Community law on Public Procurement and Concessions to institutionalised PPP (IPPP)

In recent years, Public-Private Partnerships (PPP) have developed in many fields. The hallmark of this form of cooperation, which is generally geared to the longer term, is the role of the private partner, who is involved in the various phases of the project (planning, implementation and operation), who is intended to bear risks that are traditionally borne by the public sector and who often contributes to financing the project.

Under Community law, public authorities are free to pursue economic activities themselves or to assign them to third parties, such as mixed capital entities founded in the context of a PPP. However, if public bodies decide to involve third parties in economic activities and if this involvement qualifies as a public contract or a concession, the Community provisions for public procurement and concessions must be complied with. The aim of these provisions is to enable all interested economic operators to tender for public contracts and concessions on a fair and transparent basis in the spirit of the European internal market, thereby enhancing the quality of such projects and cutting their costs by means of increased competition.

The public consultation on the Green Paper on Public-Private Partnerships and Community law on public contracts and concessions showed that there was considerable need for clarification on the application of these rules to so-called ‘institutionalised’ PPP (IPPP). IPPP are understood by the Commission as a co-operation between public and private parties involving the establishment of a mixed capital entity which performs public contracts or concessions. The private input to the IPPP consists — apart from the contribution of capital or other assets — in the active participation in the operation of the contracts awarded to the public-private entity and/or the management of the public-private entity. Conversely, simple capital injections made by private investors into publicly owned companies, do not constitute IPPP and are therefore not covered by the present Communication.

IPPP  In practice and creation process

  • Either by founding a new company, the capital of which is held jointly by the contracting entity and the private partner — or, in certain cases, by several contracting entities and/or several private partners — and awarding a public contract or a concession to this newly founded public-private entity, Or,
  • By the participation of a private partner in an existing publicly owned company which has obtained public contracts or concessions ‘in-house’ in the past.

Information about the project

If the public task connected with the setting up of an IPPP falls within the scope of the Public Procurement Directives, or of sector-specific Community rules providing for public procurement obligations, special requirements for publication must be complied with. With regard to other public contracts and to service concessions, the principles of transparency and equal treatment arising from the EC Treaty require potential bidders to have equal access to suitable information about the intent of a contracting entity to set up a public-private entity and to award it a public contract or a concession. Suitable information can best be guaranteed by publicising a notice that is sufficiently accessible to potentially interested parties before the private partner is selected.