Report to European Parliament and Council on the functioning of Directive 2014/23/EU on the award of concession contracts and on the impact on the internal market of the exclusions set out in Article 12

Directive 2014/23/EU3 on the award of concession contracts (hereinafter the “Directive”) was adopted to address the absence of a coherent, all-encompassing EU-level framework for concessions. The aim of the Directive is to provide a clear legal framework that promotes the use of concessions while improving market access for businesses by ensuring transparency and fairness in award procedures. The fourth paragraph of Article 53 of the Directive mandates the Commission to “review the functioning of this Directive and […] to report to the European Parliament and to the Council”, while the third paragraph of that Article requires the Commission to “assess the economic effects on the internal market of the exclusion [of the water sector]” from the scope of the Directive. This Report presents the main findings of that review and assessment. It draws on information from the Commission Staff Working Document on the application of the Directive (“Commission Staff Working Document”), which is to be read in conjunction with this Report.

Short Summary of findings

Given the late transposition ( last MS transposed in 2020), it is too soon to conclude whether the Directive has achieved its objectives (to increase legal certainty and ensure better access to the EU concessions market). Nevertheless a number of preliminary conclusions can be drawn, as summarized below:

All Member States have transposed the Directive and have put in place necessary authorities and structures to ensure correct and efficient implementation.

The Directive has brought more transparency into the award process. The number of concessions published has gradually increased since 2016 (transposition deadline). The highest value concessions are mainly awarded without a call for competition. Since those concessions correspond mainly to the electricity sector (which is generally characterized by the existence of special or exclusive rights or legal monopoly) this situation does not raise concerns from the perspective of compliance with the Concessions Directive.

Despite being open to bidders from other Member States, the EU concessions market has so far not attracted much cross-border participation. This situation is not specific to the concession market but rather common to public procurement in general and varies greatly between Member States.

The level of SME participation appears to have increased over the past 5 years, although the share of SMEs in the concession market is relatively low as compared to their share in the overall economy. It is important to note however that, by their nature, concessions imply high upfront investments and risk on the side of the concessionaire, therefore SMEs are less prone to participate in tenders for concessions.

The water sector is excluded from the scope of the Directive. Limited data from a handful of Member States does not allow drawing firm conclusions on the economic effects of the water exclusion on the internal market.