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Renegotiation of Concessions is the Rule, Not the Exception

Posted on 24 April 2012

Un bon résumé de l'audition publique au Parlement Européen concernant le projet de directive concessions à laquelle j'ai eu le plaisir de participer en tant qu'expert.


On 21 March, ESPO participated in a public hearing on concessions organised by the esponewsmarch2012_rapporteur philippe juvinCommittee on Internal Market and Consumer Protection (IMCO) of the European Parliament. The hearing was held to compare views of industry stakeholders and academic experts on the Commission’s recent proposal for a Directive on the awarding of concessions. This proposal is part of a broader package reviewing public procurement legislation and aims to clarify the legal framework that governs the awarding of service concessions.

Ports are covered by the scope of the proposal, but the extent to which contracts between port authorities and service providers are affected is not clear at the moment. “Especially for contracts that involve the allocation of port land you would have to assess each individual contract to find out whether it is a concession according to EU law or not”, ESPO Secretary General Patrick Verhoeven told MEPs, “This is not a good situation to be in.” In his statement, he further underlined the need for transparency requirements to be proportional and to allow flexibility in modifying contract arrangements, including prolongations where appropriate. “The port sector is a very dynamic one”, Patrick Verhoeven said, “and we feel that the procedural requirements contained in the current proposal could hamper continuity of investment. Whilst we do see the potential added value of a common framework to achieve legal certainty and a level playing field, our final verdict on this proposal depends very much on whether Parliament and Council will be able to make it more proportional.”

Other stakeholders and experts confirmed that the current proposal was too heavy-handed and too close to public procurement, a criticism that several MEPs voiced as well. Especially possibilities to modify concessions during their contract term were seen as being too restrictive. “Renegotiation of concessions is the rule, not the exception”, Prof Stéphane Saussier of the Sorbonne University said. He and most MEPs present however did agree there is a clear need for selection procedures and criteria to be very transparent. In his closing remarks, IMCO Rapporteur Philippe Juvin (EPP/FR) (photo) emphasised that concessions need flexibility, which is why they cannot be treated in the same manner as public procurement contracts. Given their long duration, concessions furthermore need to be easily renegotiable. Mr Juvin however refuted the criticism of some stakeholders that there would be no need for a Directive and that case-law would be sufficient. “As an MEP, I prefer to settle matters through legislation, rather than depending on the decision of the courts”, the Rapporteur said. Mr Juvin will finish his report by the end of April. The deadline for amendments in Committee was set to 21 June. Vote is expected in autumn.

The Directive is meanwhile also being discussed at working group level in Council. Reportedly, a number of Member States, including Germany, Austria, the Netherlands, France and Portugal would be highly critical of the proposal. Countries in south and east Europe would be more favourable. The proposal will be formally discussed at the next Competitiveness Council, which is scheduled for 30 May. Council and Parliament aim to conclude the legislative process in one reading, by the end of this year.


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