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Brussels, 2 nd December 2009

State aid: Commission opens in-depth investigation concerning Spanish modular housing company Habidite Alonsotegi

The European Commission has initiated a formal investigation procedure under EU state aid rules into two agreements between BIZKAILUR, a public entity owned by the provincial authorities of Bizkaia, and a group of private investors. These agreements concern the establishment of Habidite, a construction module factory, in Alonsotegi, Bizkaia. The Commission considers at this stage that the commitment by BIZKAILUR to purchase 1 500 houses from the new Habidite Alonsotegi factory may involve state aid. The Commission also has doubts regarding the conditions at which Bizkailur will provide land for industrial use to the Habidite Alonsotegi factory, which could constitute state aid. The Commission will now investigate whether these measures are compatible with EU state aid rules. The opening of an in-depth investigation gives interested third parties the possibility to submit comments on the proposed measures. It does not prejudge the outcome of the procedure.

Competition Commissioner Neelie Kroes said: "The Commission must establish in the course of an in-depth investigation whether the agreements entered into by BIZKAILUR in relation to the Habidite project contain elements of state aid, and if so, whether the aid could be compatible with the Single Market."

In December 2006, BIZKAILUR, a public entity owned by the authorities of Bizkaia, signed two agreements with several private Spanish construction companies for the setup of a new module construction factory in Alonsotegi, Bizkaia (Spain). The new factory shall produce modules that can be assembled directly into houses.

In the two agreements, BIZKAILUR undertakes to:

  • purchase and adapt for industrial use the land necessary for the setup of the new Habidite factory in Alonsotegi and

  • buy from the new Habidite factory a total of 1 500 houses (constructed with Habidite modules) over a three-year period.

These agreements have not been yet implemented.

The Commission considers at this stage that the two agreements may involve state aid. First, the conditions under which the private investors reimburse BIZKAILUR for the costs incurred for the purchase and adaptation of the land are similar to those of an interest-free loan to the private investors. Second, through its commitment to buy from the new Habidite factory in Alonsotegi a total of 1 500 houses, BIZKAILUR guarantees the purchase of a considerable part of the output of the new Habidite factory in Alonsotegi during its initial years of production.

In the course of its investigation, the Commission shall examine if BIZKAILUR's commitments provide an economic advantage to the new Habidite factory in Alonsotegi and the private investors. The Commission shall also examine the economic situation and the relationship between the various private companies involved in the project, to determine if the Habidite project qualifies for receiving aid under the General Block Exemption Regulation ( IP / 08/1110 ) or the Temporary Framework ( IP/08/1993 ).

The non-confidential version of the decision will be made available under the case number N 226/2009 in the State Aid Register on the DG Competition website. New publications of state aid decisions on the internet and in the Official Journal are listed in the state Aid Weekly e-News .

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