City Council statement on the duties of Kraków5020

The SGEI contract was chosen because, in the opinion of both my subordinate units and the company, this was the most appropriate form of financing the company’s tasks, the same as in other municipal companies. The Company is financed on terms of the Decision of the European Commission of 20 December 2011 on the application of art. 106 section 2 of the Treaty on the Functioning of the European Union to state aid in the form of public service compensation granted to undertakings entrusted with the operation of services of general economic interest.

The contract executed between the parties contains all the legally required terms. In particular, the contractual provisions have been drafted in such a way as to ensure that the company will not receive excessive funding from the municipal budget for the entrusted tasks, but only to the extent that is necessary for the performance of the tasks identified as services of general economic interest.

As there is no legal definition of SGEI in the EU law (except in selected sectors), defining SGEI is the exclusive prerogative of the Member States, which have a great deal of latitude in this regard, and the European Commission’s competence is limited only to challenging apparent errors made by Member States in defining such services. The Commission exercises this power under the supervision of the courts.

The enquiry to the Office of Competition and Consumer Protection was made in connection with the company’s performance of the tasks entrusted to it. The Office of Competition and Consumer Protection issued its opinion in writing on 3 October 2022.

The OCCP’s letter is an opinion of a non-binding nature for the granting entity. The content of the OCCP position did not include conclusions of a nature to exclude the qualification of the described range of services entrusted to the company as being of general economic interest. In particular, the phrase ‘it appears that the task does not constitute an SGEI’, used several times in the letter of 3 October 2022, made it possible to conclude that the opinion (also due to the very general scope of the task-by-task analysis) did not exclude the tasks entrusted to the Company from the range of SGEI services.

The OCCP opinion will be reflected in an annex to the implementation agreement as regards the description of the tasks assigned. In the future, this should exclude the possibility of a general and selective assessment of the scope of the entrustment with a view to correctly classifying the tasks carried out by the Company as being of general economic interest.

Summing up, the SGEI contract concluded with KRAKÓW5020 sp. z o.o. is not defective in law.

Michał Marszałek
Director of the Ownership Supervision Office