Report for the Hearing delivered in Case 199/85
I — Relevant legal provisions and outline of the facts
1. Council Directive 71/305 of 26 July 1971 concerning the coordination of procedures for the award of public works contracts (Official Journal, English Special Edition 1971 (II), p. 682), which was implemented in Italy by Law No 584 of 8 August 1977, coordinated the procedures for the award of public works contracts in Member States on behalf of the State, or regional or local authorities or other legal persons governed by public law, on the basis of the following principles: prohibition of technical specifications that have a discriminatory effect, adequate advertising of contracts and the fixing of objective criteria for participation.
2. By a resolution of 5 November 1979 the Municipal Council of Milan approved and brought into force Decision No 025I-0561 of 18 July 1979 adopted by the Board of the Azienda Municipale Nettezza Urbana di Milano [Municipal Refuse Disposal Corporation of Milan, hereinafter referred to as the Milan Refuse Disposal Corporation'] by which that body awarded by private contract a contract for the construction of a plant for the recycling of solid urban waste to a consortium of three Italian undertakings for a sum of LIT 27000 million.
3. During 1980 and 1981 the staff of the Commission repeatedly drew the Italian authorities attention to the fact that the procedure for the award of the contract followed by them appeared to be incompatible with the directive's requirements.
4. Considering the information and particulars given to it to be unsatisfactory, the Commission, by a letter dated 1 August 1983, commenced the procedure provided for in Article 169 of the EEC Treaty and requested the Italian authorities to submit their observations within two months.
5. By a letter dated 10 November 1983 the Permanent Representation of Italy at the European Communities forwarded to the Commission a communication dated 11 October 1983 from the Mayor of Milan containing the observations requested by the Commission. In that letter the Mayor disputed the Commission's observations and maintained that the exceptions contained in Article 9 (b) and (d) of Directive 71/305 were applicable in this case.
6. The Commission was not satisfied with those observations and, on 13 March 1984, delivered a reasoned opinion under Article 169 of the EEC Treaty requesting the Italian Republic to adopt the measures necessary to comply with the opinion within 30 days of its notification. In that reasoned opinion it stated as follows:
7. In response to the reasoned opinion, the Italian authorities submitted a letter in which the Minister for the Interior instructed the Prefect of Milan to enjoin the Municipality of Milan strictly to ensure that the directive was complied with in full in future together with the following written declaration by the Mayor of Milan dated 19 April 1984:
8. The Commission considered the declaration by the Mayor of Milan to be unsatisfactory. It contended that it was patently ambiguous and gave no effective guarantee for the future and stated that, according to its information, the Municipality of Milan had made another award in respect of the same type of contract and had failed once again to comply with the provisions of Directive 71/305.
9. By an application lodged at the Court Registry on 28 June 1985 pursuant to the second paragraph of Article 169 of the EEC Treaty the Commission brought this action.
10. The written procedure followed the normal course.
11. In its reply the Commission sets out a number of new facts which came to its knowledge after the Italian Government had submitted its defence. In the first place, the construction of the recycling plant decided upon in 1979 was never commenced. In 1984 the Municipality of Milan decided to have the plant in question constructed at Muggiano and the Milan Refuse Disposal Corporation applied to the European Investment Bank for finance. The Commission was asked to give its opinion on that application; it was then that it discovered what it believed to be a further infringement, although in fact the same plant was involved.
12. Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure without any preparatory inquiry. It nevertheless requested the Italian Government to reply in writing to certain questions set out in Part IV below.
II — Conclusions of the parties
The Commission claims that the Court should reject all other conclusions and
(1) Declare that by deciding to award by private contract a contract for the construction of a plant for the recycling of solid urban waste and thus failing to publish a contract notice in the Official Journal of the European Communities, the Italian Republic, and in particular the Municipality of Milan, has failed to fulfil its obligations under Directive 71/305/EEC concerning the coordination of procedures for the award of public works contracts; and (2) Order the Italian Republic to pay the costs.
The Italian Republic contends that the Court should:
Declare the application inadmissible.
III — Submissions and arguments of the parties
A — Admissibility of the application
1. The Italian Government, in its defence, raises an objection of inadmissibility against the Commission's application on the ground that the Italian administrative authorities have complied with that which was required of them by the reasoned opinion.
2. The Commission does not share the Italian Government's view on either of those two points.
B — Submissions and arguments of the parties concerning the substance of the action
1. The Commission maintains that the Italian Government cannot rely on the derogations provided for in Article 9 (b) and (d) of Directive 71/305.
2. The Italian Government, in its defence, considers that it is neither necessary nor appropriate to submit observations concerning the substance of the action, even as alternative submissions to the preliminary question of admissibility. The reasons which led the Municipality of Milan to consider that it had made lawful use of the possibilities provided for by Directive 71/305 have been broadly explained during the administrative stage of the procedure.
IV — Replies to the questions put to the Italian Government
The Court requested the Italian Government to inform it of the reasons why the project for which a contract was awarded in 1979 had not been realized subsequently and, as regards the plant intended to be constructed at Muggiano, to inform it whether it corresponded to the 1979 project, whether its construction was entrusted to the same undertakings as those to whom the 1979 project was awarded and which stage the construction of that plant had reached.
By a letter dated 18 August 1986 the Italian Government replied that the delay in realizing the 1979 project was due to the entry into force in December 1982 of new Italian rules concerning waste disposal giving effect to EEC directives in the matter, which necessitated substantial changes in the proposed plant for which a contract had originally been awarded.
As regards the plant intended to be constructed at Muggiano, the Italian Government confirms that it is the same plant as that for which a contract was awarded in 1979 and that the same undertakings are to carry out its construction. As regards the state of the works at Muggiano, so far only the works preliminary to the actual construction of the plant have been carried out.
1 Language of the Case: Italian.