Concession for management, distribution and maintenance of a public gas distribution installations –28/11/05 / cata_european-union-news

Judgement of the European Court of Justice in case C-231/03 – Consorzio Aziende Metano (Coname) v. Commune di Cingia de’Botti, dated 21 July 2005

The case developed out of a dispute between Consorzio Aziende Metano (Coname) and the Comune di Cingia de’ Botti (municipality of Cingia de’ Botti) concerning the award by the latter to Padania Acque SpA, of a concession for provision of service covering management, distribution and maintenance of methane gas distribution installations. Padania’s share capital was predominantly public - including the commune’s 0.97% holding. Moreover, the award was made without an invitation to a tender.

Because award of such a concession is not governed by any of the directives regulating the field of public contracts, the issue must be examined in the light of a primary Community law, in particular of two fundamental freedoms provided for by the EC Treaty (freedom of establishment and freedom to provide services).

In the light of the above, the European Court of Justice (hereinafter the “ECJ”) noted that obtaining the concession in question might also be of interest to undertakings in Member States other than Italy. Therefore, the absence of transparency when awarding such a concession amounts to a difference in treatment of domestic and foreign undertakings, to the detriment of the latter. In such a scenario, the foreign undertaking has no real opportunity of expressing its interest in obtaining that concession.

Unless it is justified by objective circumstances, such a difference in treatment, which, by excluding all undertakings located in other Member States, operates mainly to the detriment of the latter undertakings, amounts to indirect discrimination on the basis of nationality, prohibited under Articles 43 and 49 of the EC Treaty.

The ECJ held that Articles 43 and 49 of the EC Treaty preclude the direct award by a municipality of a concession for the management of the public gas‑distribution service to a company in which there is a majority public holding and in which the municipality in question has a 0.97% holding, if that award does not comply with transparency requirements. Such transparency requirements do not necessarily imply an obligation to hold an invitation to tender. However, such transparency requirements are, in particular, such as to enable an undertaking located in a Member State other than that of the municipality in question to have access to appropriate information regarding that concession, so that if that undertaking had so wished, it would have been in a position to express its interest in obtaining that concession.