State aid: the Commission opens in-depth investigation into subsidies granted to public transport in Ile-de-France

European Commission

Press Release

Brussels, 11 March 2014

State aid: the Commission opens in-depth investigation into subsidies granted to public transport in Ile-de-France

Following a complaint, the European Commission has opened an in-depth investigation to examine the compatibility with EU state aid rules of subsidies awarded since 1994 to undertakings that provide public transport services in Ile-de-France. According to France, the subsidies awarded between 1994 and 2008 to 235 beneficiaries totalled €263 million. The Commission will check in particular whether the beneficiaries had additional costs linked to a public service obligation and if so, whether there was over‑compensation for the provision of these services. The opening of an in-depth investigation gives interested parties the possibility to comment on the proposed measure. It does not prejudge the outcome of the investigation.

Since 1994, the Ile-de-France Region has introduced a set of measures in favour of undertakings that provide public transport services in the Ile-de-France Region. As such the Region can grant financial aid for improving these services to public authorities that have concluded a contract to operate scheduled bus services with a private company or which operate such services directly. The public authorities transfer this aid to the transport undertaking if it owns the subsidised investments. These measures were used to purchase buses and certain equipment. In 2008, the Commission received a complaint concerning these measures.

France maintains that the subsidies awarded by the Region constitute compensation for public service obligations. This compensation can be granted under EU rules on passenger transport services by rail and by road ( Council Regulation (EC) No 1370/2007). In order to prevent stifling private initiative and to avoid favouring certain undertakings selectively, this Regulation lays down specific criteria: a clearly defined public service obligation, pre‑established compensation parameters, and no over-compensation.

So far, however, the French authorities have not informed the Commission which public service obligation justified payment of this compensation, nor which pre-established objective parameters were used to calculate it, nor how it was possible to avoid over‑compensating the beneficiaries, given the flat-rate nature of the compensation.

Since 2008, the Syndicat des Transports d'Ile-de-France (public transport authority), managed by the Ile-de-France Region, has pursued a system of similar subsidies, which is part of this investigation.

Background

In 2008, the Commission received a complaint concerning the system of subsidies awarded since 1994 to undertakings that operate public transport services in the Ile‑de‑France region.

In its judgment of 10 July 2008, the Tribunal Administratif de Paris annulled the contested proceedings and instructed the Region to submit a new subsidy scheme to the Regional Council on the grounds that the introduction of the current scheme had not been preceded by notification to the Commission. It ordered the Region to repeal the scheme at issue. The Region appealed against this ruling but none the less repealed the contested scheme. On 23 July 2012, the French Conseil d’Etat upheld the judgment at first instance.

The non-confidential version of the decision will be made available under case number SA.26763 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.

Contacts :

Antoine Colombani (+32 2 297 45 13, Twitter: @ECspokesAntoine )

Yizhou Ren (+32 2 299 48 89)