A dispute has arisen over a contract concluded in 2008 between the German State of Saxony-Anhalt and a private investor for the purchase of land, upon which the investor would construct a tax administration building. The contract was valued at €7.4 million. The European Commission (Commission) argues, in a reasoned opinion, that the agreement was a public works contract and should have gone out to tender under the public procurement rules. The German Government claims that the main subject of the contract was not the construction of the administration building but the purchase of land which would put it outside the scope of the procurement rules. The Commission rejects the view that the land purchase was the main object of the transaction since the value of the works is considerably greater than the value of the land itself. An added complication is that the investor originally bought the land from a private owner with the intention of carrying out the works. Germany has two months to respond to the Commission’s concerns after which, the Commission may decide to refer the matter to the European Court of Justice.
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Land purchase or public works contract?
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