Judgments nº T-631/15 of Tribunal General de la Unión Europea, December 13, 2018

Resolution DateDecember 13, 2018
Issuing OrganizationTribunal General de la Unión Europea
Decision NumberT-631/15

(State aid - Public financing of the Fehmarn Belt fixed link project - Individual aid - Decision not to raise any objections - Decision finding no State aid and declaring the aid compatible with the internal market - Definition of State aid - Adverse effect on competition and effect on trade between Member States - Conditions governing compatibility - Aid to promote the execution of an important project of common European interest - Necessity of the aid - Incentive effect - Proportionality of the aid - Serious difficulties justifying the initiation of the formal investigation procedure - Obligation to state reasons - Communication on State aid to promote the execution of important projects of common European interest)

In Case T-631/15,

Stena Line Scandinavia AB, established in Gothenburg (Sweden), represented by P. Alexiadis, Solicitor, and L. Sandberg-Mørch, lawyer,

applicant,

supported by

Föreningen Svensk Sjöfart, established in Gothenburg, represented by L. Sandberg-Mørch and J. Buendía Sierra, lawyers,

intervener,

v

European Commission, represented by L. Armati, L. Flynn and S. Noë, acting as Agents,

defendant,

supported by

Kingdom of Denmark, represented initially by C. Thorning, and subsequently by J. Nymann-Lindegren, acting as Agents, and by R. Holdgaard, lawyer,

intervener,

APPLICATION pursuant to Article 263 TFEU for annulment of Commission Decision C(2015) 5023 final of 23 July 2015 on State aid SA.39078 (2014/N) (Denmark) for the financing of the Fehmarn Belt fixed link project (OJ 2015 C 325, p. 5),

THE GENERAL COURT (Sixth Chamber),

composed of G. Berardis, President, D. Spielmann and Z. Csehi (Rapporteur), Judges,

Registrar: P. Cullen, Administrator,

having regard to the written part of the procedure and further to the hearing on 26 April 2018,

gives the following

Judgment

Background to the dispute

The applicant

1 The applicant, Stena Line Scandinavia AB, is part of a ferry operator group founded in 1962 engaged in the transport of passengers, cars, trains and freight. It operates a number of ferry routes between Denmark, Germany, Latvia, Poland, Sweden and Norway.

The project

2 The Fehmarn Belt fixed link project between Denmark and Germany (‘the project’) was approved by the treaty between the Kingdom of Denmark and the Federal Republic of Germany concerning the Fehmarn Belt fixed link signed on 3 September 2008 and ratified in 2009 (‘the international agreement’).

3 The project consists of, on the one hand, infrastructure (‘the fixed link’), and, on the other, road hinterland connections in Denmark (‘the road connections’) and rail hinterland connections in Denmark (‘the rail connections’) (together, ‘the hinterland connections’). The Federal Republic of Germany is responsible for the financing of and modifications to the German hinterland connections, which are not at issue in the present proceedings.

4 The fixed link takes the form of an immersed tunnel between Rødby on the island of Lolland in Denmark and Puttgarden in Germany; it will be approximately 19 kilometres long and consist of an electrified railway line and a motorway. The rail connections will include the expansion and upgrade of the existing rail link between Ringsted (Denmark) and Rødby, covering approximately 120 kilometres, which is owned by Banedanmark, the Danish State public rail infrastructure manager.

5 The project was preceded by a planning phase. The Commission was given notification of the financing of that phase, as regards the fixed link and the hinterland connections, for reasons of legal certainty. By its decision of 13 July 2009 in Case N 157/2009 - Financing of the planning phase of the Fehmarn Belt fixed link (OJ 2009 C 202, p. 2, ‘the project planning decision’), the Commission concluded, first, that the measures relating to the financing of the planning of the project may not constitute State aid and, second, that those measures were in any event compatible with the internal market. It therefore decided not to raise any objections within the meaning of Article 4(2) and (3) of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article [88 EC] (OJ 1999 L 83, p. 1).

6 The estimated cost of the entire project, in fixed 2014 prices, is 64.4 billion Danish krone (DKK) (approximately EUR 8.7 billion): DKK 54.9 billion (approximately EUR 7.4 billion) for the planning and construction of the fixed link, and DKK 9.5 billion (approximately EUR 1.3 billion) for the planning and construction of the upgrading of the hinterland connections.

7 According to Article 1 of the international agreement, the Kingdom of Denmark will be the sole owner of the fixed link and will have sole responsibility and bear the full risk of financing the fixed link, as well as the upgrading of the Danish hinterland connections.

8 Pursuant to Article 6 of the international agreement and the Lov no 575 om anlæg og drift af en fast forbindelse over Femern Bælt med tilhørende landanlæg i Danmark (Law No 575 on the construction and operation of the Fehmarn Belt fixed link project and Danish hinterland connections) of 4 May 2015 (‘the Construction Law’), two public undertakings were entrusted with the execution of the project. The first, Femern A/S, established in 2005, is responsible for financing, construction and operation of the fixed link. The second, A/S Femern Landanlæg, established in 2009, is responsible for the construction, operation and financing of the Danish hinterland connections. Femern Landanlæg is a subsidiary of Sund & Bælt Holding A/S, which is owned by the Danish State. Femern became a subsidiary of Femern Landanlæg following the latter’s establishment.

9 The works relating to the construction of the fixed link will be carried out by Femern under construction contracts subject to public procurement procedures.Once the fixed link is operational, Femern will collect fees paid by users for using the link. Construction of the works necessary for upgrading the road connections will be undertaken by the Danish Highways Directorate on behalf of the Danish State. The latter will retain ownership of the hinterland road infrastructure, which will be made available free of charge to all users. Femern Landanlægwill be responsible for the construction and management, including maintenance, of the rail connections. Ownership of the rail connections is to be shared between Banedanmark (20%) and Femern Landanlæg(80%). Banedanmark will be responsible for all the costs relating to the operation of the rail connections, while the costs relating to the maintenance of the rail connection will be borne by Femern Landanlægand Banedanmark on a pro rata basis according to their respective shares.

10 Femern and Femern Landanlæghave obtained loans to finance the project (see paragraph 12 below). Those undertakings will be unable to obtain loans for activities other than the financing, planning, construction and operation of the fixed link and hinterland connections. In addition, Femern will receive the charges paid by users of the fixed link in order to discharge its debt and will pay dividends to Femern Landanlæg, which the latter will use to discharge its own debt. Femern Landanlæg will also receive 80% of the fees paid by the railway operators for use of the rail connections, charged by Banedanmark, as ownership of those connections will be shared by it and Banedanmark.

The contested measures

11 The contested measures, notification of which was given by the Danish authorities, include (i) a capital injection for the benefit of Femern and (ii) a State guarantee and State loans for the benefit of Femern and Femern Landanlæg (‘the measures at issue’).

12 More specifically, the planning, construction and operation of the fixed link and the hinterland connections are financed by loans, raised on the international financial markets and covered by the State guarantee, or, as an alternative method of financing, by government-backed State loans from Danmarks nationalbank (National Bank of Denmark).

Administrative procedure

13 During 2014 and 2015, the Commission received five complaints, the first lodged on 5 June 2014, claiming that the Kingdom of Denmark had granted unlawful State aid that was incompatible with the internal market to Femern and Femern Landanlæg.

14 During that same period, the Commission’s departments sent several requests for information to the Danish authorities, which replied and provided further information on a number of occasions.

15 By letter of 22 December 2014, the Danish authorities gave the Commission notification, pursuant to Article 108(3) TFEU, of the measures at issue.

The contested decision

16 On 23 July 2015, the Commission adopted Decision C(2015) 5023 final on State aid SA.39078 (2014/N) (Denmark) for the financing of the Fehmarn Belt fixed link project (OJ 2015 C 325, p. 5, ‘the contested decision’).

17 The operative part of that decision is divided into two parts.

18 In the first part, the Commission concluded that the measures granted to Femern Landanlæg for the planning, construction and operation of the hinterland connections do not constitute State aid within the meaning of Article 107(1) TFEU.

19 In particular, the Commission concluded, in the first place, that the upgrading of the road links did not constitute an economic activity and, in the second place, (i) that the national rail network was operated and managed on a market that is not open to competition and (ii) that the financial support granted to Femern Landanlæg is not liable to affect trade between Member States, as its activities were carried out on a national, separate and geographically closed market.

20 In the second part, the Commission concluded that, even if the measures granted to Femern for the planning, construction and operation of the fixed link did constitute State aid within the meaning of Article 107(1) TFEU, they are compatible with the internal market...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT