Operators seek to cut off red tape

Date: 26/03/1998

By Peter Chapman

EUROPEAN Commission proposals to reform the EU's public procurement rules have run into opposition from the telecoms industry, which claims they would not do enough to reduce the red tape involved in tendering procedures.

At first sight, the plan unveiled by Internal Market Commissioner Mario Monti earlier this month appeared to exempt telecoms operators from the EU's tough public procurement rules.

But the European Telecoms Network Organisation (ETNO) claims Monti's caveat that only operators working in an "effectively competitive environment" would be exempted means most firms would still face procurement paperwork every time they issued a tender for supplies.

This red tape includes a catalogue of strict legal requirements which have to be met before a contract can be signed. They include limits on contacts between suppliers and customers to discuss technical requirements and the need to publish tenders in the EU's Official Journal.

"We are mystified as to what this 'effective competition' means. We hope it does not hide an attempt by Monti's services to move the goalposts," said ETNO spokesman Neil Gibbs. "In any case, in the context of this debate, a reference to effective competition makes as much sense as a reference to a woman who is half pregnant," he added.

The telecoms sector was kept within the scope of a 1993 procurement directive because, at that time, the industry enjoyed special and exclusive rights in its domestic markets. Officials argued then that it was necessary to ensure operators followed certain basic rules to promote fair play and value for money, even though they did not face the rigours of full competition.

But Gibbs says the telecoms liberalisation which kicked in at the start of this year has put companies under pressure to buy the best supplies at the best price rather than lock themselves into anti-competitive agreements with traditional partners from the old monopoly days. "Now special rights have disappeared, any rationale for regulation of telecoms procurement has also vanished," he insisted.

ETNO is urging Monti to exclude the sector totally from the directive when he finally launches his plans to bring the current old-fashioned system up to date later this year. "The Commission should quit prevaricating and remove telecoms from the scope of EU procurement legislation at the earliest opportunity," insisted Gibbs.

He added that even operators who retained 90% market shares would have to improve efficiency, with or without legislation, if they wanted to hold on to customers in liberalised markets.

Telecoms industry does not like aspects of Commission proposals to reform public procurement legislation.