Constitutionality Review

Contested Provision

The contested provision envisages that the entities operating the facilities, the substantial repair of which shall be undertaken by the Ministry of Transport and Infrastructure (“Ministry”), shall be obliged to deposit an amount equal to 10% of their annual gross revenue to the State Treasury for the costs of substantial repairs following the transfer of the facilities that have been already, and will be, transferred.

Ground for the Request for Annulment

It was maintained in brief that the contested provision restricted the right to property by means of imposing obligations on the public administrations, that the concepts “substantial repair” and “gross revenue” used in the provision were ambiguous, and that it lacks clarity regarding the calculation of the amounts to be paid to the State Treasury. The contested provision was therefore claimed to be unconstitutional.

The Court’s Assessment

The contested provision, suitable for attaining the aim of ensuring the sustainability of the facilities transferred to local administrations, imposes an obligation to make an annual payment of an amount equal to 10% of the gross revenue to the central administration so as to secure the payment for the costs of the substantial repair works to be undertaken by the central administration to prevent any setbacks in the activities of these facilities. It thus appears that the contested provision allows for the transfer of a certain amount of the revenues of the local administrations, without receiving any corresponding service, to central administration in disregard of the probability that there may be no need for substantial repair on an annual basis and that the actual cost of substantial repair may be lower than the indicated ratio. Therefore, it is evident that the actual cost of the substantial repair works to be performed by the Ministry is not taken into consideration in determining the amount to be paid to the State Treasury. Nor are there any mechanisms for offsetting in cases where the cost of substantial repairs to be performed following the payment to the State Treasury is less than 10% of the gross revenue. Therefore, the Court has concluded that the contested provision does not meet the criterion of being necessary to achieve the pursued aim. 

The Court has accordingly concluded that the provision -envisaging the annual transfer, on a regular basis, to the State Treasury of a certain part of the revenues of the local administrations in return for substantial repair works of the ports and other facilities transferred to the local authorities and municipalities, which will be performed by the Ministry, in disregard of the actual costs of such repairs- constitutes a disproportionate interference with the financial autonomy of the local administrations and falls foul of Article 127 of the Constitution.

Consequently, the contested provision has been found unconstitutional and therefore annulled.