The European Commission has opened an in-depth investigation into restructuring aid for Polish Regional Railways (Przewozy Regionalne). The EC has concerns that the company may already have received state aid in the past.
In September 2015, Poland notified to the EC restructuring aid granted to Polish Regional Railways worth PLN 770 million (around €181 million). Under EU state aid rules companies in financial difficulty can receive restructuring aid only once over a period of 10 years. This is to avoid that struggling firms rely on public funding to stay in business, instead of improving their business performance and competing on their merits.
“Polish Regional Railways has already benefitted from state support in the past. We need to assess whether the aid received is compatible with EU state aid rules and make sure that public support does not lead to distortions of competition in this market,” Commissioner Margrethe Vestager, in charge of competition policy, said.
During its preliminary assessment, the Commission found that Polish Regional Railways had already received state support in the past. The Commission’s in-depth investigation will examine:
– whether this past state support should be considered as restructuring aid, and consequently whether the aid granted in 2015 complies with the “one time, last time” principle;
– whether, as required by EU state aid rules, Poland has offered adequate measures to alleviate distortions of competition caused by the restructuring aid, and
– whether Polish Regional Railways sufficiently contributes to the costs of restructuring from its own resources.
The Commission acknowledges that the Polish domestic rail passenger sector is different from other economic sectors in certain respects, in particular because it provides an important public service on a market that is not yet fully open to competition at EU level. The Commission will consider how to take account of those differences in the assessment of restructuring aid to Polish Regional Railways.
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