Workshop on State aid & infrastructure · Non-economic activity (public remit) • Exercise of...

Harold Nyssens DG Competition Zagreb 2 July 2015

Workshop on

State aid & infrastructure

Section 1 Notion of state aid & infrastructure

Existence of SA ? Starting point

• Financing of construction infrastructure = SA ?

• Future use of infrastructure : an economic activity or

not (Leipzig-Halle judgment 2011) Recently confirmed

in Black cabs judgment (C-518/13)

• Economic activity = offering goods/services on market

• Not SA when funding of infrastructure used for

"excercise of public powers"

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SA-free infrastructure financing

• Market economy operator principle

• No effect on trade between MS:

• Purely local character (see IP/15/4889 of 29/4/15)

• De Minimis Regulation: less than 200.000 €/3 years

• No distortion of competition: Legal monopoly (in line

with EU law) + confined to this activity (see SA.35948)

• SGEI: all four Altmark conditions fulfilled

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SA at which levels ?

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Infrastructure Owner (e.g. municipality owning

a sports arena)

Infrastructure Operator

Prof. football

Rock band

Amateur rugby

Tenders: Award criteria and procedures

• Question: advantage to operators and users of an infrastructure if

open, transparent, non-discriminatory and unconditional tender ? SGEI Communication / draft Notice on the notion of aid:

very open towards open and restricted procedure; stricter line on negotiated procedure with publication very strict on negotiated procedure without publication Sometimes voluntary commitments from MS (e.g. SA.38302 Port of Salerno: Additional benchmarking)

• Propapier decision (SA 36147): No aid to users when :

• Infrastructure is open to all potential users • Fees cover at least the user's incremental costs 6

Conclusion section 1

a) When does financing of infrastructure involve aid ?

b) Exempted State aid:

• GBER

• SGEI Decision

• Regulation 1370/2007 (land transport)

• Existing State aid scheme

c) State aid to be notified:

• Specific compatibility rules (Guidelines)

• Directly under Articles 93, 106, 107 TFEU 7

Section 2 The GBER & infrastructure

• Promote investments in infrastructure in order to stimulate growth and jobs

• What contribution State aid policy in this context ?

• Avoid harming competing projects and existing infrastructure

• Avoid over-compensation (funding gap analysis)

• Ensure access of different users to infrastructure

Policy context & State aid contribution

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Varying levels of guidance

• Infrastructure is not a uniform notion.

• 4 main scenarios in terms of guidance

• A) Specific guidelines (+ GBER): Airports, Energy

infrastructure, Broadband

• B) Partial guidance (GBER): Local infrastructure,

Sports, Culture and heritage

• C) Well-established case practice: Ports, Rail, …

• D) Evolving case practice: Motorways, Urban

transport, Water & Waste water networks 10

1) Airports

Guidance: 2014 Aviation Guidelines

Aid/No aid: Investment in airport infrastructure generally

considered an economic activity when used to provide

airport services

Compatibility:

• SGEI Decision (airports < 200 000 pax)

• 2014 Aviation Guidelines

• No GBER: but see announcement in recital 1

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Airports - Investment aid

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Allowed only for airports below 5 million passengers per year

No "duplication" (close airport

with spare capacity)

No "ghost airport" (no real

demand)

Only for useful projects (in

terms of mobility,

accessibility, de-congestion

of hubs, regional

development)

Aid limited to the minimum necessary for

implementation of the project

(funding gap + maximum aid intensities)

Airports - Operating aid

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> 3 million passengers operating aid

700,000 – 3 million operating aid

< 700,000

operating aid

operating aid

operating aid

?? ??

4 April 2014

4 April 2024

4 April 2019

transitional period

review by 2018

2) Broadband

• Guidance: 2013 Broadband Guidelines

• Aid/No aid: Investment in BB infrastructure is generally

considered economic

• Compatibility:

• GBER Article 52

• 2013 Broadband Guidelines

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3) Energy infrastructure

• Guidance: EEAG

• Aid/No aid: Investment in energy infrastructure is

generally considered an economic activity

• Compatibility:

• GBER Article 48

• EEAG

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4) Waste infrastructure

• Guidance: EEAG + GBER

• Aid/No Aid: Aid insofar as the infrastructure is intended

for the provision of waste treatment services against

payment

• Compatibility:

• GBER Article 47

• SGEI Decision

• EEAG, section 3.5. 16

5) Research infrastructure

• Guidance: RD&I Framework

• Aid/No Aid: Aid insofar as the infrastructure is used to

perform economic activities

• Compatibility:

• GBER Article 26

• RD&I Framework

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Non aid: Reminder on ancillarity

• If the economic activities performed by the infrastructure remain purely ancillary, its funding will fall outside state aid rules (considered as not entailing state aid).

• Economic activities will be considered as ancillary if they are:

directly related to and necessary for the operation of the infrastructure or intrinsically linked to its main non-economic use, and

limited in scope, i.e. the economic activity does not exceed 20% of the infrastructure's overall annual capacity.

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6) Culture and Heritage

• Guidance: GBER. No guidelines.

• Aid/No Aid: Aid only insofar as the infrastructure is

intended activities which are economic (and have an

effect on trade)

• Compatibility:

• GBER Article 53

• TFEU Article 107(3)(d)

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7) Sports

• Guidance: GBER. No guidelines.

• Aid/No Aid: Investment in stadia and similar

infrastructure may be aid insofar as the facilities are

used for an economic activity (and have an effect on

trade)

• Compatibility:

• GBER Article 55

• TFEU Article 107(3)(c)

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8) Local infrastructure

• Guidance: GBER. No guidelines.

• Aid/No Aid: recital 75 GBER "A number of measures taken by Member States with regard to local infrastructures do not constitute aid (…) for example because there is no effect on trade between Member States…"

• Compatibility:

• GBER Article 56

• TFEU Article 107(3)(c)

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When effect on trade ? (1)

• Package of 29/5/2015 (IP/15/4889)

• Sports/leisure: swimming pool, marinas, outdoors sports centre, community golf clubs

• Health care: emergency or « standard » medical services

• Culture: venues which do not attract foreign visitors (« destinations in themselves »)

• Others: port (Lauwersoog), airport (Isle of Scilly)

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When effect on trade ? (2)

• No presumption: depends on facts = evidence available

• Local commercial radius: will beneficiary attract customers from other Member States? “Local” more likely for services than goods

Less likely when beneficiary is part of national network

• (Potential) impact on investments and establishment must be a) foreseeable (evidence of exchanges in the relevant sector) and b) more than marginal.

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9) Ports

• Guidance: Case practice

• Aid/No Aid: Investment in port infrastructure is economic insofar as the infrastructure is intended for the provision of port services to shipping companies against payment; this excludes "public remit"

• Compatibility:

• SGEI Decision: max 300 000 pax

• TFEU Articles 107(3)(c) or 93 (inland ports/intermodal platforms)

• No GBER: but see announcement in recital 1

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Non-economic activity (public remit)

• Exercise of public powers by the State: exercise of State authority:

maritime traffic control (e.g. Port of Patras - SA.38048, recital 42) police (e.g. Cruise ship terminal in Wismar - SA.39637, recitals 32-33, not yet published) customs (e.g. Port of Katakolo - SA.35738, recitals 17-19) anti-pollution surveillance (e.g. ECJ Case C-343/95, Cali & Figli v Servizi ecologici porto

di Genova, paras. 22 and 23)

• No remuneration for the use of the access infrastructure (public road, rail)

unless the infrastructure is "dedicated" (e.g. rail tracks and utilities in Seaport extension Wismar - SA.39608, recitals 31-34, not yet published)

• Other activities require a case-by-case assessment (e.g. dredging)

SA.35720 Port of Liverpool (recitals 56-58) vs. SA.38302 Port of Salerno (recital 35)

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Recent port cases 1. Seaports:

• SA.39608 and SA.39637 – Germany – Seaport extension in Wismar and Cruise ship terminal in Wismar (April 2015)

• SA.39403 – The Netherlands – Port of Lauwersoog (April 2015)

• SA.38771 – Latvia - Investment aid to the Ventspils Free Port Authority - soil stabilisation (August 2014)

• SA.38048 - Greece - Upgrading of the Port of Patras - 5th pier (June 2014)

2. Inland port:

• SA.38478 - Hungary - Development of the Győr-Gönyű National Public Port (October 2014)

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10) Roads & motorways

• Guidance: Limited case practice

• Aid/No Aid: Investment in toll motorways has in some

cases been considered to involve aid; Motorways for free

public use are considered as general infrastructure.

Road as dedicated infrastructure : economic (Propapier)

• Compatibility:

• TFEU Article 107(3)(c) (e.g. 2014 Greek Motorways)

• TFEU Article 107(3)(b) (e.g. 2014 Oresund )

• SGEI Framework (e.g. French Motorways)

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11) Urban Transport Infrastructure

• Guidance: Very limited case practice

• Aid/No Aid: Infrastructure investment has been

considered economic where the infrastructure was

intended for the provision of transport against payment +

effect on trade (SA.34056 – Cable car for London)

• Compatibility:

• TFEU Article 93 (Cable car for London)

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Summary

• Transport infrastructure is subject to State aid control if it is to be used economically

• Focus of Commission control is funding gap analysis

• State aid control takes sector-specificities into account

• Very few negative decisions in this area (airports)

• Quick decisions possible if good information is provided

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Section 3 Analytical grids

What are the Analytical Grids?

• Checklists to clarify State aid rules applicable to public funding of infrastructure projects

• GRIDS were developed in 2012 for Structural Funds mainly

• Due to recent developments in SA for infrastructure (new GBER, SGEI, guidelines, recent decisions, … ), there is an need to update these GRIDS

• Not only applicable to projects financed with Structural Funds

• Where to find them ?

www.opvavpi.cz/filemanager/files/file.php?file=33764

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Structure of the Analytical Grids

The grids are structured as follows:

• Existence of State aid? ( e.g. Is there economic activity? MEIP? Impact on trade? de minimis?)

• SGEI – no aid if compliance with Altmark criteria

• State aid, but exempted from notification: GBER, SGEI decision, or falling under existing State aid schemes

• State aid, need to notify for SA clearance

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Analytical Grids: which ones exist?

Sector

1. General checklist

2. Airports

3. Broadband

4. Culture infrastructures

5 Sport and multifunctional recreational infrastructures

6. Ports

7. Research infrastructures

8. Water and waste-water

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Thank you!