C-513/99

CONCORDIA BUS FINLAND

O P I N I O N O F ADVOCATE GENERAL MISCHO delivered on 13 December 2001 1

1. The Korkein hallinto-oikeus (Supreme 'For the purposes of this Directive: Administrative Court), Finland (hereinafter the 'national court'), refers three questions c o n c e r n i n g the i n t e r p r e t a t i o n of Article 2(1), (2) and (4) and Article 34(1) of Council Directive 93/38/EEC of 14 June 1993 coordinating the procurement pro- cedures of entities operating in the water, energy, transport and telecommunications (a) public service contracts shall mean sectors, 2as also Article 36(1) of Council contracts for pecuniary interest con- Directive 92/50/EEC of 18 June 1992 relat- cluded in writing between a service ing to the coordination of procedures for provider and a contracting authority, the award of public service contracts. 3 to the exclusion of:

I — Legal framework

Community law

(ii) contracts awarded in the fields referred to in Articles 2, 7, 8 and Directive 92/50 9 of Directive 90/531/EEC or ful- filling the conditions in Article 6(2) of the same Directive;

'1. Without prejudice to national laws, regulations or administrative provisions on the remuneration of certain services, the criteria on which the contracting authority shall base the award of contracts may be: '1. This Directive shall apply to contracting entities which:

(a) are public authorities or public under- (a) where the award is made to the econ- takings and exercise one of the activ- omically most advantageous tender, ities referred to in paragraph 2; various criteria relating to the contract: for example, quality, technical merit, aesthetic and functional characteristics, technical assistance and after-sales ser- vice, delivery date, delivery period or period of completion, price; or (b) when they are not public authorities or public undertakings, have as one of their activities any of those referred to in paragraph 2 or any combination thereof and operate on the basis of special or exclusive rights granted by a competent authority of a Member (b) the lowest price only. State.

2. Relevant activities for the purposes of 2. When the contract is to be awarded to this Directive shall be: the economically most advantageous tender, the contracting authority shall state in the contract documents or in the tender notice the award criteria which it intends to apply, where possible in descending order of importance.'

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(c) the operation of networks providing a 5. Article 34 of Directive 93/38 states that: service to the public in the field of transport by railway, automated sys- tems, tramway, trolley bus, bus or cable.

all the criteria which they intend to apply to lic procurement) as amended by Laws the award, where possible in descending 1523/1994 and 725/1995 (hereinafter 'Law order of importance. 1505/1992') and by Regulations 243/1995 on supply, service and works contracts exceeding the threshold values and 567/1994 on contracts of entities operating in the water, energy, transport and tele- communications sectors exceeding the threshold value, as amended by Regulation 2 4 4 / 1 9 9 5 (hereinafter ' R e g u l a t i o n 567/1994').

6. Article 45(3) and (4) of Directive 93/38 provides that:

8. Under Paragraph 4(1) of Regulation 243/1995, that regulation does not concern contracts to which Regulation 567/1994 '3. Directive 90/531/EEC shall cease to applies. Under Paragraph 1(10) of Regu- have effect as from the date on which this lation 567/1994, that regulation does not Directive is applied by the Member States concern contracts to which Regulation and this shall be without prejudice to the 243/1995 applies. obligations of the Member States concern- ing the deadlines laid down in Article 37 of that Directive.

9. Paragraph 43 of Regulation 243/1995 4. References to Directive 90/531/EEC provides that: shall be construed as referring to this Directive.'

' 1 . The contracting entity must approve either the tender which is economically the The national law most advantageous overall according to the assessment criteria for the contract or the tender which is lowest in price. Criteria for assessment of overall economic advantage 7. Directives 92/50 and 93/38 were trans- may be, for example, the price, delivery posed into Finnish law by the Laki julkis- period, completion date, costs of use, ista hankinnoista 1505/1992 (Law on pub- quality, life cycle costs, aesthetic or func-

The organisation of bus transport within the city of Helsinki

11. The order for reference states that 14. The transport department is a commer- Helsinki City Council decided on 27 Au- cial undertaking of the municipality which

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is divided operationally and economically the undertaking whose tender was most into production units for the different economically advantageous overall to the modes of transport (buses, trams, metro, city. In assessing overall economic advan- and tracks and property). The production tage account would be taken of three types unit for buses is HKL-Bussiliikenne (here- of criteria, namely the overall price of inafter 'HKL'). The transport department operation, the quality of the (bus) fleet also comprises a head unit, consisting of a and the operator's quality and environment planning unit and an administrative and management. economic unit. The planning unit functions as an order-placing office which prepares proposals for the public transport commit- tee as to which routes are to be tendered for and what level of service is to be required. The production units are economically distinct from the rest of that department and have separate accounting and balance 17. As regards, first of all, the overall price sheets. of operation, the most favourable tender would receive 86 points and the number of points of the other tenders would be calculated as follows: Number of points = amount of the annual operating payment of the most favourable tender divided by the amount of the tender in question and multiplied by 86.

21. The commercial service committee decided on 12 February 1998 to choose HKL as transport operator for lot 6, as its 23. The Kilpailuneuvosto dismissed the tender was considered to be economically application. It held that the contracting most advantageous overall. The order for entity is entitled to determine what sort of reference shows that Concordia had sub- fleet it wants. Setting the criteria and mitted the lowest price tender, receiving determining their weight must, however, 81.44 points for its A tender and 86 points take place objectively, with the needs of the for its B tender. HKL had received 85.75 contracting entity and the quality of service points. As regards vehicle fleet, HKL had being taken into account. The contracting obtained the most points, 2.94 points, with entity must be able if necessary to give Concordia obtaining 0.77 points for its A reasons for the appropriateness of the tender and -1.44 points for its B tender. choice and the application of the selection The 2.94 points obtained by HKL under criteria. this head included the maximum awards for nitrogen oxide emissions below 2g/kWh as well as for an external noise level below 77 dB. Concordia had obtained no addi- tional points in respect of nitrogen oxide emissions or noise level. HKL and Con- 24. The Kilpailuneuvosto held that the city cordia had both obtained maximum points of Helsinki's decision to favour low- for quality and environment certification. emission buses was an environment policy The greatest total number of points, 92.69 decision aimed at reducing the harm caused points, was thus obtained by HKL. Con- to the environment by bus traffic. That did cordia was placed second, having obtained not fall to be regarded as a procedural 86.21 points for its A tender and 88.56 error. If a tenderer had been treated points for its B tender. unfairly with regard to that criterion, inter-

27. The national court then states that consideration of the case also requires the 25. Concordia brought appeal proceedings, interpretation of provisions of Community seeking for the decision of the Kilpailuneu- legislation in order to establish whether a vosto to be quashed. It submitted that the city, when awarding a contract of the kind extra points awarded for buses with low at issue in the main proceedings, may take gas and noise emissions favoured HKL, into account environmental considerations which was the only tenderer able in prac- connected with the bus fleet tendered. If the tice to use a fleet which could obtain such claims put forward by Concordia as extra points. It further submitted that regards points given for environmental environmental factors which were not elements and other points were accepted, directly linked to the object of the tender this would mean that the number of points should not be taken into account in assess- obtained by its B tender exceeded the ing the overall advantage. number of points obtained by HKL.

28. The national court observes in that connection that Article 36(1)(a) of Direc- tive 92/50 and Article 34(1)(a) of Directive 26. In its order for reference the national 93/38 do not mention environmental ques- court states first that in order to decide tions in the list of criteria for establishing whether the provisions of Regulation the economically most advantageous 243/1995 or Regulation 567/1994 are tender. It says that in its judgments in applicable in the case, it is necessary to Beentjes and Evans Medical and Macfarlan ask whether the contract at issue in the Smith 4 the Court ruled that in selecting the main proceedings falls within the scope of most economically advantageous tender it Directive 92/50 or Directive 93/38. It notes in that regard that Annex VII to Directive 4 — Case 31/87 [1988] ECR 4635 and Case C-324/93 [1995] 93/38 mentions, for Finland, both the ECR I-563.

— within the city transport depart- ment there is a planning unit which acts as an ordering unit which '(1) Are the provisions on the scope of prepares proposals for the public Council Directive 93/38/EEC of transport committee on which 14 June 1993 coordinating the pro- routes should be put out to tender curement procedures of entities oper- and what level of quality of ser- ating in the water, energy, transport vices should be required, and

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— within the city transport depart- (3) If the response to the above question is ment there are production units, affirmative, are the Community provi- economically distinct from the rest sions on public procurement to be of the transport department, interpreted as meaning that the awar- including a unit which provides ding of extra points for the abovemen- bus transport services and takes tioned characteristics relating to part in tender procedures relating nitrogen oxide emissions and noise thereto? level of the fleet is, however, not permitted if it is known beforehand that the department operating bus transport belonging to the city which is the contracting entity is able to offer a bus fleet possessing the above char- acteristics, which in the circumstances only a few undertakings in the sector are otherwise able to offer?'

Preliminary observation 34. Such exceptional circumstances do not exist in the present case. On the contrary, the national court clearly establishes the connection between its first question and the main action when it says that '[i]n order to decide whether the provisions of Regu- lation 243/1995 or 567/1994 are applicable in the case, it is necessary also to seek a preliminary ruling on whether an award of 32. Without going so far as to claim that the kind at issue here falls within the scope the first question is inadmissible, certain of Directive 92/50 or 93/38....' I therefore parties, including Concordia and the consider that the national court's first Netherlands Government, submit that it question should be answered. has no bearing on the answer to the second and third questions. They say that the provisions in relation to which issues are referred to the Court in the second and third questions are effectively identical in both directives. It follows that it is not necessary to determine in advance which of Position of the parties the two directives applies.

40. To answer the first question it is necessary to consider the scope of Directive 93/38.

37. Both Concordia and the Commission, on the other hand, consider that Directive 92/50 is applicable. The Commission states that it appears from the order for reference that neither the city of Helsinki, its com- 41. Article 2(1)(a) of Directive 93/38 pro- mittees nor its purchasing unit operated a vides that it applies to contracting entities network providing a transport service to which 'are public authorities or public the public, but that it was the production undertakings and exercise one of the activ- units of the transport department which ities referred to in paragraph 2'. operated networks providing a transport service to the public. These units, which are separate from the remainder of the trans- port department, are not contracting entities in the contract at issue in the main action. 42. In the present case, it is to be inferred from the order for reference that it is the commercial service committee of the city of Helsinki which was responsible for regulat- ing the procurement of urban public trans- port services. The contracting entity in the main action is therefore unquestionably a 'public authority' within the meaning of 38. The Netherlands Government and the Article 2(1)(a) of Directive 93/38. Swedish Government express no views on the first question.

43. For Directive 93/38 to apply, it is also necessary that the public authority exer- cises 'one of the activities referred to in 39. The United Kingdom Government con- paragraph 2'. The relevant activity in the siders that it is for the national court to present case is that referred to in decide which of the two directives is Article 2(2)(c), namely 'the operation of applicable, having regard to Article 2 of networks providing a service to the public Directive 93/38. in the field of transport by... bus...'. The

47. It follows from Article 2(1) of the directive that it applies only where the contracting entity exercises an activity, in this case that of 'the operation of networks providing a service to the public in the field of transport by... bus...'. It also follows from Article 2(4) that this activity is equiv- 44. It follows in my opinion that Directive alent (in the present case) to '[t]he provi- 93/38 applies to a public authority which sion of bus transport services to the public'. operates a network and which intends to conclude a contract relevant to that net- work. On the other hand, I am of the view that Directive 93/38 does not apply where a contracting entity organises a tender pro- cedure whose purpose is that the operation itself of the network is to be carried on by 48. The terms Operation' and 'provision' other parties. indicate that it is the contracting entity itself which should be making the bus service available. It is therefore not suffi- cient, for a contracting entity to be regarded as operating a network, that it lays down, for example, rules as to the route to be served or the frequency of the service. It follows from the second indent of Article 2(2)(c) that the laying down of conditions on the routes to be served etc. 45. The Austrian Government, in submit- does not amount to the operation of a ting that Directive 93/38 applies because network, but only to constituting or defin- '[t]he operation of a public bus network is ing it. In other words, to operate a network undoubtedly the provision of a service in means to run it oneself, generally using the field of transport within the meaning of one's own workforce and buses. Article 2(2)(c) of Directive 93/38' and in stating that '[a]ccording to the order for reference... it is the operation of such a network which was the purpose of the tender procedure', appears to me to be suggesting that Directive 93/38 applies because the operation of the network was 49. It therefore follows that the directive the subject of the tender procedure at issue. applies if the contracting entity itself oper-

51. Furthermore, it is not in my view 54. A tender procedure whose object is the correct to interpret Directive 93/38 in such taking over by a third party of the oper- a wide manner that its scope includes a ation of a bus network is therefore not covered by Directive 93/38. It is however covered by Directive 92/50 if all its con- 6 — See Case C-87/94 Commission v Belgium [1996] ECR ditions apply. I-2043. In this case, the Wallonia Regional Transport Company, as a public authority operating a network providing a service to the public in the field of transport by bus, initiated a tender procedure under Directive 90/531, subsequently replaced by Directive 93/38, for the award of a 7 — Case C-324/98 [2000] ECR I-10745. contraa for the supply of 307 standard vehicles. 8 — Evans Medical and Macfarlan Smith, paragraph 48.

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61. I therefore propose that the answer given to the first question be that the provisions concerning the scope of Direc- tive 93/38, in particular Article 2(1)(a), 58. It is essential to the concept of a public service contract, whether it be regulated by Directive 92/50 or Directive 93/38, that it 9 — See Article 1(a) of Directive 92/50 and Article 1(4) of consists in a contract for pecuniary interest Directive 93/38.

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(2)(c) and (4), are not to be interpreted as omically distinct from the rest of the meaning that that directive applies to the transport department, including a unit procedure of a municipality which is a which provides bus transport services contracting entity for the award of a and takes part in tender procedures contract concerning the operation of an relating thereto. urban bus transport service, if

— the municipality is responsible for the planning, development, implemen- The second question tation and other organisation and supervision of public transport in its area, 62. By its second question the national court is essentially seeking to ascertain whether Article 36(1) of Directive 92/50 or Article 34(1) of Directive 93/38 allow there to be included among the criteria for — for the above functions the municipal- awarding a contract on the basis of the ity has a public transport committee economically most advantageous tender, and a city transport department sub- the reduction of nitrogen oxide emissions ordinate thereto, or of noise levels in a manner such that if the nitrogen oxide emissions or noise level of certain buses are below a certain level, extra points may be taken into account in the comparison.

64. By contrast, all the other parties submit that it is permissible to include environ- mental criteria in the criteria for the award of a contract. They refer in particular to the fact that Article 36(1) of Directive 92/50 67. The Greek Government adds that the and Article 34(1) of Directive 93/38 only discretion given to the national authorities list by way of example certain matters in the choice of criteria for the award of which the contracting entity may take into public contracts presupposes that this account when awarding a contract, to choice is not arbitrary and that the criteria Article 6 EC which requires the integration taken into account are not contrary to the of environmental protection policy into the provisions of the Treaty, in particular its other Community policies, and to the fundamental principles such as the right of Court's judgments in Beentjes and Evans establishment, the freedom to provide ser- Medical and Macfarlan Smith referred to vices and the prohibition of discrimination above, which allow a contracting entity to on grounds of nationality. select the criteria to be taken into account when considering the tenders submitted to it.

68. The Netherlands Government main- tains that the criteria for award operated by the contracting authority must always have an economic dimension. It considers 65. The different submissions do not how- however that this requirement is met in the ever all found on the same considerations. present case, as the city of Helsinki is both the contracting authority and the organi- sation having financial responsibility for environmental policy.

— be objective,

71. Similarly, the Swedish Government maintains that the choice available to the contracting entity is limited to the extent that the criteria for award must relate to — be applicable to all tenders, the contract to be awarded and be appro- priate to identify the economically most advantageous tender. It adds that these criteria must also comply with the provi- sions of the Treaty on the free movement of goods and services. — relate strictly to the purpose of the contract, and

72. According to the United Kingdom — entail an economic advantage to the Government, the provisions of Article 36(1) direct benefit of the contracting auth- of Directive 92/50 and Article 34(1) of ority. I - 7232

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Appraisal 77. In my opinion, such an interpretation is entirely correct. The emissions criteria are irretrievably linked to the configuration of the fleet with which the city of Helsinki wishes to see the bus service operated. A contracting authority cannot be prohibited from requiring the use of a fleet having 'state of the art' characteristics, even if it 74. In order to answer the second question, gives prime importance to one of the the text of Directive 92/50, which in my qualities of such a fleet, namely its char- opinion is applicable in the present case, acteristics in relation to gas emissions and should first be considered. engine noise.

78. More generally speaking, it may be observed that if the city of Helsinki had specifically stated in the call for tenders 75. Article 36(1)(a) of Directive 92/50 pro- that the network should be operated vides that '... the criteria on which the exclusively by gas-driven buses, this would contracting authority shall base the award have been a 'technical specification' relat- of contracts may be... where the award is ing to the 'characteristics of the services made to the economically most advantage- which are covered by the contract' within ous tender, various criteria relating to the the meaning of the Commission's Green contract: for example, 10 quality, technical Paper of 1996, referred to by the Commis- merit, aesthetic and functional character- sion in its submissions. 11 istics, technical assistance and after-sales service, delivery date or period of com- pletion, price'.

80. The greater includes the lesser. If the 83. The two judgments most often referred contracting authority may, in the context of to are those in Beentjes and Evans Medical award criteria, require on its own initiative and Macfarlan Smith referred to above. that buses must be gas-driven, it may also give a certain number of points to under- takings able to operate the service using buses which meet particularly strict pollu- tion requirements, and which only buses of this type are capable of complying with. 84. In the Beentjes judgment, when analys- ing Council Directive 71/305/EEC concern- ing the coordination of procedures for the award of public works contracts, 13 the Court had to rule on the exclusion of a tenderer on the grounds that the tenderer was not in a position to employ long-term 81. It is my opinion that the issue may be unemployed persons. It found first of all answered on the basis of the foregoing that 'such a condition has no relation to the points alone. checking of contractors' suitability on the basis of their economic and financial standing and their technical knowledge and ability or to the criteria for the award of contracts referred to in Article 29 of the directive'. 14

82. If, however, the Court considers that the criteria at issue in the present case should be considered in an abstract manner, that is to say independently of their technical foundations, it is my opinion 85. Nevertheless, the Court did not find the that it may be inferred from Article 36(1 )(a) condition incompatible with Directive of Directive 92/50, and in particular from the list of examples provided in it, that the directives do not necessarily prohibit the 13 — OJ, English Special Edition 1971 (II), p. 682. use of an environmental criterion, such as 14 — Beentjes, paragraph 28.

88. As well as these two judgments, it is worth recalling in the context of this analysis the recent judgment of 26 Septem- ber 2000 in the case of Commission v France. 22 In this judgment, the Court held 86. The Court further stated that '[e]ven if that: the criteria considered above are not in themselves incompatible with the directive, they must be applied in conformity with all the procedural rules laid down in the directive, in particular the rules on advertis- ing'. 17 'Under Article 30(1) of Directive 93/37, the criteria on which the contracting auth- orities are to base the award of contracts are either the lowest price only or, when the award is made to the most economically advantageous tender, various criteria 87. Next, in its judgment in the Evans according to the contract, such as price, Medical and Macfarlan Smith case, the period for completion, running costs, Court, referring to the Beentjes judgment, profitability, technical merit. held that 'in selecting the most economi- cally advantageous tender contracting authorities may choose the criteria which they intend to apply, but their choice may relate only to criteria designed to identify the most economically advantageous tender'. 18 In the Court's opinion it fol- lowed that 'reliability of supplies is one of None the less, that provision does not the criteria which may be taken into preclude all possibility for the contracting account under Article 25 of [Council Direc- authorities to use as a criterion a condition tive 77/62/EEC of 21 December 1976 coor- linked to the campaign against unemploy-

Furthermore, even if such a criterion is not 91. As regards the application of this case- in itself incompatible with Directive 93/37, law to the present matter, I am of the view it must be applied in conformity with all that it may unquestionably be inferred from the procedural rules laid down in that the abovementioned judgments that an directive, in particular the rules on advertis- environmental criterion may be included ing (see, to that effect, on Directive 71/305, in the criteria for the award of a public Beentjes, paragraph 31). It follows that an service contract. The point common to the award criterion linked to the campaign Beentjes and Commission v France judg- against unemployment must be expressly ments is that the Court recognised in each mentioned in the contract notice so that that it was permissible to include a criterion contractors may become aware of its exist- whose purpose was to serve the public ence (see, to that effect, Beentjes, para- interest among the criteria for the award of graph 36).' 23 a public contract. In the Beentjes judgment the criterion in question was the obligation of a tenderer to employ long-term unem- ployed persons, and in Commission v France a condition linked to a local cam- paign against unemployment.

89. Even though these judgments concern the directives relating to public works contracts (Beentjes and Commission v France) and public supply contracts (Evans Medical and Macfarlan Smith), the Court's 92. It is beyond dispute that the protection reasoning is undoubtedly applicable to the of the environment is likewise a criterion in directives relating to public service the public interest. Reference need only be contracts. had to Article 6 EC, which states '[e]nvi-

25 — Beentjes, paragraph 29, and Commission v France, para- graph 50. 26 — Beentjes, paragraph 31, and Commission v France, para- graph 51. 96. First, the criterion must be consistent 27 — Paragraph 36. with all the fundamental principles of 28 — Paragraph 51. Community law, and in particular the 29 — Case C-243/89 Commission v Denmark ('Storebaelt') [1993] ECR I-3353, paragraph 33, and Commission v principle of non-discrimination flowing Belgium, cited above, paragraph 51.

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101. While I can agree with the proposition supported by several parties that in the present case the environmental criterion offered an economic benefit for the city of Helsinki, it is my opinion that an environ- 105. Furthermore, at the very latest since mental criterion may be included in the the discussions on the Kyoto protocol, award criteria without it being necessary to prove that it is economic in nature or offers an economic benefit, direct or indirect, for 30 — My emphasis. the contracting authority. 31 — Paragraph 42.

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everyone is aware that the protection of the 108. The Austrian and Swedish Govern- environment is a matter of considerable ments, as well as the Commission, also importance which concerns all the planet. I submit that the criterion must be linked to therefore do not consider it justifiable to the subject-matter of the contract. For the permit an environmental criterion only Austrian Government, that means that the where it offers an economic benefit for criterion must relate to the service to be the relevant contracting entity. A criterion provided or the manner in which it is to be of this kind may be equally justifiable if it carried out. The Commission goes so far as offers a benefit to other parties than the to say that the criterion must be strictly contracting entity or to the environment in linked to the subject-matter of the contract. general.

109. In the present case, this criterion is clearly met.

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112. I conclude from that that it cannot be Treaty on the right of establishment and required that an environmental criterion the freedom to provide services. 32 must, unlike an employment-related cri- terion, be linked, or strictly linked, to the subject of the contract.

117. It follows from all the above that a criterion linked to the protection of the 113. Lastly, the Commission states that the environment may be included in the award criterion must be objective and apply to all criteria for a contract, provided that the tenders. criterion is consistent with the fundamental principles of Community law, in particular the principle of non-discrimination and the four freedoms, and that it is applied in conformity with all the procedural rules laid down in the directive, in particular the 114. Although it may be questioned how a rules on advertising. criterion which relates to the aesthetic characteristics of a tender, which Article 36 of Directive 92/50 permits, may be objec- tively defined, it is necessary only to observe that in the present case the criteria relating to nitrogen oxide emissions and to noise levels clearly meet this requirement. 118. Before concluding my discussion of this question, it is worth briefly considering an analysis common to the Netherlands and Austrian Governments and the Com- mission which relates to the question of whether criteria touching on the 'quality 115. They are quantifiable or measurable and environment programmes' of the con- and leave no room for a subjective margin tractors may be taken into account in the of appreciation on the part of the con- evaluation of the economically most advan- tracting authority. tageous tender.

120. Reference should be made in this 123. In light of these conclusions, I propose regard to the question as put by the that the national court's question be national court. It asks whether the city of answered by saying that the Community Helsinki '... may, among the criteria for legislation on public procurement, in par- awarding the contract on the basis of the ticular Article 36(1) of Directive 92/50, is economically most advantageous tender, to be interpreted as meaning that a munici- take into account, in addition to 33 the pality which organises, as the contracting tender price and the quality and environ- entity, a tender procedure concerning the ment programme of the transport operator operation of an urban bus transport service and various other characteristics of the bus may include, among the criteria for awar- fleet, [also 34 ] the low nitrogen oxide ding the contract on the basis of the emissions and low noise level...'. economically most advantageous tender, a criterion such as the one in the present case, relating to low nitrogen oxide emissions and low noise levels. That criterion must be applied in conformity with the fundamental principles of Community law, in particular the principle of non-discrimination and the four freedoms, and with all the procedural rules laid down in the relevant directive, in 121. It is therefore clear that the national particular the rules on advertising. court is not asking the Court about the acceptability as award criteria of 'the tender price and the quality and environ- ment programme of the transport operator and various other characteristics of the bus fleet' but only about the acceptability of the criterion relating to 'the low nitrogen oxide emissions and low noise level'.

Position of the parties production unit belonging to the contract- ing entity. Concordia therefore proposes that the third question be answered by stating that the awarding of points for low nitrogen oxide emissions and a reduction in noise levels cannot be allowed, at least where not all operators in the sector in question are able, even in theory, to offer services capable of meeting this award criterion. 125. Concordia submits that the possibility of using buses powered by natural gas, which were in practice the only ones capable of meeting the additional criteria relating to low nitrogen oxide emissions and low noise levels, was a very limited one. At the time of the tender procedure, there was in all Finland only one service station which supplied natural gas. The capacity of the service station, which was not permanently installed, allowed for the refuelling of approximately 15 gas-driven 127. The city of Helsinki first observes that buses. Just before the tender procedure in it was under no obligation to put its bus this case, HKL had ordered 11 new gas- transport operations out to tender, either driven buses. This meant that the service under Community or Finnish law. Given station's capacity was fully utilised and that that a tender procedure inevitably generates no other vehicles could be supplied. Fur- additional work and costs, there would thermore, the only existing service station have been no reason for it to instigate this was not permanently installed. According procedure if it had known that only one to Concordia, it would have been absurd to undertaking, owned by it, was able to offer suppose that operators would invest mil- a fleet which met the relevant conditions or lions in purchasing new vehicles which they if it had truly wished to retain the operation could not use, or at least whose use would of these services for itself. have been very uncertain.

135. However, the Austrian Government draws attention to the 10th recital of European Parliament and Council Directive 132. However, at paragraphs 32 and 33 of 97/52/EC of 13 October 1997 amending its judgment in the Fracasso and Leitschutz Directives 92/50/EEC, 93/36/EEC and 93/37/EEC concerning the coordination of procedures for the award of public service 35 — Case C-27/98 Fracasso and Leitschutz [1999] ECR I-5697, paragraphs 30 and 31, and Commission v Denmark. contracts, public supply contracts and pub-

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lie works contracts respectively, 36 in terms the organisational links between the city of of which contracting authorities may seek Helsinki and HKL have the result that the or accept advice which may be used in the latter might have an influence, in whatever preparation of specifications for a specific form, on the definition of the project procurement, provided that such advice underlying the tender procedure and to does not have the effect of precluding the extent that the involvement of HKL in competition. the development of the tender process would prevent competition, HKL should be excluded from participating.

136. According to the Austrian Govern- ment, it may be inferred from this recital, as also from the principles underlying the directives relating to public procurement, 139. The Swedish Government submits that undertakings which are directly or that the taking into account of the indirectly involved in the preparation of a emissions criterion in the manner in which tender procedure, and undertakings con- this was done in the main proceedings had nected with them where there is a relation- the result that the tenderer who had gas- or ship of control between them, must be alcohol-driven buses available to it was excluded from the process in so far as their rewarded. According to the Swedish Gov- participation would prevent competition. ernment, there was however nothing to prevent the other tenderers from acquiring such buses. These vehicles have been avail- able in the market-place for a number of years.

141. According to the United Kingdom Appraisal Government, the directive does not pro- hibit the award of extra points in evalu- ating offers when it is known beforehand that there are potentially few undertakings able to obtain these extra points, where the contracting authority made it known at the 144. The national court asks whether the tender notice stage that there was a possi- awarding of points for the characteristics bility of obtaining these additional points. relating to nitrogen oxide emissions and noise levels of the fleet is 'not permitted if it is known beforehand that the department operating bus transport belonging to the city which is the contracting entity is able to offer a bus fleet possessing the above characteristics, which in the circumstances only a few undertakings in the sector are 142. The Commission notes that according otherwise able to offer'. to the Court's case-law, 37 compliance with the principle of equality of treatment lies at the heart of the directives relating to public contracts. This means that the conditions of competition between the tenderers must not be distorted. 145. This question effectively asks whether, in these circumstances, the prin- ciple of equality of treatment is contra- vened. I shall consider in turn whether this principle is contravened:

143. Bearing in mind, however, the dif- ferences of view between the parties to the main action, the Commission feels that it is — where a single undertaking 38 is able to unable to determine whether the criteria meet the criterion in the case in ques- applying in the present case contravene the tion; principle of equality of treatment. It would therefore be a matter for the national court to rule on this question and to establish on the basis of objective, relevant and con- sistent evidence whether the said criteria were included exclusively for the purpose — where, in addition, the relevant under- of selecting the undertaking to whom the taking belongs to the contracting auth- contract was awarded or were determined ority. for that purpose.

147. The relevant criterion applied without distinction to all tenders and, it appears, 151. Finally, the specification of the cri- was advertised in accordance with the terion which gave rise to a difference in the requirements of the directive. awarding of points could only be con- sidered to reveal the existence of discrimi- natory tactics if it were to appear that this criterion could not be justified objectively, having regard to the characteristics of the contract and the needs of the contracting authority. 148. In order to decide that the criterion in question had given rise to indirect discrimi- nation towards Concordia, it would not be sufficient to find that that company had been treated differently from HKL, in the sense that the latter had been given points which had not been given to Concordia. 152. As was seen above, a contracting authority cannot be prevented from requi- ring that the service in question be provided using a fleet which possesses the best available technical specifications.

154. Not only would such an approach result in a form of 'levelling down' of the award criteria in eliminating all those which were truly selective, it would equally — either, HKL does not have any strip all content from the right recognised decision-making power or powers of by the Court for the contracting authority economic and financial management of to select the criteria for awarding the its own in relation to the contracting contract as it chooses. 41 I would observe authority; in which case, one would on further consideration that laying down find oneself in a situation to which the criteria having regard to the potential directive did not apply as HKL would tenderers would in my view result in a not be a third party with whom the city denial of the principle of equality of treat- of Helsinki was capable of contracting, ment. If a contracting authority were to remove a criterion from the tender notice on the basis that one or more tenderers were unable to meet it, the authority would in so doing disadvantage a tenderer who was able to comply, by neutralising the advantage he could have made use of. — or, HKL is in fact independent of the city of Helsinki, as I have assumed it to be in my answer to the first question; in which case the fact that HKL was the 'department operating bus transport belonging to the city which is the contracting entity' would not in itself cause a difficulty in relation to the principle of equality of treatment, 155. My conclusion on the first point is unless it could be shown that the therefore that the mere fact of including in inclusion of the criterion which is the a tender notice a criterion which can be met subject of the dispute had no reason by only one tenderer does not contravene other than the favouring of HKL. 42 the principle of equality.

159. In this regard it is worth pausing to consider the arguments of the Austrian Government relating to the participation of a tenderer in the preparation of a tender notice. 162. However, there is in the order for reference no indication that HKL had actually participated in the preparation of the tender notice in the case in question. The city of Helsinki stated at the hearing that such participation did not take place. Similarly, the national court asks no ques- 160. I must agree entirely with that Gov- tion in this regard. I am therefore of the ernment's opinion that a participation of view that it is not appropriate to give a this kind would be illegal as it would formal answer on this point. wholly negate the principle of the equality of treatment of all tenderers. In this con- text, one might refer to the judgment in the case of Ismeri Europa v Court of Audi- tors,43 where the Court treated 'the fact that a person who helps to evaluate and select bids for a public contract has this contract awarded to him' as a 'confusion of interests', adding that such a fact was 'indicative of a serious malfunction of the institution or body concerned' (paragraph 163. As a result, I propose answering the 47). third question by saying that the right of a contracting entity to include in a tender notice, among the criteria for awarding a contract concerning the operation of an urban bus transport service, characteristics relating to nitrogen oxide emissions and noise levels of the fleet used, such as those at issue in the main proceedings, is not 161. From the point of view of the equality called into question by the fact that the of treatment of all the tenderers, it seems to entity's own transport undertaking is one me that a real participation in the prepara- of the few undertakings in the sector able to tion of a tender notice by the tenderer to offer a bus fleet fulfilling those conditions, unless it is shown that this criterion was introduced with the sole aim of favouring 43 — Case C-315/99 P [2001] ECR I-5281. that undertaking.

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(3) The right of a contracting entity to include in a tender notice, among the criteria for awarding a contract concerning the operation of an urban bus transport service, characteristics relating to nitrogen oxide emissions and noise levels of the fleet used, such as those at issue in the main proceedings, is not called into question by the fact that the entity's own transport undertaking is one of the few undertakings in the sector able to offer a bus fleet fulfilling these conditions, unless it is shown that this criterion was introduced with the sole aim of favouring that undertaking.

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