Private operators concerned about derogations from in-house rule
By Sophie Mosca | Thursday 06 December 2012
Discussions are advancing on the question of public-public partnerships in the context of revision of the public procurement directives and the new draft directive on concessions. But they are not going in the right direction, claim private operators that provide works or services to public entities, who look poorly on the possibility of partnerships of public entities being given further exemptions from public procurement rules. They say this would run counter to Court of Justice case law and the principle of free competition guaranteed by the treaties.
The Forum européen des entreprises générales, which represents several federations of construction firms in the EU, and a group of European sector-based federations and national employers’ organisations have decided to sound the alarm (see interview). In two letters sent almost concomitantly, they submit their concerns to the Council and Parliament on what they consider an unfair approach.
According to these operators and organisations, only entities that are wholly owned by a public authority or public body should be eligible for exemption from public procurement rules.
They are vehemently opposed to the compromise amendments to Parliament’s report and Coreper’s suggestions of lowering this threshold to 80%. They are also opposed to the level of 15% or even 20% of the turnover of semi-public entities that would enable them to encroach on the private sector, whereas they have advantages in terms of management costs and infrastructure charges, making competition “very unequal”. Pierre-François Kuhn, secretary-general of E3PO, an organisation that signed the joint letter from the European sector-based federations and the national employers’ organisations, said that it would be “virtually impossible to check compliance with these thresholds; it would take an army of inspectors”. He added that these levels “are not based on any impact study, do not have a clear basis and would be easy to circumvent”.
According to the private operators, geographical limits on the power of such entities would have to be added: they should be restricted to the territory of the public authority that created them, which is not in the directives. In France, local public companies are limited to a given geographical jurisdiction. Some of these very powerful entities could therefore participate in public procurement in areas outside their geographical area, under more advantageous conditions than those of “local” candidates, thus depriving SMEs of public contracts vital to their activity. Large groups are also subject to competition from such entities, although they cannot compete with these semi-public enterprises in their areas of activity, added Kuhn.