RAIL TRANSPORT : NEW GUIDELINES ON STATE AID IN 2008.

Within several years, unlimited state guarantees which railway companies benefit from in several EU member states will be only a memory. The European Commission plans to impose their removal, with 1 January 2010 as the deadline. This is what it explains in its draft guidelines on state aid for railway companies, which it published on 20 December.

The draft also defines conditions in which state cancellation of debt is authorised. The Commission stresses that the level of indebtedness of many railway companies "continues to give cause for concern". It sets, for example, a deadline which is applied to debts which, under conditions, can be swallowed up by the state: debts incurred prior to 15 March 2001, the date on which Directive 2001/12 entered into force, which marks the first stage in liberalising EU rail transport. For member states, which joined the EU after 15 March 2001, the deadline is the joining date. The Commission's intentions concerning the state taking on debt are more severe than those which were in the document at the inter-services consultation stage (see Europolitics 3357).

An interesting development for the acquisition grants and the renewal of locomotives and carriages used for passenger transport (not freight): the Commission could authorise such aid by bending the rules currently defined in the guidelines on state aid for regional benefit, which bans investment grants for "acquisitions expenditure for transport equipment". But not without conditions: in particular, it will be necessary for carriages and locomotives used for urban or regional transport and that they remain in such use for at least five years. Guidelines should also allow state restructuring aid aimed at the freight section of a railway company. While usually a section of a company cannot benefit...