That is the warning from a group of organisations representing the construction sector in Europe who gathered together earlier this month to discuss the issue.

The European Construction Industry Federation (FIEC), European International Contractors (EIC), Croatian Employers Association (HUP), European Federation of Builders and Wood Workers (EFBWW), and SGH, met at a conference in Zagreb, Croatia, to discuss third country bids in public procurement, and how to make the construction market fairer.

Afonso Brito, FIEC policy analyst, said, “Over the past decade, we have seen an increasing number of public infrastructure projects being awarded to state-owned enterprises from third countries, particularly China, at extremely low prices that European private companies cannot compete with.

“On top of that, the European Union has opened up its public procurement markets to third countries to a large degree, while many other economies have limited appetite to liberalise market access.�

FIEC called for an EU strategy to promote a “level playing field and fair competition�, although it recognized efforts to address some shortcomings already.

Brito said he wanted to see public procurement leveraged to help achieve a level playing field. “The European Union should only fund procurement policies that are awarded to European companies or companies from countries that have signed an agreement giving them reciprocal access to the EU’s procurement market,� he added.

FIEC also highlighted the importance of preventing non-EU companies from submitting offers that are backed by foreign subsidies.

EIC director Frank Kehlenbach pointed out that every World Trade Organisation (WTO) member is free to join the Government Procurement Agreement (GPA) so that its economic operators can benefit from the open procurement markets.

He highlighted the fact that the EU is promoting third-country GPA accession towards its trade partners. EU trade partners can also ask the EU to negotiate a free trade agreement with a comprehensive procurement chapter. “If, however, a third country is reluctant to choose one of these options, then the acquis Communautaire does not grant economic operators (from such countries) secure access to procurement procedures in the EU, and they may be excluded,� he said.

Meanwhile, a “significant proportion� of the construction community said it wanted to see the notification thresholds for public procurement lowered, especially for smaller EU states, according to FIEC. It said it believed better use should also be made of the European Commission’s ability to open cases on the basis of submissions from interested parties.

HUP director general Irena Weber said the long-term damage to the national economy from unfair competition outweighed short-term savings for public buyers. “Public procurement should be used as a tool to maximise the positive impact of large infrastructure investments on the domestic economy. This can only be ensured through fair market conditions where domestic companies have equal access to contracts,� she said.

A map developed by organisations including FIEC and EIC shows where state-owned enterprises have been successful, unsuccessful and where the result is open on construction contracts across Europe:

Earlier this month, it emerged that two Chinese consortia that expressed an interest in building the world’s first ship tunnel in Norway have not been invited to tender.