State aid regarding construction of infrastructure available to public

The decision of the Court of First Instance (the “CFI”) provides additional guidance on state aid rules applicable to compensation of private operators for services of general economic interest.

The case involved a Dutch company, the claimant in the current proceedings, which purchased land from local authorities for commercial purposes. Later on, the company entered into an informal agreement with the authorities under which the former would build on the premises publicly available parking facilities.

At a further stage, the European Commission found that the purchase price of the land at issue was lower than its market price and thus the transaction might have involved some state aid. The Commission acknowledged that other operators were also able to use the parking facilities arranged at the premises free of charge, including related services such as protection against thefts, warehousing or unloading. However, the claimant still had the primary right to use the estate, hence receiving support from public funds.

Based on these facts, the Commission decided that, whereas half of the financial support received by the claimant by virtue of the reduced purchase price was effectively forwarded to other users of the parking facilities, the remaining proportion benefited only the claimant and hence qualified as operating state aid. Having found no specific circumstances to justify the award of the state aid, the Commission declared it unlawful and requested its recovery by the Dutch authorities.

The CFI rejected the assessment of the Commission as arbitrary and based on insufficient analysis of the facts of the case. The CFI indicated that operators other than the claimant were able to continuously use the latter’s premises for no consideration whatsoever. According to the CFI, the claimant was, therefore, providing services in the general economic interest. In accordance with the well-established case law of the European Community courts, claimant was consequently entitled to appropriate compensation.

The Commission was under the duty to assess to what extent the support received by the claimant might have reflected such due compensation. Therefore, the findings of the Commission that precisely half of the support constituted unlawful state aid was, given lack of sufficient evidence, arbitrary and unfounded.

As the result, the CFI annulled the Commission’s Decision on the State aid implemented by the Netherlands in favour of Valmont Nederland BV.