)32  aims  to  open  up  the 
procurement  and concession  markets  of  third countries that restrict access  of  EU economic 
operators,  goods  or  services  by  enabling  the  Commission  to  investigate  cases  and 
simultaneously hold consultations with the third country concerned on removing the alleged 
restrictions.  However,  if  the  consultations  with  that  third  country  fail,  the  Commission  can 
adopt IPI measures to restrict access of operators, goods and services of that third country to 
the EU procurement and concessions markets.  

5. 

FINDINGS ON THE IMPACT OF THE DIRECTIVE ON THE WATER SECTOR  

The  Directive  excludes  concessions  for  the  provision  or  operation  of  networks  intended  to 
provide  production,  distribution  or  transport  of  water  as  a  service  to  the  public.  All 
concessions  regarding  the  supply  of  water  to  these  networks  are  excluded,  as  are  those 
regarding the disposal or treatment of sewage. However, some Member States have decided to 
include all those activities in their national transposition measures. 

Overview of the water sector in the EU  

30  

31 

32  

Contracts awarded by a contracting authority or contracting entity in one Member State to an economic 
operator from a third country. 
Regulation  (EU)2022/2560  of  the  European  Parliament  and  of  the  Council  of  14  December  2022  on 
foreign subsidies distorting the internal market, OJ L.330 of 23.12.2022, p.1. 
Regulation  (EU)  2022/1031  of  the  European  Parliament  and  of  the  Council  of  23  June  2022  on  the 
access of third-country economic operators, goods and services to the Union’s public procurement and 
concession  markets  and  procedures  supporting  negotiations  on  access  of  Union  economic  operators, 
goods and services to the public procurement and concession markets of third countries (International 
Procurement Instrument – IPI) OJ L 173, 30.6.2022, p. 1. 

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In  2021,  the  EU  water  industry  supplied  drinking  water  to  approximately  450  million  EU 
residents.  According  to  Eurostat,  almost  15 500  companies  are  active  in  the  collection, 
treatment and supply of water and around 11 000 in sewage. While companies active in the 
water  sector  operate  mainly  at  the  domestic  level,  there  is  some  cross-border  participation 
mainly indirectly, through foreign-owned local subsidiaries. 

From an economic perspective, water is a highly capital-intensive sector, with market failures 
which may require State intervention. They include, on the one hand, the essential nature of 
water and on the other hand, the scale of the sunk investments in networks notably in remote 
or  scarcely  populated  areas  which  involve  long  timeframe  to  be  recouped  and  substantial 
risks. The recognition of societal significance and prevention of market failures in the water 
sector has led to the special treatment in the Concessions Directive. 

Member  States  apply  various  management  models  for  the  provision  of  water  services.  The 
ways water services are organised depend on a combination of historical, cultural, economic 
and societal factors.  

Different forms of private sector involvement in the water sector in Europe can be traced back 
to  the  19th  century.  The  number  of  contracts  involving  private  partners  started  to  increase 
significantly  after  1980.  Factors  which  may  have  favored  the  involvement  of  the  private 
sector would include possible improved service quality and efficiency, improved management 
efficiency  (i.e.  easier  access  to  capital  markets).  Public  involvement  remained  nevertheless 
important to cater for wider societal needs. 

The water sector since 18 April 2016 

Three Member States fully apply the provisions of the Directive for concessions in the water 
sector (Czech Republic, Poland, Romania), while three others (Bulgaria, France, Spain) apply 
it partially.  

Based  on  GWI  WaterData33  historical  data  on  the  water  sector,  Member  States  that  have 
decided  to  apply  the  Directive  in  the  field  of  water  already  had  significant  experience  with 
similar  private  participation  in  the  past.  Conversely,  some  Member  States  which  decided  to 
keep the water sector outside their national transposition measures had some record of private 
sector participation, notably Italy, Germany and Portugal. 

Since  April  2016,  there  is  more  transparency  regarding  concession  contracts  in  the  water 
sector.  According  to  TED,  there  have  been  around  225  concessions  award  notices  in  the 
period  2016  to  2021,  increasing  in  number  from  3  concession  award  notices  in  2016  to  66 
concession award notices in 2021. The vast majority of concessions (194) were concluded by 
French  contracting  authorities,  followed  by  authorities  in  the  Czech  Republic  (18),  Spain, 
Poland and Romania. 

The total value of concessions award notices as recorded in TED in the water sector amounted 
to almost EUR 7 billion between 2016 and 2021. Compared to the total value of concessions 

33  

The GWI Global Ultimate Owners database contains details of municipal water and wastewater treatment projects 
where all or part of the capital investment cost was borne by the private sector.  

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awarded  over  the  same  period  (EUR  377.5 billion),  the  value  of  concessions  in  the  water 
sector represents less than 2 %. Also, when compared to another important utility sector, the 
electricity  sector,  the  value  of  concessions  in  the  water  sector  represents  only  3.6 %.  The 
yearly total  value of the concession award notices in  the water sector increased in  the early 
years  of  the  Directive,  increasing  more  than  tenfold  between  2016  and  2018.  It  decreased 
slightly in the two following years, but the increase in 2021 compensated that decline. 

The average number of offers received per tender for concessions in the water sector and the 
SME participation were slightly lower than the average in other sectors. This can be explained 
by the fact that the water sector is highly specialised and highly capital-intensive compared to 
other  sectors.  Additionally,  the  concessionaire  needs  to  have  the  financial  capacity  to  bear 
upfront the total cost of investment as well as the operating risks. 

As regards cross-border participation, there seems to be a relatively high incidence of cross-
border participation in tenders through local, but foreign-owned subsidiaries. 

Most stakeholders are of the opinion that the current systems in place in the Member States 
work  well  and  support  the  exclusion  of  the  water  sector  from  the  scope  of  the  Directive. 
Invoking  examples  of  re-municipalisation  of  water  services,  they  argue  that  involvement  of 
the  private  sector  is  not  considered  necessary.  On  the  other  hand,  representatives  of  the 
business  sector  highlighted  their  positive  experiences  brought  about  by  the  Directive.  The 
overall  conclusion  was  that  the  choice  of  management  system  is  contextual  depending  on 
local  societal  factors  (operating  efficiency,  long-term  investment,  affordability,  water 
conservation, security of supply, public health, etc.).  

Due to limited data it is not possible to draw any firm conclusions yet regarding the impact of 
the Directive on the water sector. 

6. 

OUTLOOK  

The Commission is working to improve the functioning of the Directive, in particular through 
new initiatives on transparency and quality of data. 

Transparency  of  concessions’  tenders  and  results  it  is  key  to  meet  the  objectives  of  the 
Directive.  It  relies  on  quality  data  on  concessions  awarded  by  Member  States,  easily 
accessible  to  all  actors  in  the  internal  market.  The  Commission  is  planning  a  number  of 
actions  and initiatives  to improve transparency  and the overall quality of data  regarding the 
Directive and its implementation.  

On 16 March 2023 the Commission announced the creation of the Public Procurement Data 
Space  (PPDS)34.  PPDS  will  connect  European  databases,  including  TED  data  on  public 
procurement and concessions, and national procurement data sets available in national portals 
and will be at the core of the digital transformation of public procurement and concessions in 

34 

Communication from the Commission “Public Procurement: A data space to improve public spending, 
boost data-driven policy-making and improve access to tenders for SMEs”  (2023/C98I/01), OJ C 98I , 
16.3.2023, p. 1. 

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the  EU.  PPDS  will  allow  for  data-driven  policy  making.  Additionally,  public  buyers  will 
benefit  from  PPDS  through  better  planning  of  calls  for  tenders,  benchmarking  and 
knowledge-sharing,  increased  digitalisation,  easier  detection  of  fraud  and  collusion.  PPSD 
will  also  improve  access  to  calls  for  tender,  in  particular  for  SMEs.  Transparency  is  also 
central  to  the  EU  Publications  Office’s  Preparatory  Action  “Transparency  in  Public 
Procurement”35. The Publications office identified four areas of activity that revolve around 
TED  data:  availability,  quality,  readability  and  interoperability.  A  number  of  projects  are 
foreseen to contribute to implement the Preparatory Action. 

Additionally,  on  the  17th  of  April  2023  the  Commission  launched  the  Public  Buyers 
Community36. The Public Buyers Platform is an initiative to enhance collaboration in public 
procurement.  Public  buyers  can  benefit  from  the  exchange  of  knowledge  and  best  practices 
across  the  EU  instead  of  working  individually  on  complex  issues.  The  community  aims  to 
empower public buyers and those working in public procurement (buyers, suppliers, academia 
and other stakeholders) to join together and connect with the European Commission to foster 
the exchange of  cutting-edge market  intelligence and know-how on public procurement  and 
encourage joint action and systematic collaboration in public procurement. One of the aims of 
this collaboration is to improve SME’s access to public procurement and concession market.  

7. 

CONCLUSIONS 

The Directive has only been applied in all Member States for three years and therefore there is 
little information, preventing a fully-fledged comparison with the period prior to the existence 
of the Directive.  

At this stage, it seems too soon to conclude whether the Directive has achieved its objectives 
to  increase  legal  certainty  and  ensure  better  access  to  the  EU  concessions  market. 
Nevertheless a number of preliminary conclusions can be drawn, as summarized below. 

All  Member  States  have  transposed  the  Directive  and  have  put  in  place  monitoring 
authorities and structures to ensure correct and efficient implementation of the rules for 
the  award  of  concession  contracts.  Nevertheless,  unclear  interpretation  and  incorrect 
application of the rules are still detected by the vast majority of Member States.  

The Directive has also brought more transparency into the award process. The number 
of  concessions  published  has  gradually  increased  since  2016.  Although  the  highest  value 
concessions are mainly awarded without the publication of a contract notice, hence without a 
call  for  competition,  this  situation  can  be  explained  by  the  fact  that  those  concessions 
correspond  mainly  to  the  electricity  distribution  which,  in  certain  Member  States,  is 
characterised by the existence of special or exclusive rights or legal monopoly. Consequently, 
those awards do not raise concerns from the perspective of compliance with the Concessions 
Directive. 

35 
36 Homepage | Public Buyers Community (europa.eu) 

https://simap.ted.europa.eu/web/simap/preparatory-action-on-transparency-in-public-procurement. 

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Regarding  the  level  of  competition  for  concessions,  it  has  been  observed  that  the  Directive 
did  not  have  a  consistent  impact  on  the  level  of  participation  in  competitions  for 
concession contracts.  

Furthermore, despite  being  open to bidders  from other  Member States,  the EU concessions 
market  has  so  far  not  attracted  much  cross-border  participation.  This  situation  is  not 
specific  to  the  concession  market  but  rather  common  to  public  procurement  in  general  and 
varies greatly between Member States.  

The level of SME participation appears to have increased over the past 5 years, although 
the share of SMEs in the concession market is relatively low as compared to their share in 
the overall economy.  

Considering  the  importance  of  SMEs  to  the  EU  economy,  the  limited  evidence  available 
suggests  that  greater  focus  on  SMEs  in  the  context  of  concessions  awards  should  be  a 
priority for Member States and contracting authorities/entities. 

Regarding the water sector, the limited data from a handful of Member States also does not 
allow for drawing firm conclusions on the impact of the Directive on the broader water sector.  

The  Commission  has  recently  launched  several  initiatives,  such  as  the  Public  Procurement 
Data  Space,  the  Preparatory  Action  on  Transparency  in  Public  Procurement  and  the  Public 
Buyers  Platform  to  further  promote  transparency  and  quality  of  data  in  public  procurement 
and concession markets.  

With  time,  experience  gained  with  the  Directive  will  allow  to  make  more  detailed 
assessments. The next report to be prepared by the Commission should shed more light on the 
real impact of the Directive on the concession market.  

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