German Car Toll Scheme - Investigative Committee

On 5 November 2020, a top EU official, appearing as a witness before the 2nd Investigative Committee of the German Federal Parliament (InvestComm), clearly rebutted the German transport minister´s allegation that he had "definitely waited for all decisions" before triggering the German passenger car toll scheme and awarding, in December 2018, the pertinent, high risk car toll concession contracts to the winning consortium.

During the relevant period of hefty discussions between the German government and the EU Commission, the witness Martin Selmayr had chaired the cabinet and been the (almost almighty) principal advisor to then EU Commission President Jean-Claude Juncker, which role included leading the legal discussion with the German government on the EU compatibility of the German car toll scheme. The InvestComm report quotes Dr. Selmayr as now stating that no one should ever be so presumptuous as to believe to know for sure what the European Court of Justice (ECJ) might decide in a given case, let alone such a disputed one – a clear blow to the German political actors at the time. The report also quotes Dr. Selmayr as considering, in 2018, "the chance that this would turn out well for the German car toll to be very small indeed".

On 18 June 2019, the ECJ judged the German car toll scheme (whereby the toll would have, by and large, been reimbursed only to German residents via the German car tax) to be in violation of EU law, thereby matter of factly ending the long-standing German plans for a general passenger car toll (or infrastructure charge). The InvestComm now has the task of investigating in depth the conduct of the German Government, in particular the Federal Ministry of Transport (BMVI) and its subordinate authorities, in the time between the signing of the German government coalition agenda in 2017 and the implementation of the infrastructure charge (passenger car toll). That investigation will focus, inter alia, on the award procedure, the negotiation, signing and termination of the car toll concession contracts and the consequences thereof. The preliminary findings are that the German Transport Ministry severely underestimated the risks associated with the ECJ rulings, significantly favoured the winning consortium over other concession bidders, unnecessarily promised a full contract-value indemnification in case the ECJ were to rule against the German government, unnecessarily terminated the concession contracts the very day of the ECJ ruling (although that ruling only required the German government to abandon the car toll reimbursement to German residents, without however torpedoing the car toll scheme altogether), and thus causing the car toll consortium to sue Germany for contractual damages in the amount of approx. EUR 750 million. Given these consequences, the InvestComm will also scrutinize the personal and political responsibilities as well as the information policy of the German Transport Ministry vis-à-vis the German parliament. Finally, the InvestComm will also make recommendations as to consequences to be drawn going forward.

The EU State aid dimension of the car toll concession and its termination has so far not been the subject of publicly known investigations; however, if the negotiation and termination of the concession contracts were to be analysed under EU State aid law, the conclusion might be that the German Transport Ministry granted a number of beneficial treatments to the concession consortium which might well be considered as unlawful and incompatible State aid and the recovery of which might be instrumental for easing the burden on the German federal budget and for avoiding a distortion of competition in the relevant markets.

In 2019, Chatham Partners submitted a (publicly available) expert opinion for the parliamentary group of the Free Democratic Party (FDP) in the German Bundestag, focussing on the predictability of the ECJ ruling and the risks built in the awarded concession contracts. That opinion has now been validated by Dr. Selmayr´s testimony. In January 2020, the InvestComm invited Dr. Marco Núñez Müller, LL.M. (Col.), partner at Chatham Partners and chair of its EU/COMP department, to submit his legal assessment on the EU, public procurement and State aid law issues around the German car toll scheme.