Rail transport. The Court of Justice rules on the duties of competent national authorities with regard to direct awards

On 24 October 2019, the Court of Justice passed its judgment in Case C‑515/18, Autorità Garante della Concorrenza e del Mercato v Regione autonoma della Sardegna, on the interpretation of Article 7(2) and (4) of Regulation No 1370/2007. The request was made in proceedings between the Autorità Garante della Concorrenza e del Mercato (“Authority”) and the Regione autonoma della Sardegna (“Region of Sardinia”) concerning the direct award of a public service contract for the transport of passengers by rail to Trenitalia SpA (“Trenitalia”).

Following the publication of a prior information notice concerning the direct award of public transport services by rail by the Region of Sardinia, Trenitalia and two operators active in that sector expressed their interest. However, believing that it did not have to open a competitive tendering procedure, the Region of Sardinia directly awarded the local public passenger rail transport services to Trenitalia.

Having received information on alleged flaws in that procedure by direct award, the Authority brought an action before the Tribunale amministrativo regionale per la Sardegna (Regional Administrative Court, Sardinia; the “referring court”), which stayed the proceeding and asked the Court whether, in essence, Article 7(2) and (4) of Regulation No 1370/2007 mean that national authorities which intend directly to award a public service contract for the transport of passengers by rail are required, firstly, to publish or communicate to interested economic operators a notice containing all the information necessary in order to enable them to submit a sufficiently detailed offer for comparative assessment and, secondly, to carry out such a comparative assessment of all bids received following publication of that information.

According to the Court, answer to both questions is negative in the light not only of the wording of Article 7(2) and (4), but also of its context and the objectives of Regulation No 1370/2007. The provisions, indeed, neither require the publication or communication of information on the intended award, to allow bids that may be subject to a comparative assessment, nor do they provide for a comparative assessment of any bids received following publication of that information.  Furthermore, it cannot be inferred from the text of such provisions that the obligation to communicate the reasons for the decision to award the contract directly refers not only to the reasons leading the competent authority to make a direct award but also to the quantitative or qualitative evaluations of any bids it may receive.

The Regulation, indeed, defines a “direct award” as a public service contract awarded to a given operator without any prior competitive tendering procedure. Therefore, a different interpretation of Article 7(2) and (4) would lead to the procedure for direct award being equated to a competitive tendering procedure, ignoring the differences provided for by Regulation No 1370/2007.

Marco Stillo