Download Bernard Wilson: Finding a PPP Partner Essential EU Law

Finding a PPP Partner
Essential EU Law Considerations
Bernard Wilson
Maribor, 18 January 2005
EU Law and National Law
• EU Law will govern the process of procuring the PPP
contract – there is no need to draw up specific national law
• The PPP contracts will be drawn up under the relevantnational law – more about the design of the contracts
tomorrow
Why is EU Law relevant?
• Slovenia has joined the EU and is now subject to EU Law
• EU law is intended to give practical effect to the “Common
Market”
• The Treaty (TEC) and rules made under the TEC are
relevant to PPP contracts
• EU Law can be enforced against Member States by the
Commission and by individuals through the European
Court of Justice
Key Elements of EU Law
• The Primacy of EU Law where there is Community
Competence
• Key Principles – the Four Freedoms
• The Treaty Provisions and Rules made under the Treaty –
Regulations, Directives, Decisions, Judgements
The Primacy of EU Law over Member
States Law
• The Member States own laws and requirements are the Treaties
and legislation made under the treaties has precedence.
• Some provisions have direct effect, Treaty Provisions and
Regulations. Other provisions must be incorporated into law by
the Member State.
• The Member State may have to pay compensation if it fails to
implement EU Law.
The Four Freedoms: What are they and
how do they affect PPP?
• Freedom from discrimination on grounds of Nationality
(Article 12).
• Free Movement of Goods (Article 28).
• Freedom of Establishment (Article 43).
• Freedom to provide Services (Article 49).
Relevant Treaty Provisions
• Article 80 - prohibition on certain contractual terms
• Article 81- prohibition on the abuse of a dominant position
• Article 87 - prohibition on State Aid
• Article 88 – obligation to notify State Aid
Competition Law
• Competition Law requires a fair and transparent
procurement process
• Competition Law may affect the design of the completed
contract (eg prohibitions in Article 80)
State Aid (1)
• The Directives only specify the
procedures to be followed in the award of
the contract. The terms of the contract
must comply with EU rules, in particular
the rules governing State Aid.
State Aid(2)
• State aid is support to those engage in economic activities
• Member States have a duty to notify Aid under Article 88(3)
TEC
• Commission has the power to order the suspension or
repayment of Aid
• Complying with the Procurement Rules means there is
unlikely to be a breach of State Aid rules
Rules Under the Treaty
• Consolidated Works Directive 93/37/EEC
• Consolidated Supplies Directive 93/26/EEC
• Services Directive 92/52/EEC
• Remedies Directive 89/665/EEC
• Utilities Directive 93/38/EEC
• Utilities Remedies Directive 92/13/EEC
New Directives
• Directive 2004/17/2004 co-ordinating the procurement
procedures of entities in the water, energy, transport and
postal services sectors
• Directive 2004/18/EC on the coordination of procedures for
the award of public works contracts, public supply contracts
and public service contracts
• Consolidate and simplify Rules
• Must be transposed in to local law by 31 January 2006
Why are the Directives important?
• The Directives apply to contracts in excess of specified
thresholds
• The Directives specify procedures to be followed in the
award of contracts: this has to be built into the design of the
process
• Failure to comply with the Directives may result in the
process being rules unlawful or claims for damages from
affected parties
Overiding Principles
• Even if the Directives do not apply to the particular case the
general provisions of the Treaty (the Four Freedoms) and
of the jurisprudence of the European Court of Justice may
do so. These are:
• Non-discrimination, equal treatment, transparency,
proportionality and mutual recognition.
Conclusion
• It is essential to comply with the Treaty Provisions and the
Procurement Rules
• Failure to comply can result in legal action from a
contractor or the Commission