On 17 May 2017, the Commission of the European Union announced its decision to refer Italy to the EU Court of Justice on the grounds of Italy’s failure to fulfil its obligations under EU public procurement rules, with particular reference to the provisions of Directive 2004/18/EC14.

The dispute concerns the extension of 18 years to the concession contract granted to the company Autostrada Tirrenica S.p.A. (hereinafter, SAT), already in charge of the construction and management of the A12 motorway Civitavecchia-Livorno. The original concession granted to SAT in 1969 for the construction of the Livorno-Civitavecchia motorway had a duration of thirty years. Despite SAT’s failure to comply with the obligations assumed under the original concession - clearly represented by the realization of only 56 km of the 242 km of road surface envisaged - the concession has been first extended until 2028 and then until 2046.

The alleged breach of the European Union law is represented by the fact that no public tender was launched for the awarding of a new concession when the original one expired in 1999.

The EU Commission had already opened an infringement procedure against Italy in 2009 but then closed the case in consideration of the commitments made by the competent Italian national authorities to comply with the EU regulatory framework for public procurement procedures.

Having noted that Italy failed to fulfil the commitments made in 2009, the EU Commission decidedto open a new infringement procedure (No 4011/14) in 2014, urging Italy to remedy the breach of EU law within two months. The Commission established the infringement of Articles 215 and 5816 of Directive 2004/18/EC (the Directive in force at the time the infringement procedure was opened), which laid down, respectively, the obligation of contracting authorities to «treat economic operators equally and non-discriminatorily», to act « in a transparent way» (Article 2) and to publish notices of public works concessions.

In particular, Article 58 provided that the authorities, which wish to award a public works concession contract shall make known their intention by means of a notice containing in particular information concerning: (i) the place of execution and the nature and extent of the services as well as the general characteristics of the works; (ii) economic and technical conditions to be met by the contractor; (iii) criteria to be applied in the award of the contract.

Nevertheless, formal notices were to be sent to the EU Commission for verification and only subsequently could be published at national level with the obligation, for the contracting authority, to repeat at national level the exact content of the formal notice sent to the Commission.

The assumption from which the Commission has put forward the possible conflict with European law is that the granting of a time extension for an existing concession is equivalent to the awarding of a new concession, and for such reason it should follow a public procurement procedure.

Still in the Commission's view, the issue must be tackled and resolved at European level since the topic has a particular importance. Indeed, «motorway concessions» should be considered as «a strategic public service representing large investments that have a significant impact on the national economy»17.

Moreover, the Commission maintained that the Italian Government, by replying to the  Commission’s reasoned opinion with a further supplementary deed amending the SAT concession – whereby the duration of the concession was reduced only by three years and the entire work was to be entrusted to third parties18 - confirmed the doubts that the extension was not a mere infringement of EU competition principles but was intended to circumvent said principles.

Since the Commission decided to refer the matter to the Court of Justice, now it will be up to the latter to verify and establish whether Italy has infringed the European Union law.

If the infringement of EU law may be somehow grounded on the provisions of the successiveDirectives regulating the matter, attention should be drawn to the transposition of the principle of prohibition of extension within the Italian legal system as well as within the decisions of the competent judicial authorities.

Indeed, some confusion in said two areas cannot be hidden.

It is true that the previous Code of Public Contracts (Legislative Decree 163/2006), adopted for the transposition into the national legal system of Directive 2004/18/EC, has embraced Articles 2 and 58 of said Directive, whose provisions, according to the EU Commission, were breached by the temporal extensions of the concession granted to SAT. From the foregoing, it may be conclude that, in the period in which the infringement allegedly occurred, the Italian reference law was identical to the European one. Therefore, the extension of the concession, before infringing EU law, has infringed national law.

It is also true that Article 23 of Italian Law 62/200519, by means of a general provision, establisheda significant exception: «Contracts for purchases and supplies of goods and services that have expired or will expire in the six months following the date of entry into force of this Law, may be extended for the time necessary for the conclusion of new contracts following public tenders, provided that the extension does not, however, exceed six months and that the notice of invitation to tender is published no later than 90 days from the date of entry into force of this law».

Therefore, a form of extension (the so-called technical extension) could be considered as permitted even if limited to public contracts for purchases and supplies of goods and services.

The same confusion can be found in the relevant case-law guidelines.

For the sake of completeness, it should be noted that the extension of a concession is deemed incompatible with the current regulatory framework by the Council of State, which states: «as regards renewal or extension of public service contracts there is no room for the contractual autonomy of the parties because the mandatory principle applies, laid down by the legislature for reasons of public interest, on the strength of which (...) the Administration, once the contract has expired, must, if the same kind of performance is still required, launch a new public tender20».

However, the same judicial authority admitted the above mentioned "technical extension", stating that: «As a result of the application of the Community principles (…) the extension may be granted only by express provision, in order to avoid the interruption of the activities in progress and only for the time necessary to allow the implementation of the public tender procedure21».

On the same subject, the Public Contracts Supervisory Authority has, in its turn, theorized the eligibility of technical extension by anchoring it to the principle of continuity of the administrative action referred to in Article 97 of the Italian Constitution and admitting it «only in the limited and exceptional cases in which, for reasons objectively not dependent on the Administration, it is really necessary to temporary ensure the service until a new contractor is found22».

The openness found in legislation and case law on the subject could be probably "expended" by the Italian Government before the EU Court. In particular, the principle of continuity of administrative action may become relevant not only because of its constitutional status, but also with regard to the fact that - as mentioned above - the Commission has grounded the opening of the infringement procedure on the European relevance of the issue since the SAT concession was granted for the fulfilment of a general public interest because it was aimed to the creation of a "strategic public service”.

Said general public interest may be considered not duly protected in the event of a disruption to administrative activity caused by the annulment of the extension of the SAT concession.