Articles
04/12/2017

Legal status of cruise terminals: what implications for the terminal operators who manage them?

Basically, there are two types of terminals in Italian ports: the terminal operators who are typically authorised under a maritime concession under Article 18 of Law No. 84/94 and cruise terminals authorised under Article 6 of the same law, namely passenger/cruise port terminals (even though some of them are at the same time also used as ro-ro ferry terminals)[1].

Now, as a rule, a private terminal operator can freely enter into contract with its suppliers, maintenance technicians as well as with third parties in general. It is however unclear whether cruise terminals are likewise free to contract without being subject to the strict rules on public procurement, as someone suggests[2].

Indeed, cruise terminals have very peculiar traits, in that they can, on the one hand, be classified as terminal operators while, on the other hand, they are responsible for carrying out a public service. This circumstance inter alia allows Port System Authorities to participate in the share capital of such entities, which constitute the only exception in our national port system.

As far as passenger port terminals are concerned, it would seem, at first glance, that the relevant services (including so-called “passenger support services”) should be entrusted to third parties by means of an ad hoc public tender, in accordance with the combined provisions of Article 6 of Law No. 84/94 (now amended as a result of Legislative Decree No. 169/2016) and Ministerial Decree, No. 275 of 14 November 1994[3], in accordance with public procurement procedures.

Hence, the legal status of a cruise terminal is crucial to the terminal operator who manages it and performs the relevant services. The applicability of the Public Procurement Code indeed involves huge administrative costs for terminal operators due to their having to comply with the rules of public procurement procedures, while, on the other hand, any breach of such rules amounts to breach of the general principles of public contracts and, first and foremost, of the par condicio principle.

In light of the above, particularly valuable is decision No. 882 of 5 November 2015 of the Second Division of the Regional Administrative Court of Liguria, in which it is stated that any private company entrusted with cruise traffic management services can subcontract auxiliary and ancillary services related to safety and security of port areas and buildings to third parties without having to comply with public procurement procedural rules. The reason for this is that such services can be considered as an ancillary activity performed under competitive conditions falling outside the scope of public laws.

In particular, the Ligurian judges stated that “the contract for the management of auxiliary and ancillary safety and security services to be performed in buildings and areas of a commercial port, being awarded for purposes –  even if of an instrumental nature – other than the performance of the business related to the exploitation of a geographical area in order to make a port available to maritime carriers, due to its nature as a contract related to an ancillary activity carried out under competitive conditions, does not fall within the scope of the public procurement procedural rules under   Section 3 of the Public Procurement Code”.

In a nutshell, the Regional Court has, in accordance with previous national[4] and European[5] case law, confirmed the exceptional scope of the special sectors discipline, which is limited to expressly stipulated cases. This leads to a strict delimitation of scope, not only from a subjective but also from an objective point of view – in terms of the concrete type of activity carried out by the persons operating in the special sectors under the Code –, with the consequence that no extensive interpretation is allowed.

To conclude, the obligation for a person managing a cruise terminal to comply with the laws and regulations on public procurement procedures still seems applicable, unless in case of ancillary activities connected with one’s own carried out under competitive conditions.

 

 

 

This article is for information purposes only and is not intended as a professional opinion. 
For further information, please contact Luca Brandimarte.

 

 

 

[1] Reference is made to a method used for loading shipments onto a ship without using cranes, as vehicles are wheeled cargo that are loaded and unloaded onto the ship by way of an ad hoc built-in ramp.

[2] Reference is made to Legislative Decree No. 163/2006, as amended by Law No. 125 of 11 August 2014 and by Decree Law No. 133 of 12 September 2014 (“Public Procurement Code”), as amended by Legislative Decree No. 50 of 18 April 2016, converted with amendments into Law No. 96 of 21 June 2017, whereby the “New Public Procurement Code” was introduced.

[3] Reference is made in particular to Ministerial Decree No. 275 of 11 November 1994, “Indication of general-interest services in ports to be provided for consideration to port users”, which, under Article 1, e), classifies passenger port terminals as general-interest services.

[4] See, in particular, decisions No. 315 of 28 May 2007 of the Regional Administrative Court of Emilia Romagna, of 27 February 2008 of the Regional Administrative Court of Lazio, III-ter Division and decision No. 1192 of 9 March 2015 o the Italian Consiglio di Stato, V Division.

[5] See also decision C- 393/06 of 10 April 2008 of the European Court of Justice (Fourth Chamber), in which the Court was asked for a preliminary ruling on the interpretation of Directive 2004/17/EC, namely with reference to the case that a contracting entity performs a business falling within any of the special sectors and also carries out an ancillary activity exercised under competitive conditions, such ancillary activity is not subject to the rules on public procurement procedures. Precisely, the European Court stated that the restricted scope of Directive 2004/17/EC requires its provisions to be interpreted narrowly, its field of application being strictly circumscribed to specific areas of activity.

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