The European Commission has referred the Netherlands government to the European Court of Justice because a local authority awarded a contract for building a leisure centre to a contractor without applying procurement rules as the authority owned the land and intended selling the finished development to the developer.
The contract was awarded in 2007 by the Municipality of Eindhoven for construction of the Doornakkers Centre and the Commission has argued the main objective of the contract was not sale of the land but execution of works which falls within EU procurement rules.
"The developer was to realise a specific number of buildings and apartments of a specific size, as well as a specific number of parking spaces and facilities such as a shopping mall and a health centre," said the Commission.
"In the Commission's view the municipality had a decisive influence on the work that was to be constructed. Furthermore, the initiative for the realisation of the project was taken by the municipality and its influence on the project went far beyond the mere exercise of its urban-planning powers."
Two local developers were invited to submit bids, but no others were allowed to compete.
"While the developer is to realise the project at his own risk and does not receive a direct payment from the municipality, the Commission considers that the Municipality of Eindhoven has given the developer a right of exploitation within the meaning of the EU public procurement rules, since the developer acquires for the project a tailor-made building license that gives him the right to construct and to exploit the work foreseen in the contract," it said.
"According to the Commission, the Municipality of Eindhoven also obtained a clear and direct economic benefit by means of this contract within the meaning of the jurisprudence of the Court of Justice in a similar case. Not only is the contract intended to regenerate the urban area, to ensure the availability of specific services for the citizens and to offer great economic advantages to the area, but the municipality also receives a subsidy from the Dutch State for each house to be built."
