Maritime Transport: the Commission Authorises Aid to the SNCM in Compensation for The

IP/01/1524

Brussels, 30 October 2001

Maritime transport: the Commission authorises aid to the SNCM in compensation for the public service provided between Corsica and mainland France

The European Commission today authorised subsidies that had been granted to the "Société Nationale Maritime Corse-Méditerranée" since 1990 in compensation for the cost of the public maritime transport service provided between Corsica and mainland France. As the public service agreement between France and the SNCM expires on 31 December 2001, the French authorities must notify the Commission of any new aid measures planned after that date.

Scheduled maritime transport services between mainland France ports and Corsica have constituted a public service since 1948. The "Société Nationale Maritime Corse-Méditerranée" (SNCM) provides the service under an agreement concluded for a period of 25 years.[1] The Commission today concluded that the subsidies granted since 1990 to "Société Nationale Maritime Corse-Méditerranée" (SNCM) under this agreement have not exceeded the cost of the public service provided by the company. It has therefore decided to authorise this aid.

After receiving complaints from private operators, the Commission's examination confirmed that the services operated by SNCM are indeed services of general economic interest. Down the years market forces have not satisfied the regularity and frequency of service demanded by the public authorities.

Furthermore, the subsidies granted to SNCM amount to the additional costs needed to meet the requirements of the public service contract.[2] An analysis of the accounts showed that for the period from 1990 to 1999 the revenue (including subsidies) of SNCM within the framework of the public service did not exceed the costs found. The amount is approximately FRF 500 million per year.

Finally, as regards the activity of SNCM on Corsica-Italy routes, the Commission found no irregular practices. The volumes transported by SNCM's subsidiary, "Corsica Marittima", over the period 1990-99 were insignificant. Turnover for that period amounted to FRF 7.75 million while its market share did not exceed 6.5%.

The public service agreement between SNCM and France expires on 31 December 2001. The French authorities must inform the Commission of any measures it plans to take to adapt the structure of SNCM to the new system of public service delegation for maritime services to Corsica.

1

[1]Agreement concluded in 1976. The body granting the public service concession has been the Corsica local authority since 1991.

[2]The Commission has not come to any conclusion on the excessive nature or otherwise of the public service obligations. As the Court of First Instance of the European Communities found on 27 February 1997 in case T-106/95 ("La Poste"), "In the absence of Community rules governing the matter, the Commission is not entitled to rule on the basis of public service tasks assigned to the public operator, such as the level of costs linked to that service, or the expediency of the political choices made in this regard by the national authorities"..