91997E4016

WRITTEN QUESTION P-4016/97 by Gerhard Hager (NI) to the Commission (11 December 1997)

Subject: Award of subsidies for natural gas pipe laying

As a means of ensuring natural gas supplies, a number of local authorities in Austria are awarding unconditional subsidies not subject to any repayment conditions to Energie-Versorgung Niederösterreich AG (EVN). The subsidies are payable partly by the kilometrage of pipeline laid, partly as a lump-sum (e.g. ATS 9 535 000 paid by Haag municipal authority for 16.9km of gas pipe laying), and, under the contracts currently concluded, are conditional neither on supplies at reduced prices to the local authority itself or to householders. It is also left to EVN's discretion to determine whether, and in what local-authority districts, it will provide a natural gas supply facility in future.

The local authorities also undertake, again for no financial return, to issue authorizations for laying pipelines and constructing related facilities on all sites for which they are now or subsequently will be responsible, and to make the sites required for the necessary engineering works available at Charge. Lastly, the local authorities undertake for the duration of the agreement neither to produce or distribute gas themselves, nor to authorize others to construct a gas-pipeline network or other facilities necessary for gas production or distribution on sites located on their property.

1. What is the Commission's view of the legal status of agreements concluded on the above terms?

2. Does the Commission intend to take any action against the award of the above subsidies - in particular vis-à-vis other energy sources - on the basis of competition law?

Answer given by Mr Van Miert on behalf of the Commission (13 January 1998)

On the basis of the available information, the Commission is not yet in a position to decide whether subsidies from some Austrian municipalities to the energy company Energie-Versorgung Niederösterreich (EVN) are compatible with the competition rules laid down in Article 92 and 93 of the EC Treaty.

The Commission will immediately ask the Austrian authorities for a detailed information and investigate the agreements entered into.

If the Commission has doubts on the compatibility of the agreements with the Community law, it will immediately initiate the procedure provided for in Article 93(2) of the EC Treaty.