In its judgement of 5 February 2026, the Court of Justice of the European Union ruled in Case C-810/24 that the pre-emption right granted to the promoter within the project financing procedure under Article 183(15) of the former Public Contracts Code (Legislative Decree No. 50/2016) is incompatible with European Union law and, in particular, with Directive 2014/23/EU on the award of concession contracts.
Such right – which originated as early as Law No. 109/1994, but has no equivalent in EU law – entitles the promoter, if not awarded the contract in the tender procedure launched by the contracting authority, to adjust its offer to match that of the successful tenderer or, where the pre-emption right is not exercised, to obtain reimbursement of the costs incurred in preparing the bid.
The Court of Justice, following a referral from the Italian Council of State, held that the pre-emption mechanism is contrary to the principle of equal treatment in procedures for the award of concession contracts. In particular, the Court highlighted that such a mechanism may overturn the outcome of the tender and that, where the pre-emption right is exercised, the unsuccessful promoter’s offer is substantially altered at a stage subsequent to the award, an amendment expressly prohibited by EU law (and on which the Court of Justice has already ruled on several occasions: see judgments of 13 June 2024, BibMedia, C-737/22, EU:C:2024:495; 25 April 1996, Commission v Belgium, C-87/94, EU:C:1996:161).
The Court also found the pre-emption right incompatible with the freedom of establishment under Article 49 of the Treaty on the Functioning of the European Union, insofar as the advantage granted to the promoter is liable to discourage economic operators from other Member States from participating in project financing procedures, thereby producing an anti-competitive effect. Finally, the Court excluded that such regime could be justified on grounds of efficiency and cost-effectiveness of administrative action and subsidiarity, objectives typically associated with project financing procedures, in which the private operator bears the costs of works and services of public interest, as well as of the design phase preceding the tender. These principles, in fact, do not fall within the exhaustive list of derogations from the freedom of establishment under EU law.
The Court of Justice ruled only on the incompatibility of the former project financing framework. In the meantime, the Italian legislature has sought to address the issue by amending Article 193 of Legislative Decree No. 36/2023, introducing a sort of simplified public tender procedure for the selection of the promoter. However, on the one hand, the Court of Justice’s reasoning may also apply where the promoter is selected through such competitive procedure. The Court’s judgment of 5 February 2026 is based on the “distortion” of the tender process caused by the pre-emption right, a factor which is independent of the method used to select the holder of the pre-emption right. On the other hand, the European Commission has initiated infringement proceedings against Italy, also contesting that the promoter selection procedures fail to comply with the minimum requirements of transparency and impartiality under EU law (the initiation of the infringement procedure, concerning a number of provisions of the current Public Contracts Code, is available here).
The issue therefore also arises in relation to the current version of Article 193 of Legislative Decree No. 36/2023. In any event, it is worth considering more broadly the potential impact of the judgment on the use of project financing at the initiative of a private operator. If, as we believe, the judgment marks the end of the pre-emption right, it is not a given that the institution of project financing will suffer the same fate. It is time to consider that the essential element of this procedure lies in the possibility granted to private operators to design, or, in most cases, even conceive, a public work or service. The freedom of initiative of private operators is rooted in Article 41 of the Italian Constitution, with a driving force that constitutes a unique feature in the current public procurement framework. In the past, this prerogative gave the parties submitting the proposal a clear advantage over other market operators, since the contracting authority could assess the proposal, deem it to be of public interest or feasible, and proceed to launch the tender without ever inviting other potential bidders. However, the provisions introduced by the so-called Corrective Decree ensure, from the outset, the possibility of comparing multiple proposals, thereby increasing the transparency of the procedure. It is clear that, for private operators, the risks associated with a potential failure of the initiative increase significantly, together with the substantial costs of the preliminary phase, which are nevertheless mitigated by the statutory possibility of submitting a simplified project.
However, it cannot be overlooked that any public tender procedure, launched on the basis of the promoter’s project and the other documents forming part of the proposal, including the summary of the economic and financial plan, would take place in a context where the aforementioned operator would enjoy a form of “substantive pre-emption right” stemming from the competitive advantage ensured by its full knowledge of said documents (and of any scope for their optimisation). Such an advantageous position is further reinforced by the obligation to award project financing procedures on the basis of the criterion of the most economically advantageous tender, identified according to the best quality-price ratio.
Moreover, it is worth noting that, the Court of Justice, in the judgment under review, did not call into question the right of the unsuccessful promoter to reimbursement of costs incurred in preparing the proposal – up to a maximum of 2.5% of the investment value, pursuant to Article 193 of the current Public Contracts Code – at the expense of the successful tenderer.
These factors are likely to be particularly attractive to more structured operators, willing to assume risk and equipped with adequate financial resources.
In conclusion, while the abolition of the pre-emption right may act as a barrier, making project financing less viable than in the past, it may also represent a new beginning for project financing, which could evolve towards transactions supported by the legal, economic, and technical prerequisites whose absence has often, in the past, led to the failure of hundreds of initiatives and to an enormous waste of public and private resources.
