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European Commission

Press release

Brussels, 18 December 2013

State aid: Commission approves €93 million public funding for Polish rail company PKP IC for purchase of long-distance passenger trains

The European Commission has found that public funding of €93 million for the purchase of long-distance passenger rolling stock by the Polish passenger rail operator PKP Intercity (PKP IC) is in line with EU state aid rules. The project is aimed at increasing passenger transport by rail. It should also contribute to improving the country's territorial cohesion and the accessibility of individual regions. The Commission has found that this project will further EU cohesion and transport objectives without unduly distorting competition. This decision is on the compatibility of the project with EU state aid rules. It is without prejudice to the on-going assessment by the Commission under EU structural funds rules.

Joaquín Almunia, Commission Vice-President in charge of competition policy, said: "The use of high-performance trains will improve the offer of alternative means of passenger transport in Poland. This should result in a more balanced transport system, decrease the negative effects of transport on the environment and limit traffic congestion".

The Polish authorities plan to co-finance the purchase of 20 high-speed trains under an EU Cohesion Fund programme – namely the Operational Programme for Infrastructure and Environment – in the form of a direct grant of €93 million, covering around 22% of the eligible investment costs.

As the cohesion funds, once approved by the Commission, will be under the management of the Polish authorities, the Commission also needed to verify that any support granted through these funds was in line with the state aid rules.

The Commission found that the aid was granted in line with the provisions of the EU Railway Guidelines that allow regional state aid for the purchase of passenger rolling stock. Regional state aid is aimed at countervailing companies' handicap in investing in underdeveloped regions and furthering cohesion in the EU. The Commission found that the aid intensity was below the ceiling for large investment projects set by the EU regional aid guidelines. The positive impact of the project on regional development therefore outweighs the potential distortion of competition brought about by the aid.

The Commission also found that a State guarantee covering the loans taken by PKP IC to finance its contribution to the project was granted on market terms and therefore did not involve any state aid in the meaning of the EU rules.

Background

In 2011, PKP Intercity ordered 20 modern trains (Electric Multiple Units) capable to achieve a maximum speed of 220-250 km together with a dedicated maintenance workshop. The total investment costs amount to € 430 million.

The purchased rolling stock will be used, for at least 10 years, on pre-defined routes linking Warsaw, the Polish capital, with Gdansk, Katowice, Krakow and Wroclaw (rail corridor E65). The corridor E65 is currently modernised with EU Funds, partly for a speed above 200/220 km. The rolling stock will be used to provide commercial services, i.e. it will be operated without a Public Service Obligation (PSO) contract. The trains are currently under production. The start of their commercial services is scheduled for autumn 2014.

The non-confidential version of the decision will be made available under the case number SA.36486 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.

Contacts :

Antoine Colombani (+32 2 297 45 13, Twitter: @ECspokesAntoine )

Marisa Gonzalez Iglesias (+32 2 295 19 25)


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