Procurement rules for telecoms firms set to be relaxed

Date: 03/12/1998

By Peter Chapman

INTERNAL Market Commissioner Mario Monti plans to unveil a list of telecoms products which could be exempted from the EU's tough rules on public procurement before the end of the month.

The move is part of a raft of reforms to the Union's procurement regime which the Commission promised in a March policy paper.

Under the current rules contained in the EU's utilities procurement directive, which also covers water, energy and transport, strict controls are imposed on operators when they invite companies to bid for contracts, obliging them to comply with certain advertising and procedural requirements.

These restrictions were imposed because of the lack of competition which resulted from decisions by individual member states to grant monopolies or privileged positions to particular operators. Even negotiations between buyer and seller have been policed to ensure contracts were not rigged.

But liberalisation of the telecoms market means operators are under severe competitive pressure to award contracts to the company which makes the best bid, rather than to one of a few favoured suppliers.

This, argues the Commission, means it is no longer necessary to impose extremely strict and onerous rules on the whole of the sector.

Industry experts say the Commission's list of telecoms products which could be exempted will be based on its analysis of which parts of the sector are sufficiently open to competition.

They say the proposal, which follows discussions with groups such as the European telecoms equipment lobby ECTEL, will also take into account the rights to delay liberalisation granted to Portugal and Greece, which do not need to open their markets until 2000 and 2002 respectively.

However, proposals for a similar relaxation of the tendering rules in other sectors are not expected before next Easter.

Unlike in the telecoms sector, where liberalisation is advanced and EU timetables have been respected, the Commission will have to propose totally new directives to update energy, water and transport rules to take account of the more gradual progress towards market opening.

This means that officials will first have to gauge the level of effective competition in sectors ranging from offshore oil production and buses to drinking water and gas and heat distribution.

Meanwhile, in an effort to make changes to the EU's procurement regime which will have a more immediate impact on companies, the Commission also plans to publish calls for tenders free of charge, as from the new year, on its 'Ted' database.

This follows a successful trial since July last year through which the Commission has offered pay-per-view access to the 'S' series of the EU's Official Journal, which contains information about calls for tender.