16 Public-private partnerships and public
contracts and concessions
| (25648)
9206/04
COM(04) 327
| Commission Green paper on public-private partnerships and Community law on public contracts and concessions
|
| Legal base | —
|
| Document originated | 30 April 2004
|
| Deposited in Parliament | 12 May 2004
|
| Department | HM Treasury
|
| Basis of consideration | EM of 25 May 2004
|
| Previous Committee Report | None
|
| To be discussed in Council | Not known
|
| Committee's assessment | Politically important
|
| Committee's decision | Cleared, but relevant to the debate on services of general interest in European Standing Committee C; further information awaited
|
Background
16.1 The Commission has twice mentioned its intention to publish
a Green Paper on public-private partnerships and Community law
on public contracts and concessions — in its Strategy
for the internal market: Priorities 2003-2006 and in its Communication,
A European initiative for growth: Investing in networks and
knowledge for growth and jobs.[29]
There were also requests to the Commission for such a paper during
the consultations on its Green Paper on services of general interest.[30]
The document
16.2 The Green Paper is intended by the Commission to initiate
a consultation on the application of Community legislation on
public contracts and concessions to public-private partnerships
(PPPs). It is not concerned with the decision to contract out
public services or retain them in the public sector; the Commission
says such a decision remains squarely within the competence of
the public authorities of Member States.
16.3 In the document the Commission first rehearses
the characteristics and recent history of PPPs and identifies
issues for discussion, including those related to the internal
market freedom of establishment and freedom to provide services.
For the purposes of discussion it then divides PPPs into two
categories: contract-based PPPs — both public works contracts
and concessions — and "institutionalised PPPs"
— which establish joint ventures between public and private
partners. The UK's private finance initiative contracts are an
example of the former and the National Air Traffic Service is
an example of an institutionalised PPP.
16.4 For both categories of PPPs the Commission asks
respondents to describe their experiences on a wide range of issues.
Specifically on contract-based PPPs, the Commission seeks responses
on:
- the Commission's view that
a "competitive dialogue" procedure, allowing contracting
bodies to open dialogue with bidders on the solution they propose,
is well adapted to the award of public contracts and safeguards
the rights of economic operators;
- whether Community legislation to regulate the
procedure for awarding concessions and to make all contractual
PPPs subject to identical award rules is desirable;
- whether clauses covering changes made during
the operation of a PPP and the sub-contracting of work to third
parties have a potential discriminatory effect justifying more
detailed Community rules; and
- whether implementation of "step-in"
rights by financial institutions to replace failing contractors
may present transparency and equal treatment problems justifying
clarification of the Community's contractual framework.
16.5 In relation to PPPs involving the establishment
of a joint public and private sector body, the Commission notes
that the law on public contracts and concessions does not apply
to the creation of a mixed-capital entity, but that the transfer
of tasks to such an entity should comply with the rules and principles
arising from such law. The Commission asks respondents whether
Community action is required to clarify or define the obligations
of contracting bodies in the creation of such PPPs.
16.6 Finally the Commission asks respondents whether
the Commission should establish a network, for both categories
of PPPs, to exchange information on best practice and other matters.
The Government's view
16.7 The Financial Secretary to the Treasury (Ruth
Kelly) says:
"The UK supports the increased use of PPPs in
both national and Trans-European infrastructure delivery, where
the use of private finance can offer better value for money than
conventional public investment. Consequently the UK is keen to
see that the right conditions for the development and implementation
of PPPs are in place, and would welcome removal of any unnecessary
obstacles to PPP procurement.
"The most favourable conditions for the further
development of PPPs in investment and service delivery include
a transparent procurement framework and the flexibility to deal
with innovative or complex approaches. The UK feels that the
existing public procurement rules largely meet these needs, and
would be concerned to see that any reform did not disrupt the
procurement process of existing national PPP programmes."
She adds that the Green Paper has no direct financial
implications and that, following its own consultations, the Government
will be responding to the Commission's request for comments by
the deadline of 30 July 2004.
Conclusion
16.8 This Green Paper opens a debate with important
implications for UK interests. We clear the document, but we
should be grateful if the Minister would let us have in due course
the Government's response to the Commission.
16.9 We note that this document is relevant to
the debate we have recommended on the White Paper on services
of general interest in European Standing Committee C.[31]
29 (24520) 9250/03; see HC 63-xxv (2002-03), para 12
(18 June 2003) and (25060) 14893/03; see HC 42-ii (2003-04), para
13 (9 December 2003). Back
30
See para 1 of this Report. Back
31
Ibid. Back
| 
