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BackAccording to experts at a hearing in the European Parliament, at European level, water supply and disposal, district heating, energy services, refuse collection, social and health care services as well as culture and education are often provided within the scope of so-called service concessions. Now a new legal framework will be set up for contracts, concluded between the public sector and private companies. However, the legislative proposal, which the European Commission has published on this matter, is met with strong criticism both by the bodies affected as well as by the European Parliament.MEP Philippe Juvin of the European People’s Party and rapporteur on this issue welcomes the foray of the Commission. He is currently observing great legal uncertainty - there have been 25 decisions of the European Court of Justice on the concessions since 2000 alone - the new proposal would eradicate any uncertainties and bring stability. The new regulation would also result in more competition and more modern infrastructures, commented Juvin. In order to achieve this goal, one would need a clear definition as to what concessions actually were. The rules had to be simple and transparent demands MEP Juvin. It had to be recognised that the public sector was able to carry out services itself (so-called in-house activities). However, he is clearly opposed to the arbitrary determination that an in-house activity existed if the public sector would carry out the service to an extent of at least 90 % itself. The Conservative rapporteur concludes that the Commission proposal would definitely entail an added value.
The lobbyists and experts invited to the hearing on service concessions are not very convinced.
The representative of the European Institute of Public Administration (EIPA), Michael Burnett comments in his introductory remarks that the Directive was clearly not concerned with the freedom of the public sector to decide how it wanted to organise public services. One should not overlook the fact that a lot of money was also involved in respect of the services concerned. Apart from that, Burnett also emphasised that service concessions also played a big part with regard to Public Private Partnerships - 60 % of PPPs would be service concessions. In his opinion, subsidiarity and the freedom of public authorities would not be infringed. He believes that the best approach would be to submit public procurement contracts and the service concession to the same and not to different regulations as it had now been proposed.
Rainer Plassmann of the European Centre of Employers and Enterprises providing Public services (CEEP) shows little enthusiasm for the Commission proposal: the members of his organisation were still looking for reasons why the Commission had published such a complex and detailed proposal. In his opinion, the only benefits of the legislative proposal were more legal certainty and subsidiarity. The Commission had tried to find flexible procedures, and it had been quite successful, says Plassmann. The in-house regulation too had been a great achievement. However, the far too broadly described definition of service concessions would be a problem. In contrast, the exemptions from the scope of the Directive were too narrowly defined. The generous definition of service concessions included among other also social services, health care services, water supply and disposal, refuse collection or educational services, which he regards as extremely problematic. For example, Austria and Germany were strictly opposed to water supply and disposal being provided by private companies, as water is regarded as a public good. Italy, in turn was clearly in favour of involving private companies. A regulation, which would include energy services, would deprive communities of pursuing an energy policy. The intended contract duration had also to be discussed. It should be emphasised that public authorities should retain the freedom to decide whether services should be publicly tendered or carried out in-house, says Plassmann.
Martin Weyand of the German Association of Energy and Water Industries regards the jurisdiction for the concessions and the primary law as being sufficient. In Germany, water is a service of general interest. All work is carried out by local authorities. He worries that the aimed at regulation and the competition associated with it, would result in a deterioration of the water quality. Apart from that, the text was so complicated that any tender would take a lot of time, apart from being very expensive. This would also concern thousands of jobs, which were discussed here. The proposed rules would not result in a decision autonomy for the authorities.
Stéphane Saussier, Professor of Business Economics and Public Policy at the Sorbonne Business Graduate School, emphasises that a regulation of concessions would require a scope of discretion; however, he is not able to see this scope. Apart from that, it had to be possible to renegotiate concessions. Empirical evidence would show that it was often necessary to adjust a contract to new conditions, which only became evident after the contract had been concluded. The Directive should be as simple as possible; hence the contract duration also had to be reconsidered.
The rapporteur, MEP Juvin gets het up about Saussier saying that the autonomy of authorities would be in danger - in his opinion, this had not been written anywhere. EU representative Pier Antonio Panzeri of the Social Democrats wants a flexible framework, which gives public authorities scope of discretion, as suggested by the experts. One also had to look at and take into account the traditions in the individual Member States. The Liberal MEP Cristian Silviu Buşoi points out that different sectors had different worries. However, he decidedly does not agree that there was no requirement for the Directive. The Green MEP Heide Rühle remarks that the current regulation had not brought any benefits, in spite of the original promises. Following information provided by the experts, Rühle regards it as necessary to rewrite a large part of the Directive.
Hence, the discussion on service concessions remains exciting. The draft report of the European Parliament should be available by the end of March. The Committee will vote on the Report and any Amendment Proposals after the summer recess.
The lobbyists and experts invited to the hearing on service concessions are not very convinced.
The representative of the European Institute of Public Administration (EIPA), Michael Burnett comments in his introductory remarks that the Directive was clearly not concerned with the freedom of the public sector to decide how it wanted to organise public services. One should not overlook the fact that a lot of money was also involved in respect of the services concerned. Apart from that, Burnett also emphasised that service concessions also played a big part with regard to Public Private Partnerships - 60 % of PPPs would be service concessions. In his opinion, subsidiarity and the freedom of public authorities would not be infringed. He believes that the best approach would be to submit public procurement contracts and the service concession to the same and not to different regulations as it had now been proposed.
Rainer Plassmann of the European Centre of Employers and Enterprises providing Public services (CEEP) shows little enthusiasm for the Commission proposal: the members of his organisation were still looking for reasons why the Commission had published such a complex and detailed proposal. In his opinion, the only benefits of the legislative proposal were more legal certainty and subsidiarity. The Commission had tried to find flexible procedures, and it had been quite successful, says Plassmann. The in-house regulation too had been a great achievement. However, the far too broadly described definition of service concessions would be a problem. In contrast, the exemptions from the scope of the Directive were too narrowly defined. The generous definition of service concessions included among other also social services, health care services, water supply and disposal, refuse collection or educational services, which he regards as extremely problematic. For example, Austria and Germany were strictly opposed to water supply and disposal being provided by private companies, as water is regarded as a public good. Italy, in turn was clearly in favour of involving private companies. A regulation, which would include energy services, would deprive communities of pursuing an energy policy. The intended contract duration had also to be discussed. It should be emphasised that public authorities should retain the freedom to decide whether services should be publicly tendered or carried out in-house, says Plassmann.
Martin Weyand of the German Association of Energy and Water Industries regards the jurisdiction for the concessions and the primary law as being sufficient. In Germany, water is a service of general interest. All work is carried out by local authorities. He worries that the aimed at regulation and the competition associated with it, would result in a deterioration of the water quality. Apart from that, the text was so complicated that any tender would take a lot of time, apart from being very expensive. This would also concern thousands of jobs, which were discussed here. The proposed rules would not result in a decision autonomy for the authorities.
Stéphane Saussier, Professor of Business Economics and Public Policy at the Sorbonne Business Graduate School, emphasises that a regulation of concessions would require a scope of discretion; however, he is not able to see this scope. Apart from that, it had to be possible to renegotiate concessions. Empirical evidence would show that it was often necessary to adjust a contract to new conditions, which only became evident after the contract had been concluded. The Directive should be as simple as possible; hence the contract duration also had to be reconsidered.
The rapporteur, MEP Juvin gets het up about Saussier saying that the autonomy of authorities would be in danger - in his opinion, this had not been written anywhere. EU representative Pier Antonio Panzeri of the Social Democrats wants a flexible framework, which gives public authorities scope of discretion, as suggested by the experts. One also had to look at and take into account the traditions in the individual Member States. The Liberal MEP Cristian Silviu Buşoi points out that different sectors had different worries. However, he decidedly does not agree that there was no requirement for the Directive. The Green MEP Heide Rühle remarks that the current regulation had not brought any benefits, in spite of the original promises. Following information provided by the experts, Rühle regards it as necessary to rewrite a large part of the Directive.
Hence, the discussion on service concessions remains exciting. The draft report of the European Parliament should be available by the end of March. The Committee will vote on the Report and any Amendment Proposals after the summer recess.