The background to the complaint

1. The present complaint concerns the way the European Commission dealt with an infringement complaint regarding the alleged failure by the Dutch authorities to carry out a public tender procedure at the EU level for a large dredging project on the Maas River, more particularly the Grensmaas on the Dutch-Belgian border (the "Project"). The Project had three objectives: (i) flooding protection; (ii) dredging; and (iii) nature development.

2. On 22 January 2009, the complainants[1] submitted an infringement complaint to the Commission concerning an alleged infringement by the Dutch authorities (more particularly the authorities of the province of Limburg) of EU public procurement rules[2]. The complainants asked the Commission to open an investigation because no tender procedure had been organised for the Project. They argued that the Project was instead simply awarded to the Consortium Grensmaas BV (the "Consortium").

3. According to the complainants, the estimated cost of the Project was EUR 500 million and EU public procurement rules require that a project of that value be put out for public tender[3].

4. The complainants alleged that the Consortium was given the possibility to acquire or to expropriate land along the Maas River. It was thus, they argued, able to finance the Project by extracting gravel from that land. According to the complainants, the aim of the Dutch authorities was to carry out the Project in a budget-neutral way. In the complainants' view, the Dutch authorities infringed EU public procurement rules because, even though no money exchanged hands, the Consortium received a significant benefit in kind (which, according to them, was worth EUR 500 million) for carrying out the Project[4].

5. By letter of 16 April 2009, the Commission replied to the complainants, informing them that in 2003 it had opened an infringement procedure against the Netherlands (for infringement of EU public procurement rules in the framework of the Project). The Commission indicated that it consulted the Dutch authorities on how they could bring the Project in line with the relevant EU rules. This had resulted in the Dutch authorities finally complying with EU law. In 2004, the Commission therefore closed the infringement procedure. The Commission went on to state that, from the information at its disposal in April 2009, it was not clear whether the Project was in fact being executed in line with the commitments given by the Dutch authorities in 2004. It stated that further information from the Dutch authorities was thus necessary in order to deal with the complainants' complaint. The Commission therefore commenced an EU Pilot case[5] in which it gave the Netherlands 10 weeks to reply. In such cases, the relevant body within the Member State replies directly to the complainants and sends a copy of its reply to the Commission. Following that, the complainants are kept informed of the Commission's conclusions. The Commission also pointed out to the complainants that it would be useful for them to obtain legal advice about remedies available to them at the national level, which would allow them to enforce their rights in a more direct manner. The Commission further informed the complainants that it dealt with correspondence and complaints in accordance with its Code of Good Administrative Behaviour and its Communication to the European Parliament and the European Ombudsman on relations with the complainant in respect of infringements of Community law (the "Communication")[6].

6. On 6 November 2009, the complainants sent an e-mail to the Commission in which they pointed out that they had not yet received a reply from the Dutch authorities and asked for an update on the state of affairs.

7. On 1 December 2009, the Dutch authorities, namely, the Ministry of Transport and Waterways, sent a three-page reply to the complainants[7]. The Dutch authorities argued that the complainants' position that the Project concerned public works which had to be put out for tender according to EU public procurement rules was not correct. They explained that no gravel was used by the public authorities to finance the works and that the Project was financed privately by the shareholders of the Consortium, namely, by means of the profits made from the material extracted from the land which was owned by the Consortium or its shareholders. Therefore, they explained, no public authority could be considered to be the "contracting authority" for the Project. The Dutch authorities stated that, since not all of the land on which the Project was to be carried out belonged to the Consortium, it was foreseen that the Consortium would also acquire the remaining land by acquisition or expropriation. In the latter case, they stated, the Consortium does not acquire the land for free, but against payment of compensation for the expropriation. In their letter, the Dutch authorities further explained that the Project was investigated by the Commission in 2003-2004. They pointed out that the Project had three objectives, namely, i) flooding protection (by widening the river), ii) dredging and iii) a large-scale nature development project. The Commission took the view that both the flooding protection works, as well as the work connected to these, had to be considered "public works" which therefore had to be subjected to a tender procedure open to competitors. Following consultations between the Dutch authorities and the Commission, the Project was adapted in such a way that the flooding protection and connected works would be put out for tender by the Consortium in accordance with EU public procurement rules. Following this change, the Commission formally closed its inquiry. The Dutch authorities then gave an overview of the specific parts of the Project which the Consortium, as agreed with the Commission in 2004, had to put out for tender in accordance with EU public procurement rules. They concerned (i) earth-moving (of 6 million cubic metres of earth); and (ii) civil engineering works consisting of (a) the building of new quays, (b) increasing the height of existing quays, (c) laying of a new biking path and (d) various measures aimed at protecting fauna. The Dutch authorities also pointed out that the manner in which the Project was to be executed fully respected the 2004 agreements with the Commission. They rejected the complainants' argument that the compensation paid did not reflect the real value of the land and pointed out that the amount of the compensation to be paid is established by an expropriation judge on the basis of an evaluation made by a committee of independent experts.

8. On 15 December 2009, the Commission wrote to the complainants informing them of its assessment of the Dutch authorities' reply of 1 December 2009. The Commission pointed out that the Dutch authorities had respected their 2004 commitments and that there therefore had been no infringement of EU public procurement rules. It informed the complainants that it would close the case, unless, within four weeks, they sent it relevant new information on the basis of which it would have to review its position.

9. By e-mail of 25 January 2010, the complainants reacted to the Commission's letter of 15 December 2009. They underlined that the price which the Consortium had paid for the grounds did not correspond to the market price. Moreover, by virtue of the expropriation procedure, the Consortium had obtained the gravel for free and could use it to finance the public project. Had the former owners of the lands been paid the normal market price for the gravel, the Consortium would have made no financial gain and the Project would have had to be entirely financed by the State. The complainants also reiterated their position that the Project, which they valued at EUR 500 million, should have been put out for tender in accordance with EU public procurement rules. They wondered how it was possible that a private enterprise, namely, the Consortium, would carry out a project valued at EUR 500 million for free for the benefit of the Dutch State.

10. By letter of 29 January 2010, the Commission replied to the complainants, pointing out that their e-mail of 25 January 2010 did not contain any new elements on the basis of which it would have to review its position. It stated that the five points raised by the complainants mainly concerned the lack of conformity of the price paid for the land to its market price, and not, or only to a limited extent, the public procurement aspect of the Project. Therefore, the Commission stated, the complaint could best be dealt with by the competent Dutch authorities in the framework of an eventual expropriation procedure. The Commission pointed out that "certain parts" of the Project (river widening works, civil engineering works and measures aimed at protecting fauna) were to be considered "public works" and would be subjected to a tender procedure at the EU level, but that the dredging works were to be carried out by the Consortium itself on land which was already largely its own. Thus, these dredging works did not constitute works which were subject to EU public procurement rules. On the basis of the foregoing, the Commission informed the complainants that it had closed its inquiry into the complaint.

11. On 8 February 2010, the complainants replied to the Commission's letter of 29 January 2010. They raised two questions, namely, (i) why the Project, valued at EUR 500 million, did not have to be subjected to a tender procedure at the EU level in its entirety; and (ii) which "certain parts" of the Project had to be put out for tender at the EU level.

12. By letter dated 16 February 2010, the Commission replied to the complainants that in their letter of 1 December 2009, the Dutch authorities had clearly explained which parts of the Project would be put out for tender. It stated that the other parts of the Project were not considered "public works", because, as explained in its letter of 29 January 2010, the dredging works were carried out by the Consortium itself on land which was already largely its own. Thus, the dredging works did not constitute works which had to be put out for tender in accordance with EU public procurement rules.

13. Between March and September 2010, the complainants and the Commission exchanged various letters and e-mails in which they repeated their respective views. On 28 September 2010, the Commission wrote to the complainants stating that it did not consider it useful to continue corresponding. It pointed out that it has discretionary powers to open infringement proceedings under Article 258 of the Treaty on the Functioning of the European Union (TFEU) and that, even if there had been an infringement, which was not the case, it was not obliged to start such proceedings. The Commission informed the complainants that there was no possibility of appealing against its decision not to open infringement proceedings but that they could turn to the Ombudsman if they considered that it was guilty of maladministration.

The subject matter of the inquiry

14. On 12 November 2010, the complainants submitted the present complaint to the Ombudsman and made the following allegation:

The Commission failed appropriately to deal with the substance of the complainants' infringement complaint of 22 January 2009.

15. In his letter asking the Commission for an opinion, the Ombudsman noted that, in its answer to the complainants, the Commission had taken the view that that there was no infringement because the Dutch authorities had fully respected their 2004 commitments. The Ombudsman pointed out, however, that the Commission's answer did not demonstrate that it had looked seriously into whether these commitments were, in fact, respected. In particular, there was no information on whether the flooding protection and connected works were, in fact, put out for tender at the EU level.

The inquiry

16. The Ombudsman forwarded the complaint to the Commission for an opinion. The Commission sent its opinion on 31 March 2011. It was then forwarded to the complainants, who submitted their observations on 30 May 2011.

The Ombudsman's analysis and conclusions

A. Alleged failure appropriately to deal with the substance of the infringement complaint

Arguments presented to the Ombudsman

17. The complainants alleged that the Commission failed appropriately to deal with the substance of their infringement complaint of 22 January 2009. They argued that the Commission had not explained why the Project, which they valued at EUR 500 million, was not entirely subjected to a tender procedure and which parts of the Project had to be put out for tender.

18. In its opinion, the Commission first set out the chronology of its correspondence with the complainants. It enclosed a copy of the request for information it had sent to the Dutch authorities in the framework of the EU Pilot, asking them to clarify how they had followed up their 2004 commitments[8].

19. The Commission noted that the complainants did not indicate any legal provisions which the Commission purportedly infringed when it handled the file, nor did they indicate which provisions of the Communication it allegedly violated. The Commission furthermore noted that it reserved the right to exercise the discretion bestowed upon it by the TFEU in order to decide whether, and if so when, to proceed with an infringement procedure. Given that the Court of Justice has confirmed the broad scope of this discretion, the way in which it is exercised is a matter which falls outside the notion of maladministration.

20. The Commission pointed out that, in its letters to the complainants of 15 December 2009, 29 January and 16 February 2010, it indicated why the Project does not have to be put out for tender in its entirety. Moreover, in these letters, the Commission also referred to the Dutch authorities' reply of 1 December 2009 to the complainants, in which the said authorities explained why the Project in its entirety did not have to be put out for tender and indicated which parts of the project would be put out for tender. The Commission pointed out that the complainants' allegations that the Commission failed to explain why the Project was not entirely subjected to a tender procedure and which parts of the project had to be put out for tender are, therefore, unfounded. In this respect, the Commission also noted that the complainants did not react to the substance of the Dutch authorities' reply of 1 December 2009 or to the substance of the Commission's letters of 15 December 2009, 29 January, 16 February and 28 September 2010.

21. The Commission also pointed out that, in its letter of 29 January 2010 to the complainants, it noted that the five points mentioned by the complainants in their e-mail of 25 January 2010 specifically related to the lack of conformity of the price paid for the land to its market price, and to expropriation issues but did not concern the public procurement aspects of the project, or did so to a very limited extent only. In light of this reaction to the pre-closure letter of 15 December 2009, the Commission decided to close the case. Later, the complainants reverted with additional questions which had already been replied to in the letters sent by the Commission and the Dutch authorities.

22. With regard to the Ombudsman's comment that the Commission's reply did not demonstrate that it had looked seriously into whether the Dutch authorities' 2004 commitments had in fact been respected, the Commission pointed out that, following its request to the Dutch authorities, the latter replied to the complainants by letter of 1 December 2010. In that letter, the Dutch authorities stated that they had fully respected the commitments undertaken in 2004. In the Commission's view, this is correct. In any case, the call for tenders relating to the works that should be put out for tender will only be issued some time between 2014 and 2020.

23. On the basis of the foregoing, the Commission concluded that it dealt with the infringement complaint in accordance with the applicable rules of law and with principles of good administration. It fully dealt with the substance of the case, it replied to all of the complainants' questions and made a reasoned decision on the case. Furthermore, it diligently investigated the issue whether the Dutch authorities had in fact respected their 2004 commitments.

24. In their observations, the complainants pointed out that the Dutch State paid the Consortium for the works by expropriating the lands which the Consortium eventually acquired. They reiterated that a project valued at EUR 500 million, which the Dutch authorities several times described as constituting an inseparable whole, had to be put out for tender at the EU level by the Dutch authorities. The tender procedure should already have taken place, and it should not be organized in parts some time between 2014 and 2020, as mentioned by the Commission. The sale of the lands for dredging purposes should have taken place on a voluntary basis, whereby the owner of the lands would have been compensated for the gravel on the basis of an agreement. The complainants argued that there are no data showing that the flooding protection and other works had been subjected to a tender procedure. They also stated that the indication in the Dutch authorities' letter of 1 December 2009 of the specific parts of the Project which will need to be put out for tender at the EU level was not very clear. What was especially unclear was why certain parts had to be tendered out and others did not. They also pointed out that they did not agree with the Commission's statement, contained in its letter of 16 February 2010, that the other parts of the Project were not considered to be public works because the dredging works were carried out by the Consortium on lands which were already largely its own.

25. The complainants finally pointed out that the Commission's statement that the works will only be put out for tender some time between 2014 and 2020 was not supported by guarantees or documents provided by the Dutch authorities from which it may be ascertained which works are concerned and why the period 2014-2020 was mentioned. The Commission also did not explain why the tender procedure was not organized at an earlier stage. Therefore, one could not say that the Commission had investigated in depth the Dutch authorities' actions.

The Ombudsman's assessment

26. The Ombudsman recognizes that the Commission enjoys wide discretion when deciding upon how to proceed in relation to infringement complaints. The Ombudsman considers, however, that it constitutes good administrative practice for the Commission to explain to complainants how it exercises its wide margin of discretion. In so doing, the Commission would not be limiting its margin of discretion. Rather, it would create greater public trust in its modus operandi, thus increasing its legitimacy and effectiveness.

27. In their letter to the complainants of 1 December 2009, the Dutch authorities explained that, in its 2003/2004 inquiry, the Commission had taken the view that the flooding protection works (which included widening the river) and a number of connected works had to be considered 'public works' which therefore had to be subjected to a tender procedure open to competitors. They further explained that, following consultations with the Commission, they adapted the Project in such a way that the "specifically described 'flooding protection parts' and civil works which were considered to be connected to them"[9] were to be put out for tender in accordance with EU public procurement rules. The Dutch authorities stated that, upon this adaptation, the Commission formally closed its inquiry. They then gave an overview of the specific parts of the Project which have to be put out for public tender, as agreed with the Commission in 2004[10]. They explained that the remaining civil engineering works which would be carried out by the Consortium did not qualify as "public works" that are subject to public procurement rules. They added that the arrangements made with the Commission in 2004 had been complied with fully.

28. In its letter of 29 January 2010 to the complainants, the Commission reiterated what the Dutch authorities had already communicated to the complainants in their letter of 1 December 2009, namely, that certain parts of the Project (river widening works, civil engineering works and measures aimed at protecting fauna) were to be considered 'public works' within the meaning of EU public procurement rules and that they "will be tendered out" at the EU level. In its opinion on the complaint, the Commission provided further clarifications as regards the timing of the tender procedure by pointing out that the relevant works will be put out for tender some time between 2014 and 2020.

29. It appears from both the Dutch authorities' reply of 1 December 2009 and the Commission's reply of 29 January 2010 to the complainants that, in 2004, the Commission was of the opinion that certain parts of the Project had to be put out for tender in accordance with EU public procurement rules. The Dutch authorities subsequently committed themselves to subjecting the relevant parts of the Project to a tender procedure and the Commission closed the case on the basis of these commitments. In these circumstances, there could only be an infringement of EU public procurement rules if the contract(s) for the relevant works were awarded to a company or companies without a public tender procedure having been organised. However, from the information available to the Ombudsman, there is no indication that the contract(s) were so awarded. The complainants have not alleged that the contract(s) for the relevant works have already been concluded without a tender procedure having been organised. In their observations, the complainants merely pointed out that there were no data to show that the Maas flooding protection and other works subject to public procurement rules had been put out for tender. As indicated by the Commission, it rather appears that it is the Dutch authorities' intention to launch a tender procedure for the relevant works only at some point between 2014 and 2020.

30. Considering that, at this stage, no information has been brought to the Commission's attention to the effect that contracts for the relevant works have been awarded without a call for tenders having been issued, and thus in breach of EU public procurement rules, the Ombudsman considers that no further inquiries into the present complaint are justified at this stage and that it is appropriate to close the case.

31. The Ombudsman would however like to draw the complainants' attention to the fact that, in case they have information showing that contracts for the relevant works were concluded without a tender procedure having been organized - in which case there could be an infringement of EU public procurement rules - they have the possibility to submit a new infringement complaint to the European Commission and, in case they consider that their complaint is handled in an unsatisfactory manner, to submit a new complaint to the Ombudsman.

32. The Ombudsman finally notes that, in their infringement complaint and in their subsequent letters to the Commission, the complainants placed emphasis on a number of expropriation issues. Specifically, they argued that owners of land containing gravel were not appropriately compensated. The Ombudsman points out that expropriation issues, including the price paid for expropriated land, do not fall within the Commission's competence[11]. As the Commission correctly indicated in its letter to the complainants of 29 January 2010, such issues can only be dealt with by the competent Dutch authorities, including judicial authorities.

B. Conclusion

On the basis of his inquiry into this complaint, the Ombudsman closes it with the following conclusion:

No further inquiries into the present complaint are justified at this stage.

The complainants and the Commission will be informed of this decision.

 

P. Nikiforos Diamandouros

Done in Strasbourg on 7 March 2012

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[1] The initial infringement complaint of 22 January 2009 to the Commission was sent by a lawyer on behalf of one of the complainants only (Mr M.). However, in several subsequent letters sent to the Commission, the lawyer mentions that he acts on behalf of his clients (in the plural). In the complaint submitted to the Ombudsman, the estate agency refers to letters sent by the lawyer to the Commission on behalf of the clients. Therefore, in the present decision, for the sake of consistency, the word "complainants" (in the plural) is used.

[2] Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts, OJ 2004 L 134, p. 114.

[3] Article 7 of Directive 2004/18/EC sets out the thresholds above which public works, supply or service contracts should be awarded in accordance with the rules of the Directive. As regards contracts for public works, the threshold established in Article 7(c) of the Directive was (in 2004) EUR 6 242 000 exclusive of VAT. The current threshold is EUR 5 million (http://ec.europa.eu/internal_market/publicprocurement/rules/current/index_en.htm).

[4] The complainants stated that the compensation paid by the Consortium and the Dutch authorities to the previous owners of the land was equivalent to the value of agricultural land and did not correspond to the real net value of land containing gravel (which was higher).

[5] The "EU Pilot" was launched in April 2008 on the basis of Commission Communication of 5 September 2007 "A Europe of Results - Applying Community Law" (COM(2007) 502 final). The aim of the EU Pilot is to deal more efficiently and rapidly with infringement procedures.

[6] COM(2002) 141 final, OJ 2002 C 244, p. 5.

[7] In its opinion on the complaint, the Commission pointed out that the Dutch authorities' reply of 1 December 2009 was not annexed to the complainants' complaint. The Ombudsman notes that on 9 December 2010, following a request from the Ombudsman's Office, the complainants sent an e-mail with further supporting documents, namely copies of correspondence with the Commission services. This e-mail also included a copy of the Dutch authorities' reply of 1 December 2009. Due to an oversight, this e-mail and its annexes were not attached to the e-mail of 20 December 2010 by means of which the Ombudsman's Office sent to President Barroso the letter opening the inquiry and a copy of the complaint. The Ombudsman however notes that all the correspondence attached to the complainants' e-mail of 9 December 2010 to the Ombudsman's Office was also annexed to the Commission's opinion on the complaint. All the documents in the file of the complaint are therefore in the Commission's possession, including the letter sent by the Dutch authorities on 1 December 2009. The Ombudsman notes that the Commission enclosed with its opinion only the first of the said letter's three pages.

[8] The Ombudsman notes that the document enclosed by the Commission is not a copy of a letter, but a simple Word document, which is not dated.

[9] In Dutch: "specifiek beschreven 'hoogwaterbeschermingsonderdelen' en civiele werken die daar verbonden aan werden geacht"

[10] They concerned: (i) earth-moving (of 6 million cubic metres of earth); and (ii) civil engineering works consisting of (a) the building of new quays, (b) increasing the height of existing quays, (c) the laying of a new biking path and (d) various measures aimed at protecting fauna.

[11] Specifically, even if the amount of compensation paid to expropriated landowners were to be questionable, this would be irrelevant to the issue of compliance with EU public procurement rules. EU public procurement rules will be respected if the relevant public works are carried out in accordance with a public tendering process.