The municipalities in Sweden can use the PBL-legislation to request a land developer to fund new
public infrastructure in the dwelling area where the developer are active. The municipality have
had two options to choose between. To purchase a contract with an entrepreneur that build the
infrastructure paid by the developer, or let the developer both build and pay the infrastructure.
The La Scala-judgment came 2001 from the EG-tribunal. This judgment have by many people
been interpreted as that as public infrastructure in Sweden should be purchased by the
municipalities through LOU.
Therefore, the purpose of this report is to discuss how the land development process has
changed and which problems that have arisen since 2010, when it became customary that the
municipality should procure public streets and sewage facilities under the Swedish Public
Procurement Act (“LOU”). The purpose is also to discuss if this way to proceed satisfies the
purpose of LOU and also discuss if their can be any alternative interpretations of the La Scalajudgment
than have been done so far for Swedish conditions.
The questions that became a consequence of the purpose where answered as follow in the report:
Today, the general rule is that the municipality is to purchase all public streets itself in the land
development process. This rule has replaced the freedom of choosing whether to do so, that
previously existed. Necessary land transfers take place today at an early stage of the process, often
when the zoning plan becomes valid, as compared to before when it took place late in the land
Some problems have arisen in cases when the municipality procures. This leads to the conclusion
that the land development process today has become more risky, significantly more expensive,
and that it takes longer time before the houses are ready for occupants to move in to, than
previously was the case.
To what extent does this new procedure implement LOU’s purpose?
LOU's purpose, to get an effectively use of tax money, is not fulfilled by this procedure because
the municipalities do not have any expenditures, which means that there are no funds which can
be considered “effectively used”. As the municipality has no cost, it is questionable whether it
really is to the municipality that an entrepreneur sells his services, rather than to the land
developer paying for the services. Overall, this means that the purpose is probably not fulfilled by
this new procedure.
In what situations can the LOU procedure be questioned?
The consequences of LOU can be questioned where it leads to major problems that would not
occur if the legislation was more flexible. An example of this is when there is a lone land
developer, who builds on his own property. If the municipality procures this, as happens today,
problems arise in terms of money, time and coordination problems. This because it is more
efficient if the developer that are already active in the area build all necessary infrastructure.
Can any other interpretations of the La Scala-judgment and it´s relationship to the
Swedish development process be found?
One alternative interpret is that the municipal should use LOU on this kind of contracts when
there is a risk that the municipal lose financial resources if they don´t do it. In the Italian
development process there is always a risk that the municipal lose financial resources if they
don´t purchase the contracts. The Swedish land development legislation are structured so the
municipality never take a risk to lose financial recourses if they let the developer build everything
in the area and therefore the municipality never can lose financial recourses in these cases. The
Swedish municipalities don’t get any advantages if they use LOU here because the developer pays
the real cost for all parts of the contract. Therefore, LOU is irrelevant in this part of the