In a German case before the European Court of Justice, Advocate General (AG) Mazak has offered a helpful opinion clarifying what constitutes a services concession for the purposes of the procurement rules (NB. AG opinions are not binding but are often followed in subsequent judgments, which normally follow a few months later).
Definition of a contract as a services concession is particularly important because as things stand, they (but not works concessions) are exempted from the procurement rules and so not subject to mandatory OJEU advert when the usual thresholds are crossed. This is a highly sensitive area of procurement law that is currently the subject of a European Commission public consultation with a view to deciding if the law needs to be changed.
Any sort of concession arrangement is usually understood as a contract for which the payment to the contractor concerned lies in its ability to exploit the contract (which implies a degree of risk to the contractor) rather than payment for services rendered, after which the contractor walks away and has no further role.
Typical examples might be the construction of a toll bridge where payment lies in the right to levy a toll on all users thereafter, or the delivery of car parking where the contractor is paid by the receipt of parking fees from individuals parking their cars.
In the case in point (Privater Rettungsdienst und Krankentransport Stadler) the AG considered that emergency rescue services were definitely services concessions on the grounds that the contracting authority procuring them paid no direct compensation to those delivering the contracts. In other words, the absence of direct compensation is a decisive test in defining a contract as a services concession.
The AG went on to remind us however that services concessions may still exist even if there is some direct remuneration. In such cases the classification as a concession or not will depend on whether the service provider is taking on a material risk in relation to its level of payment.
Another point often associated with services concessions is the application of the general (EU) Treaty principles of transparency and non-discrimination, meaning that some form of reasonably advertised open competition is held notwithstanding the exclusion of the specific (OJEU) rules.
Past cases like Parking Brixen have previously confirmed that these rules apply to services concessions, leaving a great deal of uncertainty as to their exact scope in practice. The latest clarification of the extent of these obligations, however, appears to be (via An Post) that this is limited to situations of “certain cross border interest”.