Select Committee on European Union Fortieth Report


PUBLIC-PRIVATE PARTNERSHIPS (12303/05)

Letter from the Chairman to John Healey MP, Economic Secretary, HM Treasury

  Sub-Committee B considered this document at its meeting on 6 February 2006 and decided to hold it under scrutiny.

  Members noted that the Commission is floating the idea of greater certainty (and competition) where Member States use PPPs. Your Explanatory Memorandum makes it clear that the Government favour competition but not legislation in this area. What steps are you taking to ensure that this view is communicated to the Commission?

  Your Explanatory Memorandum states that action at Community level is appropriate. I would be grateful if you could explain why it is appropriate. This does not seem to tally with your later explanation that separate legislation in this area would create legal uncertainty. Your Explanatory Memorandum does not address the issue of proportionality—do you believe that the Proposals contained in this document are proportionate?

9 February 2006

Letter from John Healey MP to the Chairman

  Thank you for your letter following Sub-Committee B's consideration of the Explanatory Memorandum 12303/05 COM(2005) 569 on Public Private Partnerships and Community Law on Public Contracts and Concessions Final. I understand that you are concerned and unclear on the UK Government's position on the Commission's proposal for separate legislation in the area of concessions, and are therefore holding the EM under scrutiny.

  Our position on the Commission's proposal for separate legislation in the area of concessions is clear; we do not support this proposal. Separate legislation would result in a resource intensive task with compliance burdens for businesses, reducing the very competitive market appetite that the Commission is trying to promote. However, we do recognise that service concessions are currently outside the existing procurement framework, creating legal uncertainty around Community rules governing the award of a concession. We believe that this can be remedied by amending the existing public procurement directives (2004/18/EC) rather than the Commission's proposal of separate legislation, and hence the EM comment that "action at Community level is appropriate".

  These views have been conveyed at the Commission's Advisory Committee on Public Contracts, which is attended by the Office of Government Commerce (OGC).

11 May 2006

Letter from the Chairman to John Healey MP

  Thank you for your letter of 11 May, replying to my letter of 9 February. Sub-Committee B considered your letter at its meeting on 22 May.

  We were grateful to you for clarifying the Government's view that, whilst Community action is appropriate in this area, the Government is opposed to new legislation and would prefer to see an amendment of the existing procurement framework to create legal certainty on service concessions.

  In the light of the potentially serious implications separate, burdensome legislation could have for competition in the UK, we will maintain scrutiny on this proposal. We would be grateful for any further updates as negotiations progress.

23 May 2006



 
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