On 18 September 2019, the Court of Justice handed down its judgement in an infringement procedure brought against Italy for extending a concession without a prior call for tenders (case C-526/17).
The concession under scrutiny related to the construction and exploitation of a motorway and was awarded in 1969 for a period of 30 years. However, pursuant to an amending agreement concluded in 1999, the concession relating to a part of the motorway would end in 2028. In 2009, the agreement was once more amended so that the entire concession would end in 2046.
According to the Commission, the amending agreement of 2009 resulted in an extension of 18 years to the existing concession and should therefore have been subject to a public call for tenders. After years of negotiation, the Commission brought an infringement procedure against Italy on the grounds that the extension was in breach of EU public procurement rules, in particular the principle of equal treatment and the obligation to publish a contract notice (Articles 2 and 58 of Directive 2004/18/EC).
Italy contested the applicability of this Directive, considering that the initial concession agreement had been awarded prior to the adoption of any EU public procurement legislation. The Court of Justice rejected this argument and pointed out that in order to ascertain the applicable law, the date of the amendment must be taken into account and not the date of the contract.
Subsequently, the Court concluded that the extension of 18 years constituted a material change to the concession and was therefore in breach of the principle of equal treatment and the obligation to publish a contract notice. Italy’s defence that the extension was necessary to guarantee the balance of the contract and to respect the principles of legal certainty and legitimate expectations was to no avail.
Please contact Peter Teerlinck or Raluca Gherghinaru for further information about this case and/or for general advice on public procurement.