Case C‑451/08, Helmut Müller

This reference for a preliminary ruling concerned the interpretation of the concept of “public works contracts” within the meaning of Directive 2004/18.

The Bundesanstalt - the German federal agency responsible for managing public property - was owner of a property known as the “Wittekind barracks’, occupying an area of just under 24 hectares in Wildeshausen (pictured). In October 2005, Wildeshausen town council decided, with a view to returning the land concerned – which covered approximately 3% of developed and non-developed areas of the town – to civilian use, to undertake feasibility studies for an urban planning project.

In October 2006, the Bundesanstalt indicated in statements made on the internet and in the press that it intended to sell Wittekind barracks. On 2 November 2006, Helmut Müller, a property development company, offered to bought the land for EUR 4 million, subject, however, to the condition that an urban development plan be drew up on the basis of its project for used of the land.

Wittekind barracks were closed at the beginning of 2007. In January 2007 the Bundesanstalt launched a call for tenders with a view to selling the property, in its condition at the time, as quickly as possible. Helmut Müller submitted a tender offer of EUR 400 000, which it increased to EUR 1 million on 15 January 2007.

Another property development company, Gut Spascher Sand Immobilien GmbH (‘GSSI’), which was at that time in the process of being set up, submitted a tender offer of EUR 2.5 million. Bundesanstalt assessed the plans submitted by Helmut Müller and GSSI and expressed a preference for GSSI’s project on urban-development grounds, taking the view that it would make Wildeshausen more attractive as a town. It informed the municipal authorities accordingly.

It was then agreed that the property should not be sold until after Wildeshausen town council had approved the project. The Bundesanstalt confirmed that it would respected the town council’s decision.

Wildeshausen town council decided in favour of GSSI’s project, against which Helmut Müller brought an action. In appeal, the referring Court asked a number of questions, which referred not to the seller-purchaser relationship, but were directed rather at the relationship between the municipality of Wildeshausen and GSSI, hence, to the relationship between the public authority with town-planning powers and the purchaser of Wittekind barracks.

The referring court inter alia wished to know whether that relationship might constitute a public works contract within the meaning of that provision.

The Court of Justice held that the concept of “public works contracts” within the meaning of Art. 1(2)(b) of Directive 2004/18 required that the works which were the subject of the contract be carried out for the contracting authority’s immediate economic benefit. The Court held that it was not, however, necessary that the service should take the form of the acquisition of a material or physical object. (see: Case C-399/98 Ordine degli Architetti and Others [2001] and Case C-220/05 Auroux and Others [2007]).

The Court held that with regard to the question whether those conditions were satisfied where the purpose of the intended works was to fulfil an objective in the public interest, the achievement of which was incumbent on the contracting authority, such as the development or coherent planning of part of an urban district. In the Member States of the European Union, the execution of building projects, at least those of a certain size, was normally subject to prior authorisation by the public authority having urban-planning powers. That authority must assess, in the exercise of its regulatory powers, whether the execution of the works was in the public interest. However, it was not the purpose of the mere exercise of urban-planning powers, intended to give effect to the public interest, to obtain a contractual service or immediate economic benefit for the contracting authority, as was required under Art. 1(2)(a) of Directive 2004/18.

 The referring court had also asked whether a public works concession, within the meaning of Art. 1(3) of Directive 2004/18, was excluded in the case where the sole economic operator to which the concession could be granted already owned the land on which the work was to be carried out, or where the concession was granted for an indeterminate period.

The Court pointed out that, under Art. 1(3) of Directive 2004/18, a public works concession “is a contract of the same type as a public works contract except for the fact that the consideration for the works to be carried out consisted either solely in the right to exploit the work or in this right together with payment’.

The Court held that in order for a contracting authority to be able to transfer to the other contracting party the right to exploit a work within the terms of that provision, that contracting authority must be in a position to exploit that work. That would normally not be the case where the only basis for the right of exploitation was the right of ownership of the economic operator concerned.

Moreover, the essential characteristic of the concession was that it was the concessionaire himself who bore the main, or at least the substantial, operating risk (see with regard to concessions relating to public services, Case C‑206/08 Eurawasser [2009]  

The Court concluded that , in circumstances such as those of the case in the main proceedings, there was no public works concession within the meaning of Art. 1(3) of Directive 2004/18, nor did the provisions of Directive 2004/18 apply to a situation in which one public authority sold land to an undertaking, even though another public authority intended to award a works contract in respect of that land but had not yet formally decided to award that contract.