French Court of Justice of the European Union Clarifies Cases Where Concessions Can Be Modified Without a New Award Procedure
On December 16, 2024, the French Court of Justice of the European Union (CJEU) issued a judgment specifying the instances in which a concession contract can be modified without requiring a new award procedure.
Background
Concession contracts are agreements under which a public authority grants a private entity the right to operate a public service or to build and operate infrastructure. These contracts are typically awarded through a competitive bidding process.
CJEU Judgment
The CJEU judgment stems from a case involving a concession contract for the operation of a public transport service. The contract had initially been awarded to one company but was subsequently modified to allow another company to operate part of the service.
The European Commission challenged this modification, arguing that it constituted a substantial change to the contract that should have triggered a new award procedure. However, the CJEU ruled that the modification did not require a new award procedure because it did not alter the essential elements of the contract.
Key Considerations
The CJEU identified four key factors to consider when determining whether a modification to a concession contract requires a new award procedure:
- Does the modification alter the nature or scope of the concession?
- Does the modification increase the value of the concession?
- Does the modification introduce new risks or obligations for the concessionaire?
- Has the modification been made in accordance with the contract provisions?
If any of these factors are present, then the modification is likely to require a new award procedure.
Implications
The CJEU’s judgment provides clear guidance to public authorities and private contractors on the circumstances in which concession contracts can be modified without triggering a new award procedure. This guidance will help to ensure that public procurement is conducted in a fair and transparent manner.
Conclusion
The CJEU’s judgment provides much-needed clarification on the issue of modifying concession contracts. By setting out clear criteria for determining when a new award procedure is required, the court has helped to ensure that public procurement is conducted in a fair and transparent manner.
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economie.gouv.fr a new article on 2024-12-16 15:33 titled “Lettre de la DAJ – La CJUE précise les cas dans lesquels une concession peut être modifiée sans nouvelle procédure d’attribution”. Please write a detailed article on this news item, including any relevant information. Answers should be in English.
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