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PART 2 E+W+N.I.Scope and principles

CHAPTER 2E+W+N.I.Exclusions

Concession contracts between entities within the public sectorE+W+N.I.

Award of contracts to controlled persons

17.—(1) A concession contract awarded by a contracting authority or a utility referred to in regulation 5(1)(a) to a legal person falls outside the scope of these Regulations where all of the following conditions are fulfilled—

(a)the contracting authority or utility exercises over the legal person concerned a control which is similar to that which it exercises over its own departments;

(b)more than 80% of the activities of the controlled legal person are carried out in the performance of tasks entrusted to it by the controlling contracting authority or utility or by other legal persons controlled by that contracting authority or utility; and

(c)there is no direct private capital participation in the controlled legal person with the exception of non-controlling and non-blocking forms of private capital participation required by national legislative provisions, in conformity with the [F1Retained] Treaties, which do not exert a decisive influence on the controlled legal person.

(2) A concession contract also falls outside the scope of these Regulations where a controlled legal person which is a contracting authority or utility referred to in regulation 5(1)(a) awards a concession contract to—

(a)its controlling contracting authority or utility, or

(b)another legal person controlled by the same contracting authority or utility,

provided that there is no direct private capital participation in the legal person being awarded the concession contract with the exception of non-controlling and non-blocking forms of private capital participation required by national legislative provisions, in conformity with the [F2Retained] Treaties, which do not exert a decisive influence on the legal person being awarded the contract.

(3) A contracting authority or utility shall be deemed to exercise over a legal person a control similar to that which it exercises over its own departments within the meaning of paragraph (1)(a) where—

(a)it exercises a decisive influence over both strategic objectives and significant decisions of the controlled legal person, or

(b)that control is exercised by another legal person which is itself controlled in the same way by the contracting authority or utility,

and references to “control”, “controlled” and “controlling” in paragraphs (1) to (3) shall be interpreted accordingly.

Award of concession contracts where there is joint control

(4) A contracting authority or utility referred to in regulation 5(1)(a) which does not exercise over a legal person control within the meaning of paragraph (3) may nevertheless award a concession contract to that legal person without applying these Regulations where all of the following conditions are fulfilled—

(a)the contracting authority or utility exercises jointly with other contracting authorities or utilities a control over that legal person which is similar to that which they exercise over their own departments;

(b)more than 80% of the activities of that legal person are carried out in the performance of tasks entrusted to it by the controlling contracting authorities or utilities or by other legal persons controlled by the same contracting authorities or utilities; and

(c)there is no direct private capital participation in the controlled legal person with the exception of non-controlling and non-blocking forms of private capital participation required by national legislative provisions, in conformity with the [F3Retained] Treaties, which do not exert a decisive influence on the controlled legal person.

(5) For the purposes of paragraph (4)(a), contracting authorities or utilities exercise joint control over a legal person where all of the following conditions are fulfilled—

(a)the decision-making bodies of the controlled legal person are composed of representatives of all participating contracting authorities or utilities;

(b)those contracting authorities or utilities are able to jointly exert decisive influence over the strategic objectives and significant decisions of the controlled legal person; and

(c)the controlled legal person does not pursue any interests which are contrary to those of the controlling contracting authorities or utilities.

(6) For the purposes of paragraph (5)(a), individual representatives may represent several or all of the participating contracting authorities or utilities.

Contracts which establish or implement co-operation between contracting authorities or utilities

(7) A concession contract concluded exclusively between two or more contracting authorities or utilities referred to in regulation 5(1)(a) falls outside the scope of these Regulations where all of the following conditions are fulfilled—

(a)the contract establishes or implements a co-operation between the participating contracting authorities or utilities with the aim of ensuring that public services they have to perform are provided with a view to achieving objectives they have in common;

(b)the implementation of that co-operation is governed solely by considerations relating to the public interest; and

(c)the participating contracting authorities or utilities perform on the open market less than 20% of the activities concerned by the co-operation.

Determination of percentages

(8) For the determination of the percentage of activities referred to in paragraphs (1)(b), (4)(b) and (7)(c), the average total turnover, or an appropriate alternative activity-based measure such as costs incurred by the relevant legal person, contracting authority or utility referred to regulation 5(1)(a) with respect to services, supplies and works for the 3 years preceding the concession contract award shall be taken into consideration.

(9) Where, because of—

(a)the date on which the relevant legal person, contracting authority or utility was created or commenced activities, or

(b)a reorganisation of its activities,

the turnover, or alternative activity-based measure such as costs, are either not available for the preceding 3 years or no longer relevant, it shall be sufficient to show that the measurement of activity is credible, particularly by means of business projections.

Textual Amendments