Judgments nº T-778/17 of Tribunal General de la Unión Europea, October 24, 2019

• Resolution Date: October 24, 2019
• Issuing Organization: Tribunal General de la Unión Europea
• Decision Number: T-778/17

(State aid - Toll-motorway concession - Law providing for an exemption from tolls for certain vehicles - Compensation granted to the concession holder by the Member State for loss of revenue - Shadow toll - Decision declaring aid incompatible with the internal market and ordering its recovery - Procedural rights of the interested parties - Commission’s obligation to exercise particular vigilance - Concept of State aid - Advantage - Improvement of the concessionaire’s expected financial situation - Criterion of the private operator in a market economy - Article 107(3)(a) TFEU - Regional State aid)

In Case T-778/17,

Autostrada Wielkopolska S.A., established in Poznań (Poland), represented by O. Geiss, D. Tayar and T. Siakka, lawyers,

applicant,

v

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

defendant,

supported by

Republic of Poland, represented by B. Majczyna and M. Rzotkiewicz, acting as Agents,

intervener,

ACTION under Article 263 TFEU seeking annulment of Commission Decision (EU) 2018/556 of 25 August 2017 on the State aid SA.35356 (2013/C) (ex 2013/NN, ex 2012/N) implemented by Poland for Autostrada Wielkopolska S.A. (OJ 2018 L 92, p. 19),

THE GENERAL COURT (Ninth Chamber),

composed of S. Gervasoni (Rapporteur), President, L. Madise and R. da Silva Passos, Judges,

Registrar: E. Artemiou, Administrator,

having regard to the written part of the procedure and further to the hearing on 6 June 2019,

gives the following

Judgment

Background to the dispute

Background

1 On 10 March 1997, following a public tender, the Republic of Poland granted to the applicant, Autostrada Wielkopolska S.A., a concession for the construction and operation of the section of the A2 motorway between Nowy Tomyśl (Poland) and Konin (Poland) (‘the relevant section of the A2 motorway’) for a period of 40 years.

2 Under the Concession Agreement signed on 12 September 1997, the applicant committed to obtain, at its own cost and risk, external funding for the construction and operation of the relevant section of the A2 motorway and, in exchange, had the right to collect tolls from the users of the motorway. That agreement also allowed it to increase the toll rates to maximise revenue, provided that they did not exceed the maximum rates defined by vehicle category.

3 Upon joining the European Union in 2004, the Republic of Poland was obliged to transpose into Polish law Directive 1999/62/EC of the European Parliament and of the Council of 17 June 1999 on the charging of heavy goods vehicles for the use of certain infrastructures (OJ 1999 L 187, p. 42). Article 7(3) of that directive provides that tolls and user charges may not both be imposed at the same time for the use of a single road section.

4 The Polish Parliament therefore adopted the ustawa o zmianie ustawy o autostradach płatnych oraz o Krajowym Funduszu Drogowym oraz ustawy o transporcie drogowym (Law amending the Law on toll motorways and the National Road Fund and the Law on road transport) of 28 July 2005 (Dz. U. no 155, position 1297) (‘the Law of 28 July 2005’). That law eliminated the double charging of heavy goods vehicles (‘HGVs’) for the use of a single road section. Accordingly, HGVs holding a vignette (toll card) for using national roads in Poland were exempted, as from 1 September 2005, from tolls on motorways covered by concession agreements.

5 Under the Law of 28 July 2005, the concession holders had to be compensated by the National Road Fund for the loss of revenue caused by the exemption from tolls. That law provided that the concession holders were entitled to a reimbursement equivalent to 70% of the amount obtained by multiplying the actual number of journeys by HGVs bearing a vignette by the shadow-toll rate negotiated with the concession holders for each category of HGV. The reduction to 70% set by that law was intended to offset the expected increase in HGV traffic on the motorways which were the subject of a concession, following the exemption of HGVs from tolls. The law in question also provided that the shadow-toll rates could not exceed the real rates applied to the corresponding vehicle category. Finally, it specified that the method of compensation was to be determined in each concession agreement.

6 With regard to the applicant, following negotiations with the Polish authorities, the method of compensation and the shadow-toll rates were set out in Annex 6 to the Concession Agreement (‘Annex 6’), concluded on 14 October 2005.

7 The Republic of Poland explained that the method of compensation laid down by Annex 6 was based on the principle that the expected financial situation of the concession holder should not change following the Law of 28 July 2005. It added that, in order to meet that objective, the expected internal rate of return (‘the IRR’) on the applicant’s investment in the relevant section of the A2 motorway must stay at the same level as it would have been at if there had been no legislative change, that is without the loss of revenue resulting from the Law of 28 July 2005.

8 The parties to Annex 6 (‘the contracting parties’) agreed that the compensation would be calculated in accordance with a two-step procedure, conducted on the basis of financial models showing the actual up-to-date and expected cash flows and allowing the IRR to be calculated. During the first step, the shadow-toll rates which the Republic of Poland was required to pay to the applicant were to be determined. During the second step, those rates were to be verified by 30 November 2007 and, if necessary, changed.

9 Thus, during the first step, the shadow-toll rates were set on the basis of the following three financial models, presented by the applicant:

- the base model showed the financial situation of the applicant on financial closure in 2000 and assumed that real-toll collection would take place from the beginning until the end of the concession. The IRR was 10.62%;

- the real-toll model described the financial situation of the applicant that would have prevailed as of December 2004 if HGVs were not exempted from tolls. The IRR was 10.77%;

- the vignette model described the financial situation of the applicant that would have prevailed as of June 2005 if HGVs were exempted from tolls. In that model, the revenue consisted of shadow-toll compensation for HGVs, and real-toll collection for other vehicles. The shadow-toll rates were set at the maximum levels allowed by the Concession Agreement. The IRR was 8.20%.

10 On the basis of those financial models, the applicant demonstrated that, even applying the maximum shadow-toll rates, the real-toll model’s IRR, of 10.77%, would not be reached. For that reason, it set the shadow-toll rates at the maximum levels allowed by the Concession Agreement.

11 With effect from 1 September 2005, HGVs bearing a vignette were exempted from tolls, and the applicant received monthly compensation calculated on the basis of the number of relevant HGVs using the motorway and the agreed shadow-toll rates.

12 Thereafter, during the second step, the contracting parties were required to check how HGV traffic changed as a result of the exemption from tolls, and to adjust the shadow-toll rates accordingly in order to avoid the overpayment or underpayment of compensation. The applicant was required to submit an up-to-date financial model (‘the verification model’) showing the impact of those rates on the basic financial indicators of the Concession Agreement, including the IRR. If the verification model’s IRR exceeded the real-toll model’s IRR, the shadow-toll rates were required to be lowered in order to eliminate the excess rate of return. On the other hand, if the verification model’s IRR was lower than the real-toll model’s IRR, the rates at issue were required to be increased.

13 The applicant provided the verification model in 2007. In that model, the IRR in June 2006 was 9.20%. The verification report attached to that model and presented by the applicant suggested that the shadow-toll rates should be increased.

14 By letter of 28 November 2007, the Generalna Dyrekcja dróg krajowych i autostrad (Poland’s General Directorate for National Roads and Motorways) informed the applicant that in view of doubts regarding the correctness of assumptions made for the purposes of Annex 6, it did not accept the proposed adjusted shadow-toll rates. Notwithstanding that letter, the applicant continued to receive monthly shadow-toll payments, in accordance with the provisions of that annex. Then, on 13 November 2008, the Polish Minister for Infrastructure made a statement of withdrawal from that annex claiming, inter alia, to have concluded it in error.

15 According to the Republic of Poland, the applicant overvalued the real-toll model’s IRR by using outdated traffic and revenue forecasts. The applicant used a traffic and revenue study carried out by the consulting firm Wilbur Smith Associates (WSA) in 1999 (‘the 1999 WSA study’), whereas an updated study, from June 2004 (‘the 2004 WSA study’), was available. According to the report of 24 September 2010 commissioned by the Polish Ministry of Infrastructure and prepared by PricewaterhouseCoopers (‘the PwC report’), the use of the traffic and revenue assumptions appearing in the 2004 WSA study instead of those appearing in the 1999 WSA study reduced the IRR in the real-toll model from 10.77% to 7.42%.

16 Thus, in the opinion of the Polish Minister for Infrastructure, the applicant received excessive shadow-toll compensation. Since the applicant refused to repay the overcompensation claimed by the Republic of Poland, that Minister requested that legal proceedings be commenced to recover that overcompensation.

17 At the same time, the applicant contested the repudiation of Annex 6 by bringing the case before an arbitral tribunal. By an award of 20 March 2013, the arbitral tribunal decided in favour of the applicant, finding that that annex was valid...