On 23 May 2017, the Concessions Directive (2014/23/EU) was finally implemented into Irish law, over a year after the Public Contracts Directive (2014/24/EU) and the Public Utilities Directive (2014/25/EU) were transposed. The European Union (Award of Concession Contracts) Regulations 2017 (S.I. 203/2017) (the “Regulations”) are retrospective in effect, meaning that the new regime is deemed to have taken effect from April 2016 (when the Directive should have been implemented). This could raise some questions about recently procured concession arrangements and the applicability of the new regulations.

For the first time, service concessions will be regulated alongside works concessions. (Previously, service concessions were excluded from the application of the procurement directives and only regulated through the application of the EU Treaty principles while works concessions were subject to some limited rules under the old classic directive).

What is a concessions contract?

A concessions contract is a contract of the same type as a public service or public work contract except for the fact that the consideration for the provision of the services or the works consists either solely in the right to exploit the service or works or in this right together with payment. As a result, any risk associated with the contract generally transfers to the concessionaire.

Key features of the Regulations:

  • The Regulations apply to both contracting authorities and utilities;
  • The Regulations apply only to works and services concessions that have a value equal to or greater than €5,225,000. (If the estimated value of a concession does not reach this threshold, its award is governed by the general EU Treaty principles (i.e. the principles of transparency and equal treatment etc.)
  • The duration of a concession must be limited, although it does not lay down a maximum duration. It does clarify that the contract period is not to be unduly lengthy, with a view to preventing market closure and restriction of competition.
  • Publication of a concession notice is required in the Official Journal of the European Union (OJEU).
  • The Regulations provide for exclusionary grounds relating to consumption non-payment of tax, criminal activity and so in a similar way to the Public Sector Regulations concession contracts in Ireland have been used in the area of public private partnerships and would be a welcome more flexible method to provide large-scale complex infrastructure projects which involve here projects public and private expenditure.
  • There are no standard mandatory award procedures but certain general guarantees are included which aim at ensuring transparency and equal treatment.
  • The regulations make some minor amendments to the 2016 Public Authority Contracts Regulations and the Utilities Regulations.