Earlier this year the European Commission sent opinions to Italy and Germany in relation to the following cases. Concern was expressed in each case about the use of the "in-house" exception from normal procurement rules:

Germany: In the German case there were three local public authorities (Heidelberg, Mannheim and Rhine-Neckar) that co-ordinated their waste disposal services, each taking responsibility for a certain aspect of waste disposal. They awarded the contracts directly without tendering. The European Commission's view is that "in-house" exception could not be allowed because the co-operation between the municipalities meant that the undertakings carrying out the contracts were operating only partially for their local authority shareholders. The Commission said that an open competition and tendering process should have therefore been followed as the authorities were purchasing services from the market.

Italy: The European Commission also believes the Italian case did not meet the conditions set out by the previous EC case law in relation to the "in-house" exception. Like the German case there was a public company (Multiservizi) with shareholders from various local authorities, although here the local authorities were all under the umbrella of the same region, Marche Centro Ancona. Despite the fact that the shareholders were local authorities drawn from the same region the European Commission believes the fact that they were minority shareholders of Multiservizi meant they were unable to exert a level of control similar to that exercised over their own departments. The European Commission also said it was significant that the management board of Multiservizi was to a great extent autonomous, even though their statute granted various powers to the shareholders. Further to this Multiservizi carried out other functions, which the Marche Centro Ancona public authority had no control over.

07 July 2008

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