12/20/2011, Berlin

Proposal for a Directive of the EU Commission on service concessions:

New EU legislation on concessions not necessary

Existing rules on concessions are sufficient / EU Commission should take the European Parliament's negative vote into consideration

"The European Commission's plans (published today) on obligatory invitation to tender for service concession contracts would limit the freedom of action of municipalities and thus affect Article 28 of the German Basic Constitutional Law. Together with the European Parliament and the German Bundesrat we consider that the Commission's initiative is not necessary. The existing rules are sufficient. Already in May 2010, the European Parliament spoke out against an initiative in terms of service concessions across all political groups. We believe that this democratic will should be respected by the European Commission", Martin Weyand, General Executive Manager of the Water/Wastewater Division of the German Association of Energy and Water Industries (Bundesverband der Energie- und Wasserwirtschaft BDEW) said on the EU COmmission's Proposal for a Directive on the legal regulation of the award of services concessions published today. With its proposal, the European Commission omits the European Parliament which considered the law in force and the previous jurisdiction of the European Court of Justice (ECJ) as a sufficient basis for the award of service concession contracts.

The Commission’s proposal would lead to considerably tightened up regulations for the award of service concession contracts in the water and energy sectors. Especially for the water sector, services in terms of drinking water supply shall thus either fall into the regulatory scope of the Directive on the award of service concession contracts or be treated as public service contracts according to the even stricter procurement regulations under the EU public procurement Directives.

"More extensive EU regulations would not lead to an increase in legal certainty but at most to legal acts on the award of service concession contracts. This would give rise to an unreasonable limitation of the organisational scope of action of municipalities which has proven to be effective in the past. It is essential to maintain the municipal freedom of action in its present form", Weyand required. The high German quality standard holding a top position in Europe is attributable to this municipally secured water supply and wastewater disposal which nevertheless shows a great variety of structures.

A legal opinion commissioned by BDEW had clearly come to the conclusion that European legislation on service concession contracts was not required in principle. „The experts submitting the legal opinion considered that the essential principles in terms of service concessions are determined in a clear-cut and binding manner by the current EU legislation and the relevant decisions of the European Court of Justice ", Weyand explained.

BDEW underlined that the European Court of Justice already declared essential principles of the existing EU Community law to be applicable. These principles particularly refer to fundamental issues like transparent procedures for the award of service concessions and the exclusion of a discrimination of bidders applying for a concession.


Jan Ulland
Pressesprecher / Press Spokesman