92000E0877

WRITTEN QUESTION P-0877/00

by Karin Riis-Jørgensen (ELDR) to the Commission

(16 March 2000)

Subject: Unlawful State subsidy to the DSB

Passenger transport between Copenhagen and Æro is provided by two carriers, one a privately owned bus company and the other a rail link operated by the DSB (Danish Railways).

Since 1 January 1999 the Danish State has purchased public transport services from the DSB under a contract according to which the State pays a gross subsidy of DKR 2,9 billion. When the Inland Revenue Department decided in 1999 that VAT should be charged on the Great Belt Bridge tolls, the subsidy paid to the DSB was increased on the grounds that:

as the DSB had to pay VAT on permanent railway charges in 1999, the DSB net subsidy would be increased by DKR 192,5 million.

In other words, the DSB is paying VAT on the bridge tolls, but having it refunded via the State contract. The private bus company does not receive any kind of public subsidy and pays VAT which is not refunded.

Does the Commission consider this form of VAT refund to the DSB as compatible with the Community's rules on competition and State subsidies?

Answer given by Mrs de Palacio on behalf of the Commission

(25 April 2000)

The Commission would inform the Honourable Member that it has already received information concerning the issue she raises and is currently examining the arrangement in question. The Commission has therefore asked the Danish authorities to provide the Commission with all relevant information, in order to allow it to make an assessment of the arrangement under applicable state aid rules.