Södertälje’s award of a concession contract was not permissible

'“Correspondingly to what applies regarding the procurement of goods and services being subject to competition through the publication of a contract notice,  the same requirements apply to the award of concession contracts,” observes Rikard Jermsten, Director General and head of the Swedish Competition Authority.

-An important issue in the case is how the value of the concession is to be calculated. According to the applicable legislation the value of a concession shall be the total turnover generated over the duration of the contract. In this case, the Swedish Competition Authority estimates the total value of the concession to approximately SEK 11 million.

“The court’s interpretation of the provisions concerning the calculation of the estimated value of concessions can provide important guidance for other similar procurements,” observes Rikard Jermsten.

The Swedish Competition Authority is now referring the matter to the Administrative Court in Stockholm with the demand that the Municipality shall be required by law to pay SEK 875,000 by way of a fine/procurement claim for the illegal direct award of contract.

A concession is a contract between a contracting authority and a concessionaire, such as a supplier of services, where the supplier is entitled to remuneration in whole or in part from its customers instead of from the contracting authority.

This is the first time that the Swedish Competition Authority applies to a court asking for an imposed procurement fine based on a   direct award of contract in violation of the Swedish Act on Procurement of Concessions.

Read the application, dnr 311/2018 (in Swedish)