Award of concession for fire detection systems in conformity with competition law
Bundeskartellamt terminates test proceedings following commitment by the City of Düsseldorf
27.05.2013
The Bundeskartellamt has terminated its test proceedings on award procedures for fire alarm transmission systems and their installation and operation. The authority had examined the concession agreement between the City of Düsseldorf and Siemens and found that it had anti-competitive effects. As a result of the proceedings, the City of Düsseldorf will issue a new tender for the award of a concession agreement for the operation of the alarm transmission system. According to the commitment, the City of Düsseldorf will introduce provisions in the new contract which not only allow the concessionaire which wins the award but also third companies the possibility to become active in this area in Düsseldorf.
Andreas Mundt, President of the Bundeskartellamt: "In recent years we have received many complaints from all over the country about the award and operation of municipal alarm transmission systems. In many cases concession agreements for the operation of the systems were not awarded in public tender procedures. The concessionaire had the exclusive right to operate the alarm transmission systems, often over a period of 10 years and more. This made competition from third parties impossible. With our decision we have opened up the market for the installation and operation of alarm transmission systems to third providers. We expect that this test case will serve as a benchmark for other municipalities in future and that they will follow the example set by the City of Düsseldorf. Property owners with a fire detection system will be able to benefit from this in future."
The municipalities generally commission a private company to operate their alarm transmission systems for fire detection facilities in a concession agreement. Nationwide, Siemens and Bosch currently have the most concessions. The concession agreement of the City of Düsseldorf shares the characteristics of a number of concession agreements in Germany which are problematic under competition law: The exclusive operation of the systems by the concessionaire, contracts running at least ten years with automatic extension, inclusion of all rendered partial performances for the installation and operation of the alarm transmission system.
The concession model now envisaged in the commitment of the City of Düsseldorf no longer provides for the exclusive concessioning of all the individual services for alarm transmission. Above all, the economically important section of this market, i.e. the operation of decentralized transmitters, will now be open to competition. From 2015 property owners in Düsseldorf who are obliged to install a fire detection system will be able to commission not only the concessionaire but also third providers of their choice with the transmission of fire alarm signals.
The Bundeskartellamt has declared the commitment made by the City of Düsseldorf binding. The decision is not yet final. 