WRITTEN QUESTION P-0853/97 by Heidi Hautala (V) to the Commission (5 March 1997)

Subject: Land transaction between the City of Helsinki and Finnlines

On 11 December 1996, Helsinki City Council decided to buy a plot of land in the Pikkala district of Kirkkonummi from Finnlines Oy, which carries on a substantial amount of foreign trade, and, payment, to give Finnlines Oy a plot of land in the Kamppi district of the city of Helsinki. According to the Council's decision, the current value of the plot acquired by the City of Helsinki in this transaction was 18 million marks, whereas the value of the plot transferred to Finnlines was between 34 and 42 million marks. Many people in Helsinki consider the value of the plot acquired by the City to be negligible and believe that the deal was done to prevent a competitor from carrying out the Vuosaari harbour project.

On 17 July 1996 the Commission decided that the City of Mainz had sold a plot of land to a private enterprise at a price below its market value and thereby indirectly aided the enterprise contrary to Community law. Could the land transaction between the City of Helsinki and Finnlines Oy be regarded as constituting indirect aid from the City to Finnlines Oy on the grounds that the City bought the plot of land from the latter at a price above its market value? Will the Commission investigate the details of the transaction, and its legality? Does the Commission consider the harbour project a public project of a kind which should be put out to tender in accordance with the rules of fair play rather than competition being prevented by buying possible competitors out of the market in advance?

Answer given by Mr Van Miert on behalf of the Commission (10 April 1997)

As regards the sales of publicly owned land and the possible financial benefits in favour of the buyers in the context of such transactions, the Commission adopted on 20 November 1996 a communication on aid elements in land sales by public authorities. It should be noted that the evaluation of the price of the land for state aid control purposes can be based on either an unconditional public tender or an evaluation carried out by an independent expert. The communication does not concern the public acquisition of land or the letting or leasing of real estate by public authorities. Such transactions may indeed also include state aid.

On the basis of a preliminary assessment, the Commission notes that the contract for the exchange of land in Pikkala and Kamppi between the city of Helsinki and Finnlines Oy may include elements of state aid, to which the above communication may be applicable. The Commission, not knowing all the details of the case, cannot at this stage take a final position on the matter. The Commission will therefore request further information on the matter from the Finnish authorities in order to be able to assess whether the exchange of land at issue includes state aid in the meaning of Article 92(1) of the EC Treaty. Aid is prohibited only if it fulfils simultaneously all the criteria laid down in Article 92(1) of the EC Treaty (aid is granted by the state or through public resources; the aid favours certain enterprises or the production of certain goods; the aid distorts or threatens to distort competition and affects trade between Member States). If the project includes state aid satisfying the above criteria, the Commission must assess the legality of the aid and verify whether it is compatible with the state aid provisions.