# CE2004088EN.01054701.xml

| 8.4.2004 | EN | Official Journal of the European Union | CE 88/547 |
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8.4.2004

EN

Official Journal of the European Union

CE 88/547

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(2004/C 88 E/0557)

WRITTEN QUESTION E-0878/04

by Antonio Di Pietro (ELDR) to the Commission

(22 March 2004)

Subject:   The Acque Albule water company of Tivoli (Italy)

Subject:

The Acque Albule water company administers thermal springs which have been known and highly regarded since antiquity. The Tivoli municipal authority — which has been the company's sole shareholder since December 2001 — has recently disposed of 40 % of the company's capital to a private group on the alleged grounds that it intends to recapitalise the company. That operation has been declared irregular and void by a court in Rome. Furthermore, the Italian national auditing body has identified serious irregularities in the company's accounts. Acque Albule's shares seem to have been greatly undervalued and the operation was carried out with a total lack of transparency — the valuation document was not even made public. Despite the contractual undertakings given by the new private company and despite the injection of considerable public funding, virtually all of the company's staff have been made redundant. It has recently been reported in the press that Acque Albule has considered issuing debenture bonds, to add to the benefit it derives from the public aid to which it is not entitled.

What action does the Commission intend to take in response to the fact that a sizeable amount of public property has been disposed of in a most untransparent fashion, to the fact that there has recently been a public issue of debenture bonds for which appropriate guarantees have not, apparently, been provided, and to the fact that the large amounts of public aid which were granted to the company for the purpose of compensating the workforce for any losses suffered have obviously not — in view of the fact that staff have been made redundant — been used in order to preserve jobs?

Answer given by Mr Monti on behalf of the Commission

(29 April 2004)

(29 April 2004)

The issue of whether the sale of public property below its value may contain an element of State aid in favour of the buyers is dealt with — as regards sales of land and buildings — in the Commission Communication on State aid elements in sales of land and buildings by public authorities, published in the Official Journal of the European Union (1).

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In the Communication it is stated that:

| | A sale of land and buildings following a sufficiently well-publicised, open and unconditional bidding procedure, comparable to an auction, accepting the best or only bid is by definition at market value and consequently does not contain State aid. |
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A sale of land and buildings following a sufficiently well-publicised, open and unconditional bidding procedure, comparable to an auction, accepting the best or only bid is by definition at market value and consequently does not contain State aid.

and

| | If public authorities intend not to use the procedure described ... [above], an independent evaluation should be carried out by one or more independent asset valuers prior to the sale negotiations in order to establish the market value on the basis of generally accepted market indicators and valuation standards. The market price thus established is the minimum purchase price that can be agreed without granting State aid. |
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If public authorities intend not to use the procedure described ... [above], an independent evaluation should be carried out by one or more independent asset valuers prior to the sale negotiations in order to establish the market value on the basis of generally accepted market indicators and valuation standards. The market price thus established is the minimum purchase price that can be agreed without granting State aid.

The above principles might also be relevant in assessing sales of other types of public assets.

In view of the information provided, the Commission intends to address a letter to the Italian authorities requesting information, in order to gather further elements, both in relation to other aspects of the case, and to assess the possible presence of State aid.

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(1)  OJ C 209, 10.7.1997.

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