JUDGMENT OF 11. 1.

2005 — CASE C-26/03

JUDGMENT OF THE COURT (First Chamber)

11 January 2005 *

In Case C-26/03,

REFERENCE for a preliminary ruling under Article 234 EC from the Oberlandes­
gericht Naumburg (Higher Regional Court, Naumburg, Germany), made by decision
of 8 January 2003, received at the Court on 23 January 2003, in the proceedings

Stadt Halle,

RPL Recyclingpark Lochau GmbH

Arbeitsgemeinschaft Thermische Restabfall- und Energieverwertungsanlage

TREA Leuna,

* Language of the case: German.

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THE COURT (First Chamber),

composed of P. Jann, President of the Chamber, J.N. Cunha Rodrigues, E. Juhász

(Rapporteur), M. Ilešič and E. Levits, Judges,

Advocate General: C. Stix-Hackl,

Registrar: R. Grass,

having regard to the written procedure,

after considering the observations submitted on behalf of:

— Stadt Halle, by U. Jasper, Rechtsanwältin,

— Arbeitsgemeinschaft Thermische Restabfall- und Energieverwertungsanlage

TREA Leuna, by K. Heuvels, Rechtsanwalt,

— the French Government, by G. de Bergues and D. Petrausch, acting as Agents,

— the Austrian Government, by M. Fruhmann, acting as Agent,

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— the Finnish Government, by T. Pynnä, acting as Agent,

— the Commission of the European Communities, by K. Wiedner, acting as Agent,

after hearing the Opinion of the Advocate General at the sitting on 23 September
2004,

gives the following

Judgment

1 This reference for a preliminary ruling concerns the interpretation of Article 1(1) of
Council Directive 89/665/EEC of 21 December 1989 on the coordination of the
laws, regulations and administrative provisions relating to the application of review
procedures to the award of public supply and public works contracts (OJ1989 L 395,
p. 33), as amended by Council Directive 92/50/EEC of 18 June 1992 relating to the
coordination of procedures for the award of public service contracts (OJ 1992 L 209,
p. 1), itself amended by European Parliament and Council Directive 97/52/EC of 13
October 1997 (OJ 1997 L 328, p. 1) ('Directive 89/665'). The reference for a
preliminary ruling also concerns the interpretation of Articles 1(2) and 13(1) of
Council Directive 93/38/EEC of 14 June 1993 coordinating the procurement
procedures of entities operating in the water, energy, transport and telecommunica­
tions sectors (OJ 1993 L 199, p. 84), as amended by Directive 98/4/EC of the
European Parliament and of the Council of 16 February 1998 (OJ 1998 L 101, p. 1)
('Directive 93/38').

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2 The reference was made in the course of proceedings between Stadt Halle (City of
Halle) (Germany) and RPL Recyclingpark Lochau GmbH ('RPL Lochau') and
Arbeitsgemeinschaft Thermische Restabfall- und Energieverwertungsanlage TREA
Leuna ('TREA Leuna') concerning the lawfulness, from the point of view of the
Community rules, of the award without a public tender procedure of a contract for
services concerning the treatment of waste by the City of Halle to RPL Lochau, a
majority of whose capital is held by the City of Halle and a minority by a private
company.

Legal background

Community legislation

3 Under Article 1(a) of Directive 92/50, as amended by Directive 97/52 ('Directive

92/50'), 'public service contracts' are 'contracts for pecuniary interest concluded in
writing between a service provider and a contracting authority'. Under Article 1(b)
of that directive, 'contracting authorities' are 'the State, regional or local authorities,
bodies governed by public law, associations formed by one or more of such
authorities or bodies governed by public law'. Article 1(c) of that directive defines
'service provider' as 'any natural or legal person, including a public body, which
offers services'.

4 Under Article 8 of Directive 92/50, '[contracts which have as their object services
listed in Annex I A shall be awarded in accordance with the provisions of Titles III
to VI'. Those provisions essentially contain rules on putting out to tender and on
advertising. Article 11(1) of the directive provides that, in awarding public service

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contracts,'contracting authorities shall apply the procedures defined in Article 1(d),

(e) and (f), adapted for the purposes of this Directive'. The procedures referred to in
that provision are 'open procedures', 'restricted procedures' and 'negotiated
procedures' respectively.

s Category 16 in Annex I A to that directive designates '[s]ewage and refuse disposal

services; sanitation and similar services'.

6 Article 7(l)(a) of Directive 92/50 provides that the directive is to apply to public
service contracts whose estimated value net of value added tax 'is not less than
ECU 200 000'.

7 The second and third recitals in the preamble to Directive 89/665 show that its
purpose is to ensure the application of the Community rules on public procurement
by means of effective and rapid remedies, particularly at a stage when infringements
can be corrected, given that the opening-up of public procurement to Community
competition necessitates a substantial increase in the guarantees of transparency and
non-discrimination.

8 To that end, Article 1(1) and (3) of Directive 89/665 provides:

'1. The Member States shall take the measures necessary to ensure that, as regards
contract award procedures falling within the scope of Directives ... decisions taken
by the contracting authorities may be reviewed effectively and, in particular, as
rapidly as possible in accordance with the conditions set out in the following Articles

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and, in particular, Article 2(7) on the grounds that such decisions have infringed
Community law in the field of public procurement or national rules implementing
that law.

3. The Member States shall ensure that the review procedures are available, under
detailed rules which the Member States may establish, at least to any person having
or having had an interest in obtaining a ... public ... contract and who has been or
risks being harmed by an alleged infringement. In particular, the Member States may
require that the person seeking the review must have previously notified the
contracting authority of the alleged infringement and of his intention to seek
review.'

9 Under Article 2(1) of Directive 89/665:

'1. The Member States shall ensure that the measures taken concerning the review
procedures specified in Article 1 include provision for the powers to:

(a) take, at the earliest opportunity and by way of interlocutory procedures, interim
measures with the aim of correcting the alleged infringement or preventing
further damage to the interests concerned, including measures to suspend or to
ensure the suspension of the procedure for the award of a public contract or the
implementation of any decision taken by the contracting authority;

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(b) either set aside or ensure the setting-aside of decisions taken unlawfully,
including the removal of discriminatory technical, economic or financial
specifications in the invitation to tender, the contract documents or in any other
document relating to the contract award procedure;

(c) award damages to persons harmed by an infringement.

...'

10 Under Article 1 of Directive 93/38:

'For the purposes of this Directive:

2. "public undertaking" shall mean any undertaking over which the public
authorities may exercise directly or indirectly a dominant influence by virtue of
their ownership of it, their financial participation therein, or the rules which
govern it. A dominant influence on the part of the public authorities shall be
presumed when these authorities, directly or indirectly, in relation to an
undertaking:

— hold the majority of the undertaking's subscribed capital, or

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— control the majority of the votes attaching to shares issued by the

undertaking, or

— can appoint more than half of the members of the undertaking's

administrative, managerial or supervisory body;

3. "affiliated undertaking" shall mean ... any undertaking over which the
contracting entity may exercise, directly or indirectly, a dominant influence
within the meaning of paragraph 2 ... .

...'

11 Article 13 of Directive 93/38 provides:

'1. This Directive shall not apply to service contracts which:

(a) a contracting entity awards to an affiliated undertaking;

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 JUDGMENT OF 11. 1. 2005 - CASE C-26/03

provided that at least 80% of the average turnover of that undertaking with respect
to services arising within the Community for the preceding three years derives from
the provision of such services to undertakings with which it is affiliated.

...'

National legislation

12 The order for reference states that reviews in the public procurement field are
governed in German law by the Gesetz gegen Wettbewerbsbeschränkungen (Law
against restrictions of competition). Under Paragraph 102 of that law, 'awards of
public contracts' may be the subject of review. A tenderer or candidate has a
subjective right to compliance with the 'provisions governing the award procedure',
which enables it to enforce against the contracting authority the rights conferred on
it by Paragraph 97(7) of that law in relation to 'the performance or omission of an
act in an award procedure'.

is The order for reference states that, on the basis of those provisions, in accordance
with the view taken in some of the case-law and by some legal writers in Germany, a
review is available in the field of procurement only if the applicant is seeking to have
the contracting authority ordered to act in a particular way in a current formal
award procedure, which means that it is not possible to seek a review if the
contracting authority has decided not to issue a public call for tenders and not
formally to initiate an award procedure. That view is contested, however, in other
decided cases and by other legal writers.

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The main proceedings and the questions referred for a preliminary ruling

14 According to the order for reference, the City of Halle, by decision of the city council
of 12 December 2001, awarded to RPL Lochau a contract to draw up a plan for the
pretreatment, recovery and disposal of its waste, without having formally initiated an
award procedure. At the same time, the City of Halle decided, again without calling
for tenders, to enter into negotiations with RPL Lochau with a view to concluding a
contract with that company concerning the management of the residual urban waste
from 1 June 2005. RPL Lochau would be the investor in the construction of the
thermal waste disposal and recovery plant.

15 RPL Lochau is a limited liability company set up in 1996. Of its capital, 75.1% is held
by Stadtwerke Halle GmbH, whose sole shareholder Verwaltungsgesellschaft für
Versorgungs- und Verkehrsbetriebe der Stadt Halle mbH is wholly owned by the
City of Halle, and 24.9% by a private limited liability company. The national court
describes RPL Lochau as a 'semi-public company' and notes that the allocation of
the shareholdings in the company was not agreed in the company's statutes until the
end of 2001, when the award of the contract for carrying out the project at issue was
envisaged.

16 The national court also observes that RPL Lochau's objects are the operation of
recycling and waste treatment plants. Resolutions of the general meeting of
shareholders are adopted either by a simple majority or by a majority of 75% of the
votes. The commercial and technical management of the company is currently
contracted out to another undertaking, and the City of Halle is entitled inter alia to
audit the accounts.

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17 On learning of the award of the contract outside the procedure laid down by the
Community rules in the field of public procurement, TREA Leuna, which was also
interested in providing the services, opposed the decision of the City of Halle and
made an application to the Procurement Board of the Regierungspräsidium Halle for
the City of Halle to be ordered to issue a public call for tenders.

18 The City of Halle argued in its defence that, in accordance with the national
legislation referred to in paragraphs 12 and 13 above, the application was
inadmissible since it, as contracting authority, had not formally initiated an award
procedure. Furthermore, RPL Lochau was really an emanation of the City of Halle,
since it was controlled by it. There was therefore an 'in-house operation' to which
the Community rules on public procurement did not apply.

19 The Procurement Board allowed TREA Leuna's application, on the ground that,
even in the absence of an award procedure, decisions of the contracting authority
ought to be subject to review. It also considered that in the present case there was no
question of an 'in-house operation', since the private minority shareholding
exceeded the threshold of 10% above which, in accordance with the German
legislation on limited companies, there is a minority with certain specific rights.
Moreover, it could be predicted with sufficient certainty that the activity performed
for the City of Halle by RPL Lochau would make use of only 61.25% of its capacity,
so that, in order to find outlets for the remainder of its capacity, the company would
be obliged to look for orders in the market in which it operated.

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20 The City of Halle appealed to the Oberlandesgericht Naumburg, which decided to

stay the proceedings and refer the following questions to the Court for a preliminary
ruling:

'1. (a) Does the first sentence of Article 1(1) of [Directive 89/665] require Member
States to ensure that the decision of a contracting authority not to award a
public contract in a procedure which complies with the directives relating to
the award of public contracts may be reviewed effectively and as rapidly as
possible?

(b) Does the first sentence of Article 1(1) of [Directive 89/665] require Member
States to ensure that decisions of contracting authorities made prior to the
issue of a formal invitation to tender, in particular the decision on the
preliminary questions of whether a particular procurement process falls
within the personal or material scope of the directives relating to the award
of public contracts or exceptionally is outside the scope of procurement law,
may be reviewed effectively and as rapidly as possible?

(c) If Question [1(a)] is answered in the affirmative and Question [1(b)] is

answered in the negative:

Is the obligation of a Member State to ensure that the decision of a

contracting authority not to award a public contract in a procedure which
complies with the directives relating to the award of public contracts may be
reviewed effectively and as rapidly as possible satisfied if the availability of
review procedures depends on a specified, formal stage in the procurement
procedure having been reached, for example the commencement of oral or
written contractual negotiations with a third party?

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2. (a) Where a contracting authority such as a regional or local authority intends

to conclude in writing, with an entity which is formally distinct from it ("the
contracting partner"), a service contract for pecuniary interest which would
fall within [Directive 92/50], and that contract would exceptionally not be a
public service contract within the meaning of Article 1(a) of [Directive
92/50] if the contracting partner were to be regarded as part of the public
administration or, as the case may be, of the contracting authority's
undertaking (a "procurement-exempt self-supply"), does the mere fact that a
private undertaking is a shareholder in the contracting partner always
preclude the classification of such a contract as a procurement-exempt self-
supply?

(b) If Question [2(a)] is answered in the negative:

In what circumstances is a contracting partner whose shareholders include a

private person (a "semi-public company") to be regarded as part of the
public administration or, as the case may be, of the contracting authority's
undertaking? In particular:

— Does "control" by the contracting authority, for example within the

meaning of Articles 1(2) and 13(1) of [Directive 93/38] as amended by the
[Act concerning the conditions of accession of the Republic of Austria,
the Republic of Finland and the Kingdom of Sweden and the adjustments
to the Treaties on which the European Union is founded (OJ 1994 C 241,
p. 21, and OJ 1995 L 1, p. 1)] and by Directive 98/4/EC of the European

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Parliament and of the Council of 16 February 1998 (OJ 1998 L 101, p. 1),
suffice, from the point of view of structure and degree of control, for a
semi-public company to be regarded as part of the contracting authority's
undertaking?

— Does any influence the private co-shareholder in the semi-public

company may legally have on the contracting partner's strategic
objectives and/or individual decisions relating to the management of its
undertaking preclude regarding the semi-public company as part of the
contracting authority's undertaking?

— Does a comprehensive right of direction, in respect only of decisions on

concluding the contract and providing the services concerning the
specific procurement procedure, suffice, from the point of view of
structure and degree of control, for a semi-public company to be
regarded as part of the contracting authority's undertaking?

— Does the fact that at least 80% of the undertaking's average turnover in
the services sector within the Community during the last three years
derives from providing those services for the contracting authority or for
undertakings affiliated to or to be regarded as part of the contracting
authority, or, where the mixed undertaking has not yet carried on
business for three years, that it is to be expected by way of forecast that
that 80% rule will be fulfilled, suffice, from the point of view of carrying
out the essential part of its activities for the contracting authority, for a
semi-public company to be regarded as part of the contracting authority's
undertaking?'

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The questions referred for a preliminary ruling

21 To give the national court a useful and coherent answer, the questions referred
should be distinguished and considered in two groups, according to their content
and subject-matter.

Question 1(a), (b) and (c)

22 By this first series of questions, the national court essentially asks whether Article 1
(1) of Directive 89/665 must be interpreted as meaning that the Member States'
obligation to ensure that effective and rapid remedies are available against decisions
taken by contracting authorities extends also to decisions taken outside a formal
award procedure and decisions prior to a formal call for tenders, in particular the
decision on whether a particular contract falls within the personal or material scope
of Directive 92/50, and from what moment during a procurement procedure the
Member States are obliged to make a remedy available to a tenderer, candidate or
interested party.

23 It must be observed, first, that Directive 92/50 was adopted, as stated in the first and
second recitals in its preamble, in the context of the measures necessary to
implement the internal market, in other words an area without internal frontiers in
which the free movement of goods, persons, services and capital is ensured. It is
apparent from the fourth and fifth recitals in the preamble to that directive that, as
the directive's aim is to bring about an opening-up of public procurement in the field
of services in conditions of equal treatment and transparency, it must be applied by
all contracting authorities.

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24 It must be noted, next, that the provisions of Directive 92/50 set out clearly the
conditions which make it obligatory for the rules in Titles III to VI of that directive
to be applied by all contracting authorities, with the exceptions to the application of
those rules being listed exhaustively in the directive itself.

25 Consequently, where those conditions are satisfied, in other words where an

operation falls within the personal and material scope of Directive 92/50, the public
contracts in question must, by virtue of Article 8 taken together with Article 11(1) of
that directive, be awarded in accordance with the provisions of Titles III to VI of the
directive, that is to say, they must be made the subject of a call for tenders and be
adequately advertised.

26 That obligation is binding on contracting authorities with no distinction between

public contracts awarded by them in order to fulfil their task of meeting needs in the
public interest and those which are unrelated to that task (see, to that effect, Case
C-44/96 Mannesmann Anlagenbau Austria and Others [1998] ECR I-73, paragraph
32).

27 To give an answer to the national court , the expression 'decisions taken by the
contracting authorities' in Article 1(1) of Directive 89 / 665 must be examined . Since
that concept is not expressly defined in the directive, its scope must be determined
on the basis of the wording of the relevant provisions of the directive and the
objective of effective and rapid judicial protection pursued by it.

28 The wording of Article 1(1) of Directive 89 / 665 assumes , by using the words 'as
regards ... procedures' , that every decision of a contracting authority falling under
the Community rules in the field of public procurement and liable to infringe them
is subject to the judicial review provided for in Article 2(1)(a) and (b) of that

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directive (see, to that effect, Case C-92/00 HI [2002] ECR I-5553, paragraph 37, and
Case C-57/01 Makedoniko Metro and Mikhaniki [2003] ECR I-1091, paragraph 68).
It thus refers generally to the decisions of a contracting authority without
distinguishing between those decisions according to their content or time of
adoption.

29 Article 2(1)(b) of Directive 89/665 provides, moreover, for the possibility of

annulling unlawful decisions of the contracting authorities in relation to the
technical and other specifications not only in the invitation to tender but also in any
other document relating to the award procedure in question. That provision can
therefore include documents containing decisions taken at a stage prior to the call
for tenders.

30 That broad meaning of the concept of a decision taken by a contracting authority is

confirmed by the Court's case-law. The Court has already held that Article 1(1) of
Directive 89/665 does not lay down any restriction with regard to the nature and
content of the decisions it refers to (Case C-81/98 Alcatel Austria and Others [1999]
ECR I-7671, paragraph 35). Nor may such a restriction be inferred from the wording
of Article 2(1)(b) of that directive (see, to that effect, Alcatel Austria and Others,
paragraph 32). Moreover, a restrictive interpretation of the concept of a decision
amenable to review would be incompatible with the provision in Article 2(1)(a) of
that directive which requires the Member States to make provision for interim relief
procedures in relation to any decision taken by the contracting authorities (HI,
paragraph 49).

31 In line with this broad interpretation of the concept of a decision amenable to

review, the Court has held that the contracting authority's decision prior to the
conclusion of the contract as to the tenderer to whom the contract will be awarded
must in all cases be open to review, regardless of the possibility of obtaining an
award of damages once the contract has been concluded (Alcatel Austria and
Others, paragraph 43).

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32 The Court has also held, referring to the objective of abolishing obstacles to the free
movement of services pursued by Directive 92/50 and to the objectives, wording and
scheme of Directive 89/665, that the contracting authority's decision to withdraw
the invitation to tender for a public service contract must be open to a review
procedure, in accordance with Article 1(1) of Directive 89/665 (see, to that effect, HI,
paragraph 55).

33 In this respect, as the Advocate General observes in point 23 of her Opinion, the
contracting authority's decision not to initiate an award procedure may be regarded
as the counterpart of its decision to terminate such a procedure. Where a
contracting authority decides not to initiate an award procedure on the ground that
the contract in question does not, in its opinion, fall within the scope of the relevant
Community rules, such a decision constitutes the very first decision amenable to
judicial review.

34 Having regard to that case-law and to the objectives, scheme and wording of
Directive 89/665, and in order to preserve the effectiveness of that directive, it must
be concluded that any act of a contracting authority adopted in relation to a public
service contract within the material scope of Directive 92/50 and capable of
producing legal effects constitutes a decision amenable to review within the meaning
of Article 1(1) of Directive 89/665, regardless of whether that act is adopted outside
a formal award procedure or as part of such a procedure.

35 Not amenable to review are acts which constitute a mere preliminary study of the
market or which are purely preparatory and form part of the internal reflections of
the contracting authority with a view to a public award procedure.

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36 On the basis of those considerations, the approach of the City of Halle — according
to which Directive 89/665 does not require judicial protection outside a formal
award procedure, and the contracting authority's decision not to initiate such a
procedure cannot be the subject of review, nor indeed can the decision as to whether
a public contract falls within the scope of the relevant Community rules — should
not be adopted.

37 The effect of that approach would be to make the application of the relevant
Community rules optional, at the option of every contracting authority, even though
that application is mandatory where the conditions of application are satisfied. Such
an option could lead to the most serious breach of Community law in the field of
public procurement on the part of a contracting authority. It would substantially
reduce the effective and rapid judicial protection aimed at by Directive 89/665, and
would interfere with the objectives pursued by Directive 92/50, namely the
objectives of free movement of services and open and undistorted competition in
this field in all the Member States.

38 As to the time from which such a possibility of review is open, it must be noted that
no such time is formally laid down in Directive 89/665. However, having regard to
that directive's objective of effective and rapid judicial protection, in particular by
interlocutory measures, it must be concluded that Article 1(1) of the directive does
not authorise Member States to make the possibility of review subject to the fact
that the public procurement procedure in question has formally reached a particular
stage.

39 On the basis of the consideration that, in accordance with the second recital in the
preamble to that directive, compliance with the Community rules must be ensured
in particular at a stage at which infringements can still be corrected, it must be

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concluded that an expression of the will of the contracting authority in connection

with a contract, which comes in whatever way to the knowledge of the persons
interested, is amenable to review where that expression has passed the stage referred
to in paragraph 35 above and is capable of producing legal effects. Entering into
specific contractual negotiations with an interested party constitutes such an
expression of will. The obligation of transparency, to which the contracting
authority is subject in order to make it possible to verify that the Community rules
have been complied with (HI, paragraph 45), should be noted in this respect.

40 As to the persons to whom review procedures are available, it suffices to state that
under Article 1(3) of Directive 89/665 the Member States must ensure that review
procedures are available at least to any person having or having had an interest in
obtaining a public contract who has been or risks being harmed by an alleged
infringement (see, to that effect, the judgment of 24 June 2004 in Case C-212/02
Commission v Austria, not published in the ECR, paragraph 24). The formal capacity
of tenderer or candidate is not thus required.

41 In the light of the foregoing, the answer to Question 1(a), (b) and (c) must be that
Article 1(1) of Directive 89/665 must be interpreted as meaning that the obligation
of the Member States to ensure that effective and rapid remedies are available
against decisions taken by contracting authorities extends also to decisions taken
outside a formal award procedure and decisions prior to a formal call for tenders, in
particular the decision on whether a particular contract falls within the personal and
material scope of Directive 92/50. That possibility of review is available to any
person having or having had an interest in obtaining the contract in question who
has been or risks being harmed by an alleged infringement, from the time when the
contracting authority has expressed its will in a manner capable of producing legal
effects. The Member States are not therefore authorised to make the possibility of
review subject to the fact that the public procurement procedure in question has
formally reached a particular stage.

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Question 2(a) and (b)

42 By this second series of questions, which should be considered together, the national
court essentially asks whether, where a contracting authority intends to conclude
with a company governed by private law, legally distinct from the authority and in
which it has a majority capital holding and exercises a certain control, a contract for
pecuniary interest relating to services within the material scope of Directive 92/50, it
is always obliged to apply the public award procedures laid down by that directive,
merely because a private company has a holding, even a minority one, in the capital
of the company with which it concludes the contract. If that question is answered in
the negative, the national court asks what the criteria are by reference to which it
should be considered that the contracting authority is not subject to such an
obligation.

43 This question concerns the particular situation of a 'semi-public' company, set up

and functioning in accordance with the rules of private law, from the point of view
of the obligation of a contracting authority to apply the Community rules in the field
of public procurement where the conditions for such application are satisfied.

44 On this point, the principal objective of the Community rules in the field of public
procurement, as stated in connection with the answer to Question 1, should be
recalled, namely the free movement of services and the opening-up to undistorted
competition in all the Member States. That involves an obligation on all contracting
authorities to apply the relevant Community rules where the conditions for such
application are satisfied.

45 The obligation to apply the Community rules in such a case is confirmed by the fact
that in Article 1(c) of Directive 92/50 the term 'service provider', that is, a tenderer

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for the purposes of the application of that directive, also includes 'a public body,
which offers services' (see Case C-94/99 ARGE [2000] ECR I-11037, paragraph 28).

46 Any exception to the application of that obligation must consequently be interpreted

strictly. Thus the Court has held, concerning recourse to a negotiated procedure
without the prior publication of a contract notice, that Article 11(3) of Directive
92/50, which provides for such a procedure, must, as a derogation from the rules
intended to ensure the effectiveness of the rights conferred by the EC Treaty in
relation to public service contracts, be interpreted strictly and that the burden of
proving the existence of exceptional circumstances justifying the derogation lies on
the person seeking to rely on those circumstances (Joined Cases C-20/01 and
C-28/01 Commission v Germany [2003] ECR I-3609, paragraph 58).

47 In the spirit of opening up public contracts to the widest possible competition, as the
Community rules intend, the Court has held, with reference to Council Directive
93/36/EEC of 14 June 1993 coordinating procedures for the award of public supply
contracts (OJ 1993 L 199, p. 1), that that directive is applicable in the case where a
contracting authority plans to conclude a contract for pecuniary interest with an
entity which is legally distinct from it, whether or not that entity is itself a
contracting authority (Case C-107/98 Teckal [1999] ECR I-8121, paragraphs 50 and
51). It is relevant to note that the other contracting party in that case was a
consortium consisting of several contracting authorities, of which the contracting
authority in question was also a member.

48 A public authority which is a contracting authority has the possibility of performing

the tasks conferred on it in the public interest by using its own administrative,
technical and other resources, without being obliged to call on outside entities not
forming part of its own departments. In such a case, there can be no question of a

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contract for pecuniary interest concluded with an entity legally distinct from the
contracting authority. There is therefore no need to apply the Community rules in
the field of public procurement.

49 In accordance with the Court's case-law, it is not excluded that there may be other
circumstances in which a call for tenders is not mandatory, even though the other
contracting party is an entity legally distinct from the contracting authority. That is
the case where the public authority which is a contracting authority exercises over
the separate entity concerned a control which is similar to that which it exercises
over its own departments and that entity carries out the essential part of its activities
with the controlling public authority or authorities (see, to that effect, Teckal,
paragraph 50). It should be noted that, in the case cited, the distinct entity was
wholly owned by public authorities. By contrast, the participation, even as a
minority, of a private undertaking in the capital of a company in which the
contracting authority in question is also a participant excludes in any event the
possibility of that contracting authority exercising over that company a control
similar to that which it exercises over its own departments.

50 In this respect, it must be observed, first, that the relationship between a public
authority which is a contracting authority and its own departments is governed by
considerations and requirements proper to the pursuit of objectives in the public
interest. Any private capital investment in an undertaking, on the other hand,
follows considerations proper to private interests and pursues objectives of a
different kind.

51 Second, the award of a public contract to a semi-public company without calling for
tenders would interfere with the objective of free and undistorted competition and
the principle of equal treatment of the persons concerned, referred to in Directive
92/50, in particular in that such a procedure would offer a private undertaking with
a capital presence in that undertaking an advantage over its competitors.

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 STADT HALLE AND RPL LOCHAU

52 The answer to Question 2(a) and (b) must therefore be that, where a contracting
authority intends to conclude a contract for pecuniary interest relating to services
within the material scope of Directive 92/50 with a company legally distinct from it,
in whose capital it has a holding together with one or more private undertakings, the
public award procedures laid down by that directive must always be applied.

53 In view of that answer, there is no need to answer the national court's other
questions.

Costs

54 Since these proceedings are, for the parties to the main proceedings, a step in the
action pending before the national court, the decision on costs is a matter for that
court. Costs incurred in submitting observations to the Court, other than the costs
of those parties, are not recoverable.

On those grounds, the Court (First Chamber) rules as follows:

1. Article 1(1) of Council Directive 89/665/EEC of 21 December 1989 on the

coordination of the laws, regulations and administrative provisions relating

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to the application of review procedures to the award of public supply and

public works contracts, as amended by Council Directive 92/50/EEC of 18
June 1992 relating to the coordination of procedures for the award of
public service contracts, itself amended by European Parliament and
Council Directive 97/52/EC of 13 October 1997, must be interpreted as
meaning that the obligation of the Member States to ensure that effective
and rapid remedies are available against decisions taken by contracting
authorities extends also to decisions taken outside a formal award
procedure and decisions prior to a formal call for tenders, in particular
the decision on whether a particular contract falls within the personal and
material scope of Directive 92/50, as amended. That possibility of review is
available to any person having or having had an interest in obtaining the
contract in question who has been or risks being harmed by an alleged
infringement, from the time when the contracting authority has expressed
its will in a manner capable of producing legal effects. The Member States
are not therefore authorised to make the possibility of review subject to the
fact that the public procurement procedure in question has formally
reached a particular stage.

2. Where a contracting authority intends to conclude a contract for pecuniary

interest relating to services within the material scope of Directive 92/50, as
amended by Directive 97/52, with a company legally distinct from it, in
whose capital it has a holding together with one or more private
undertakings, the public award procedures laid down by that directive
must always be applied.

[Signatures]

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