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IP/05/555

Brussels, 12 May 2005

Public procurement: consultation shows need for clarification of EU rules on public-private partnerships

The European Commission has published a report on the results of a consultation on public-private partnerships (PPPs) that was launched in April 2004 (IP/04/593). The aim of the consultation was to help assess if there is a need to improve EU law in this area. A majority of stakeholders asked for clarification of EU public procurement rules that apply to the selection of private partners for PPPs. Opinion was divided on the form and the precise content of the EU initiatives required. The report is available at: http://ec.europa.eu/internal_market/ppp

Internal Market and Services Commissioner Charlie McCreevy said: “The number of responses received confirms the growing importance of public-private-partnerships. PPPs are now widely used in large infrastructure projects and public services, and can make a major contribution to the growth of the EU economy. The Commission needs to ensure that the selection of private partners is transparent and that there is fair competition, not least because it is those principles which ensure value for money for taxpayers. The consultation revealed many arguments both for and against EU initiatives in this area. We will consider all these views and report on possible next steps before the end of 2005.”

Responses

The Commission received 195 contributions from: public authorities, including 16 Member State governments; associations of private and/or public entities; private and public enterprises; and individuals. A high proportion of contributions came from Germany, France, UK, Austria and Italy.

A clear majority supported an EU initiative, legislative or non-legislative, on concessions that are currently not subject to the detailed EU public procurement rules, in order to clarify both the term ‘concessions’ and the rules applicable to their award.

Many respondents asked how EU rules should apply to the choice of private partners in “institutionalised PPPs”, which are public service undertakings held jointly by both a public and a private partner.

In particular, respondents asked about the difference between ‘in-house’ and third-party entities. EU law on public contracts and concessions applies when a contracting body entrusts a task to a third party, unless the relation between the two is so close that the latter is equivalent to an ‘in-house’ entity. In general, public-sector respondents argued for widening the definition of ‘in-house’, while the private sector wished to maintain its limited scope as confirmed by the European Court of Justice (Stadt Halle C-26/03).

Next steps

The Commission plans a Communication before the end of 2005. Possible measures to increase fair competition include legislation, interpretative communications, initiatives to improve the coordination of national practice and exchange of good practice between Member States. The Communication will indicate the Commission’s preferences.

Background

Public-private partnerships (PPPs) are forms of cooperation between public authorities and businesses to meet needs in the general interest. They involve complex legal and financial arrangements for carrying out infrastructure projects or providing services for the public. These partnerships are widely used within the EU, in particular in transport, public health, education, public safety, waste management and water distribution.


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