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Brussels, 24 February 2010

State aid: Commission closes inquiry into Danske Statsbaner following revision of state compensation system

The European Commission today adopted a final decision completing its inquiry into the public-service contracts concluded with the Danish railway company "Danske Statsbaner". The closure of the inquiry follows the Danish authorities' decision to accept a new mechanism for funding the railway operator. The Commission also highlights the need to encourage operators to manage networks efficiently and provide travellers with quality services. The Commission's decision is the first to apply the new regulation on public passenger transport services.

Danske Statsbaner (DSB) is the incumbent rail operator in the Danish passenger transport sector. The company operates a major part of the Danish rail network on the basis of public-service contracts. The contracts concerned relate to mainline, regional and suburban passenger transport services over the periods 2000-2004 and 2005-2014. They were concluded with the Danish Ministry of Transport without prior public tendering.

The public-service contracts require DSB to meet various obligations in terms of destinations served, the frequency of services and the quality of the rail services provided to passengers. In return, the Danish Government pays compensation every year to DSB for the costs incurred in meeting these obligations. The Commission opened the formal investigation procedure on 10 September 2008 after receiving two complaints.

To guarantee healthy competition on the passenger rail transport market, the Commission has a duty to ensure that public-service contracts do not result in the rail company being overcompensated or granted incompatible state aid.

The Commission has checked that the compensation paid by the government was limited to what was strictly necessary to cover these costs, basing its assessment on Regulation No 1370/2007 on public passenger transport services by rail and by road, which entered into force on 3 December 2009 1 and broadly follows the Commission's previous practice in the field.

Its investigation looked into three main aspects of DSB's alleged overcompensation: DSB's surplus profits, the acquisition of rolling stock and delays in its delivery, and various issues relating to the operation of the route between Copenhagen and Ystad in southern Sweden.

The Commission found that the Danish Government had in fact fully rectified DSB's surplus situation by deducting dividends and that, as a result, the company had not actually been overcompensated. However, the Commission has asked the Danish authorities to revise the compensation system and to introduce a recovery mechanism to guard against overcompensation in future. The mechanism is based on the introduction of a maximum level of profit considered reasonable by the Commission and on a method for adjusting the profit level according to the operator's performance in terms of management and quality of service.

The Commission has also asked Denmark to ensure that any compensation due to DSB for delays in the delivery of rolling stock should be repaid in full to the Danish authorities since this was already covered by the aid received.

The non-confidential version of the decision will be made available under case number C 41/2008 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. The electronic newsletter State aid Weekly e-News lists the most recent decisions on state aid published in the Official Journal and on the website.

1 :

OJ L 315, 3.12.2007, p. 1.

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