Concessions Directive (2014/23/EU)

Before 2014, the award of concession contracts in Europe was governed only by Treaty principles (transparency, equal treatment, non-discrimination) rather than a detailed procedural directive. Directive 2014/23/EU changed that, creating a dedicated legal framework that harmonises how EU member states procure concessions while preserving significant flexibility for contracting authorities.

What is the Concessions Directive (2014/23/EU)?

Directive 2014/23/EU was adopted on 26 February 2014, alongside the Public Procurement Directive (2014/24/EU) and the Utilities Directive (2014/25/EU), as part of the EU's 2014 procurement reform package. It entered into force on 17 April 2014 and required transposition into national law by 18 April 2016.

The directive applies to concession contracts above the EU threshold (currently EUR 5,538,000, updated periodically) awarded by contracting authorities and certain contracting entities in the utilities sectors. Its central legal requirement is that the arrangement must transfer substantial operating risk to the concessionaire. If that condition is not met, the contract falls under the standard procurement directives instead.

Key features of the directive include:

A light-touch award procedure. Unlike Directive 2014/24/EU, there is no mandatory open or restricted procedure. Contracting authorities must publish a concession notice in the Official Journal of the EU (OJEU) and comply with minimum time limits, but they may design their own selection and evaluation processes. This flexibility reflects the complexity and long duration of concession arrangements.

Transparency requirements. The concession award procedure must ensure equal treatment, non-discrimination, and transparency. Contracting authorities must set out the characteristics they require in the concession notice, but need not pre-specify exact weightings in the same way as standard procurement.

Contract modification rules. Article 43 sets out the concession modification rules, defining when changes to an awarded concession require a new award procedure. These mirror but are not identical to the modification rules in Directive 2014/24/EU.

Duration limits. Article 18 addresses concession duration, requiring that the term be limited to the period a diligent concessionaire would need to recoup its investment and earn a reasonable return, with the directive noting that unusually long durations may need justification.

Exclusions. The directive excludes certain sectors (water, some audiovisual media, certain air and maritime transport, and gambling) and certain arrangements (in-house awards, inter-authority cooperation) that meet defined criteria.

Why the Concessions Directive matters for bidders

Understanding the directive's scope is the first step before bidding on any European concession. If the opportunity is above the EU threshold and involves genuine operating risk transfer, it is subject to this directive's transparency and equal treatment obligations, which means the authority must publish the opportunity and follow a defined (if flexible) process. Opportunities below the threshold are governed by national rules, which vary significantly across EU member states.

In the UK, following Brexit, the directive was transposed into the Concession Contracts Regulations 2016, which continue to apply as retained law (now amended by the Procurement Act 2023 framework). UK contracting authorities follow similar but not identical rules.

Example

A German federal state authority wishes to award a 25-year road tunnel concession worth EUR 800 million. The authority must publish a concession notice in the OJEU, conduct a transparent selection process, transfer substantial demand risk to the winning concessionaire, and comply with the modification rules in Article 43 if it later wishes to vary the contract. The directive does not prescribe the precise evaluation method, giving the authority discretion to design a dialogue-based process suited to the complexity of the project.

Frequently Asked Questions

Does the directive apply to below-threshold concessions?

No. Below the EU threshold (EUR 5,538,000), national rules apply. However, Treaty principles of transparency and equal treatment still govern cross-border-interest concessions even below the threshold in EU member states. In the UK, the domestic regulations set their own thresholds.

How does Directive 2014/23/EU relate to the other 2014 procurement directives?

The three 2014 directives form a package. Directive 2014/24/EU governs standard public contracts awarded by public authorities. Directive 2014/25/EU governs procurement by utilities (water, energy, transport, postal services). Directive 2014/23/EU governs concessions awarded by both public authorities and certain utilities. A procurement that does not qualify as a concession because it lacks genuine operating risk transfer will be assessed under 2014/24/EU or 2014/25/EU instead.

Was the directive amended after Brexit for UK use?

The Concession Contracts Regulations 2016 transposed the directive into UK law before Brexit. The Procurement Act 2023 has since reformed UK procurement law, and the retained concessions regulations have been amended to align with the new UK framework. UK contracting authorities should consult the current version of the UK regulations rather than the EU directive directly.