EU to investigate public aid for regional railway operator

The European Commission launched an investigation restructuring aid for the state-run regional railway operator Przewozy Regionalne. The Commission has concerns that the company may already have received State aid in the past. EU rules only allow a company to receive restructuring aid once over a 10-year period. “Przewozy Regionalne has already benefited from state aid in the past and we need to assess whether the aid granted complies with the EU state aid rules and ensure that public support does not lead to distortions of competition in the rail market", said the European Commissioner responsible for competition policy Margrethe Vestager. The EC reported that in September 2015 Przewozy Regionalne received restructuring aid worth PLN 770 million. In accordance with EU rules, enterprises in a difficult financial situation can receive restructuring aid only once every 10 years (the so-called first and last time rule). The point is to avoid a situation where declining companies, instead of improving their performance and competing in the market thanks to their assets, would use public support to stay on the market. After the preliminary assessment, the Commission concluded that Przewozy Regionalne had already received state aid. The subject of the detailed investigation will be whether the state aid granted in the past should be considered as restructuring aid, and thus whether the aid granted in 2015 complies with the “one time, last time” principle The EC will also check whether in accordance with EU state aid rules Poland has proposed appropriate measures to limit distortions of competition caused by restructuring aid and whether Przewozy Regionalne sufficiently covers part of the restructuring costs from its own resources. The Commission underlined that it understands that the Polish passenger rail sector is different in some respects from other sectors of the economy - primarily because it offers public services of major importance on a market that is not yet fully open to competition on an EU scale. Therefore, the EC “will consider how to take into account these differences when assessing restructuring aid for Przewozy Regionalne.”