http://www.epsu.org/a/8731 - Municipalities and departments in France have begun to take advantage of a new form of public company to replace privatised services with public provision.
Legislation adopted in 2010 with all-party support, enables two or more communes or municipalities to create a ‘local public company’ (société publique locale - SPL), 100% owned by public authorities, to carry out local public services, without the need to invite tenders from private companies.
The new French law includes two crucial features, which are designed meet the conditions of the European Court of Justice, which has ruled that work cannot be assigned to municipal companies without private sector tendering, unless they are entirely owned by, and working for, public authorities.
100% ownership and no tendering required
Firstly, a SPL must be 100% owned by public authorities – it cannot ever be owned, even partly, by private companies. Secondly, the authorities which own it can assign it any work they wish, for as long as they wish, without any compulsory tendering from the private sector (although it cannot do work for any authorities which do not own any shares in the SPL).
Previously, municipalities and departments in France could only own ‘mixed’ companies (societies d’économie mixte – SEM) where a private company also held at least 15% of the shares: the number of SEMs fell by over 25% between 1994 and 2007 because they could not be given work without tendering and because they had gained a reputation for fraud
full story at http://www.epsu.org/a/8731
advice EPSU www.epsu.org
