Econord SpA v Comune di Cagno and Others.
Date: 2012-11-29
25. According to well-established case‑law, a contracting authority, such as a local authority, is exempted from initiating a procedure for the award of a public contract where it exercises over the successful tenderer control similar to that which it exercises over its own departments and the tenderer carries out the essential part of its activities with the contracting authorities to which it belongs ( Teckal , paragraph 50). It is common ground that that case‑law, initially adopted for the purposes of the interpretation and application of Council Directive 93/36/EEC of 14 June 1993 coordinating procedures for the award of public supply contracts (OJ 1993 L 199, p. 1), is also applicable to procedures for the award of public works contracts and public service contracts.
26. It should also be noted that, according to the Court’s case‑law, the question whether it is a service concession or a public service contract and, in the latter case, whether the value of the contract reaches the threshold provided for under the EU rules has no effect on the Court’s answer to the question referred for a preliminary ruling, given that the exception to the application of the rules of EU law where the ‘similar control’ conditions are fulfilled is applicable in all those situations (see, to that effect, Case C‑573/07 Sea  [2009] ECR I-8127, paragraphs 31 to 40).
27. According to settled case‑law, there is ‘similar control’ where the entity in question is subject to control enabling the contracting authority to influence that entity’s decisions. The power exercised must be a power of decisive influence over both the strategic objectives and the significant decisions of that entity ( Parking Brixen , paragraph 65; Coditel Brabant , paragraph 28; and Sea , paragraph 65). In other words, the contracting authority must be able to exercise a structural and functional control over that entity ( Commission  v Italy , paragraph 26). The Court also requires that this control should be effective ( Coditel Brabant , paragraph 46).
28. According to the case‑law, where use is made of an entity jointly owned by a number of public authorities, the ‘similar control’ may be exercised jointly by those authorities, without it being essential for such control to be exercised individually by each of them (see, to that effect, Coditel Brabant , paragraphs 47 and 50, and Sea , paragraph 59).
29. It follows that, if a public authority becomes a minority shareholder in a company limited by shares with wholly public capital for the purpose of awarding the management of a public service to that company, the control that the public authorities which are members of that company exercise over it may be categorised as similar to the control they exercise over their own departments when it is exercised by those authorities jointly ( Sea , paragraph 63).
30. In those circumstances, although, where a number of public authorities make use of a common entity for the purposes of carrying out a common public service task, it is certainly not essential that each of those authorities should in itself have an individual power of control over that entity, nevertheless, if the very concept of joint control is not to be rendered meaningless, the control exercised over that entity cannot be based solely on the controlling power of the public authority with a majority holding in the capital of the entity concerned.
31. Where the position of a contracting authority within a jointly owned successful tenderer does not provide it with the slightest possibility of participating in the control of that tenderer, that would, in effect, open the way to circumvention of the application of the rules of EU law regarding public contracts or service concessions, since a purely formal affiliation to such an entity or to a joint body managing it would exempt the contracting authority from the obligation to initiate a tendering procedure in accordance with the EU rules, even though it would take no part in exercising the ‘similar control’ over that entity (see, to that effect, Case C‑231/03 Coname [2005] ECR I-7287, paragraph 24).