Finding a PPP Partner Essential EU Law Considerations Bernard Wilson Maribor, 18 January 2005 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 relevant- national law – more about the design of the contracts tomorrow 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 relevant- national 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 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 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 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). 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 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) 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 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 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 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 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. 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 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