Anita Gyürkés State Aid Monitoring Office Prime Minister s Office, Hungary 23 October 2015

Transcription

1 Anita Gyürkés State Aid Monitoring Office Prime Minister s Office, Hungary 23 October 2015

2 1. Development of Ports 1. The Transport Operational Program 2. The State Aid framework of infrastructure development 3. Notification of an aid scheeme 4. Notification of single developments 1. Győr-Gönyű 2. Baja 3. Mohács 2. Development of public roads 2

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4 July 2009 Priority axes Improving the international road accessibility of the country and the regional centres; Improving the international railway and waterway accessibility of the country and the regional centres; Improving of regional accessibility; Linking up the modes of transport and improving the intermodality and the transport infrastructure of economic centres; Improving urban and suburban public transport; Technical assistance.

5 Objectives: Increasing the intermodality of national and regional transport, Improving the accessibility in economical and environment friendly ways with linking up various modes of transport Linking up road, rail and inland waterway Modal shifting

6 Open calls for application for development of port infrastructure Preferences: - Contribution to regional development; - Development of environmentally friendly transport; - Increase in the volume of goods received in the centres; - Increase in the proportion of intermodal freight transport.

7 TEN-T network the backbone network for long distance freight transport in the EU Corridor VII in Hungary the 378 km section of the River Danube 7 inland ports: Győr-Gönyű, Komárom, Budapest- Csepel, Dunaújváros, Paks, Baja, Mohács

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9 Article 107 (1) Save as otherwise provided in the Treaties, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favoring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market

10 Not all public measure is State Aid - cumulative conditions 1.Transfer of state resources 2.To an undertaking (economic activity) 3.Conferring an economic advantage 4.Selectively 5.By distorting competition 6.By effecting trade 10

11 1. The building of infrastructure is public remit The activity is not an economic activity the measure does not contain State Aid 2. The whole population benefits from advantage arising from the infrastructure development projects The measure is not selective the measure does not contain State Aid 11

12 The judgment of the General Court in case Leipzig-Halle T-443/08. Freistaat Sachsen and Land Sachsen- Anhalt versus European Commission and T-455/08. Mitteldeutsche Flughafen AG and Flughafen Leipzig- Halle GmbH versus European Commission 12

13 The key question of the State Aid scrutiny of an infrastructure measure is the future use of the infrastructure if the infrastructure is used for an economic activity itt falls within the scope of Art (1) TFEU 13

14 The operation if airport infrastructure is an economic Activity (C-82/01 P Aéroports de Paris versus COM) The building of the airport infrastructure cannot be separated from its operation the economic nature of the latter determinates the classification of the former irrelevant, whether A private investor has had invested the leak of profitability can only be taken into account at the level of compatibility 14

15 Not an economic activity (no State Aid - Public safety, police - Fire service - Customs - Air traffic control 15

16 What to do??? At the time of the planning of the infrastructure measure it has to be examined does the financing of the infrastructure contain State? what could be the legal basis of the compatibility? 16

17 Block exempted measures: General Block Exemption Regulation (651/2014/EU) COM decision on services of general economic interest (2012/21/EU) Council regulation on public transport services (1370/2007/EC) COM approval Guidelines, frameworks (airport broadband R&D ) Art 107. and 93. TFEU 17

18 Notification based on Art. 93 TFEU Aids shall be compatible with the Treaties if they meet the needs of coordination of transport or if they represent reimbursement for the discharge of certain obligations inherent in the concept of a public service. COM: not enough experience for approving a program case by case notification 18

19 Procedure Intensive pre-notification contacts Notification: 14 July 2014 Request for additional information: 1 August 2014 Answer: 25 August 2014 (also language waiver) Decision. 1 October

20 The measure - Development of the port Győr-Gönyű - Modal shift from rail and road to inland water - Planned investments: - Construction of a vertical embankment wall and 4 new berths, - Construction of crain and loading areas behind the embankment, - Development of direct railway connection - Construction of service roads. - Total investment costs: 20.5 million EUR 20

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22 Competition context 1. Ports Seaports Inland ports Compete with other seaports Compete mainly with road and lesser with rail The port today: six docks performing bulk cargo loading, heavy, oversized, liquid and hazardous cargo, RO-RO loading, outdoor and indoor storage. Annual freight volume: 207 thousand tons 22

23 Competition context 2. Impact on compeeting ports - Cachment area - Potential competitors - 3 ports - Komárom, Komrno and Bratislava - 1 container terminal Dunajska Stred currently no competition since the competitors are specialized in different types of traffic Impact on port fees accessibility to all users on the average fee level in Hungary + max. 10% 23

24 The beneficiaries: Owner the development will be state property the ownership rights will be excercised by MNV and ÉDUVIZIG Manager MAHART User selected via open, fair and broadly published non-discriminatory tendering procedure 24

25 Cash flows of the actors of the project 25

26 Financing of the project financial funding gap analysis for 25 years - expected net revenue: EUR - discounted investment costs: EUR financial net present value: EUR the project is not financially viable without state support 26

27 State Aid assessment I. owner/manager 1. Undertaking - MNV, ÉDUVIZIG and Mahart 100% state owned companies exploiting infrastructure commercially economic activity undertaking 2. State resource/imputability - Measure finananced from the Cohesion Fund Sources - Projects selected directly by the state state resource/imputable 27

28 State Aid assessment 3. Selectivity - Financing is granted specifically to the selected beneficiaries selective 4. Economic advantage - The measure (non refundable financial instrument) covers the investment costs instead of the beneficiaries own resources advantage 4. Distortion of competition and effect on trade - The measure is able to strengthen the position of the beneficiaries compared to other undertakings distortion of competition and negative effect on intra EU trade 28

29 State Aid assessment II. future operators and lessees - Chosen on the basis of public, open and non-conditional tender; - Transparent and non-discriminatory award criteria; - The economically most advantageous offer wins; concession fees in line with market prices no economic advantage 29

30 Compatibility Art 93 TFEU directly applicable for establishing the compatibility of aid which meets the needs of coordination of transport public intervention to guide the development of the transport sector in the common interest developing connections between different transport networks 30

31 Compatibility criteria 1. Contribution to an objective of common interest White Paper on Transport Policy: achieving a ballanced combined transport system and modal shift from road freight to other modes of transport developing ports and intermodal terminals is a key element Shift towards more environmental-friendly modes of transport 31

32 2. Necessity and proportionality Necessity: the project will ensure an increased modal shift from road and rail to inland waterway. counterfactual situation: decrease in inland waterway transport the project is necessary for the modal shift 32

33 Proportionality: the total public financing may not exceed the funding gap ratio of the project. Funfing gap ratio = Financial net present value (discounted revenues discounted costs) / Dicounted costd of the project aid intensity: 96.13% (3.87% own resource of MNV) 33

34 3. Open and non-discriminatory access to the infrastructure Open and non discriminatory tendering procedure 4. No distortion of competition contrary to the common interest The port of Győr-Gönyű is a relatively small player and the investment does not change this situation. Negative impact on other ports in the catchment area is unlikely Port fees= average Hungarian Danube port fees + maximum 10% 34

35 Conclusion: No objection decision: The aid is compatible with Art 93 TFEU!!! 35

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37 Not all public measure is State Aid - cumulative conditions 1.Transfer of state resources 2.To an undertaking (economic activity) 3.Conferring an economic advantage 4.Selectively 5.By distorting competition 6.By effecting trade 37

38 Characteristics of the Hungarian public road infrastructure - Main part of the public road network is commercially exploited (two paralel system for toll roads) - Owner: the State - Implementer of the project: 100% state owned company acting on behalf of the State - Operator of the road system:100% state owned company - Toll Collection Body:100% state owned company - Constructor: selected through tendering procedure 38

39 Discussion with the Commission may the presence of state aid be excluded??? at the level of the Owner Implementer Operator Toll Collecting Body Constructor 39

40 Hungarian argumentation Owner no economic activity Draft Communication on the Notion of Aid: 37. Public funding of infrastructure that is not meant to be commercially exploited is in principle excluded from the application of the State aid rules. This concerns, for instance, general infrastructures, such as public roads, which are made available for public use without any consideration. Economic activity is the voluntary offer of goods and services under conditions, that at least cover the costs of the goods and services in question. the toll paid does not cover the costs of the construction no economic activity 40

41 Implementer of the project no distortion of competition Notion of aid: 196. a possible distortion of competition is excluded if (i) a given service is subject to a legal monopoly (established in compliance with EU law) and is not in competition with similar (liberalized) services and (ii) the service provider cannot be active (due to regulatory or statutory constraints) in any other liberalized (geographical or product) market. The owner is a 100% state owned company acting on behalf of the State the implementation is subject to legal monopoly No other company is entitled to enter the market The company cannot be active on other markets 41

42 Operator - no distortion of competition The operator is a 100% state owned company acting on behalf of the State Does not collect tolls Only the justified costs are covered the implementation is subject to legal monopoly No other company is entitled to enter the market The company cannot be active on other markets Toll Collecting Body - no distortion of competition The Toll Collecting Body is a 100% state owned company Transfers the toll revenues directly into the state budget Only the justified costs are covered the implementation is subject to legal monopoly No other company is entitled to enter the market The company cannot be active on other markets Constructor no advantage Selected via open, non-discriminatory tendering procedure 42

43 The Commission s point of view: We are still considering the exact conditions under which public contributions to public road development projects may not fall within the scope of Art 107 (1) TFEU. no definitive answers, but COM tends to share Hungary s approach regarding legal monopoly (also at the lever of the owner) 43

44 Thank you for your attention! 44 44

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