Skip to content

Letter to the European Commission on the highway concession case

Letter to the European Commission on the highway concession case

We have asked the European Commission’s Directorate-General for the Internal Market to investigate the compatibility with EU law of a 35-year highway concession. In our legal assessment, the proposed concession may violate the EU Concession Directive and the EU Public Procurement Directive on several points.


On 9 June 2021, the newly established National Concession Bureau (‘Nemzeti Koncessziós Iroda’) published a Concession Notice in the Hungarian Electronic Public Procurement System. The subject-matter of the concession award procedure is the design, renovation, construction, operation and maintenance of Hungary’s controlled-access highway network (ca. 2000 km motorways and expressways), and the planned duration of the concession is 35 years.

In the letter we pointed out two concerns, which, in our opinion, possibly raise the serious infringement of Directive 2014/23/EU on the award of concession contracts and Directive 2014/24/EU on public procurement, therefore we asked the Commission Services to examine the planned concession in question and assess its conformity with EU law.

In the letter, having examined the relevant European and national legal provisions, we came to the conclusion that the planned contractual arrangement misses key elements of the definition of concession as it is set out in the Concession Directive, namely the transfer of the right to exploit the works and the services and the transfer to the concessionaire of an operating risk in exploiting the works and services, therefore it is in fact not a concession, but a covert public procurement, and consequently it constitutes an infringement of both the Concession Directive and the Public Procurement Directive.

The other point of concern that we raised is the extremely long duration of the planned concession. The Concession Directive provides that for concessions lasting more than five years, the maximum duration of the concession shall not exceed the time that a concessionaire could reasonably be expected to take to recoup the investments made […], and in the recitals the Directive further explains that the duration of a concession should be limited in order to avoid market foreclosure and restriction of competition. In addition, concessions of a very long duration are likely to result in the foreclosure of the market, and may thereby hinder the free movement of services and the freedom of establishment. The Hungarian Public Procurement Act stipulates that if the duration of the works or services concession exceeds 5 years, the Contracting Authority shall support with calculation that the duration of the contract does not exceed the duration within which – based on reasonable assumptions – the Concessionaire recoup the investments made […]

A few weeks ago Transparency International Hungary requested the calculation required in the Public Procurement Act under the Freedom of Information Act. The National Concession Bureau refused to comply with our request, citing confidentiality of preparatory documents relating to a pending case, which is a false explanation in our opinion as the decision of the duration of the concession had been made prior to the submission of the public interest information request by Transparency International Hungary, therefore in this specific regard the case was not pending, and the information sought was not to be deemed preparatory. As a consequence, we do not have any information whether the duration of the planned concession, 35 years can be justified with a calculation in conformity with the Concession Directive and the Public Procurement Act. However, given the extremely long nature of the duration, we believe that there is a real danger of an unjustified restriction of competition and the hinderance of the free movement of services and the freedom of establishment.

Related pages

No data was found