WRITTEN QUESTION P-4154/97 by Karin Riis-Jørgensen (ELDR) to the Commission (7 January 1998)

Subject: Monitoring of capacity limits for the MTW shipyard in east Germany

In a decision published in the Official Journal of 14 November 1997 ((OJ C 344, 14.11.1997, p. 2. )) the Commission announced that the MTW shipyard in east Germany had produced 1.6% more in 1996 than the maximum authorized capacity.

The Commission has asked the yard to pay back DM 720 000, which is not 1.6% of the aid received. Instead the Commission has instructed it to reduce production in 1997 to a level 1.6% below its official capacity of 100 000 cgt.

Since the aid received was conditional on adherence to the capacity ceiling why has the Commission not demanded repayment of the aid by the MTW yard, whose 1996 production exceeded the capacity ceiling?

Why has the Commission not instructed the MTW yard to effect changes in its installations so that capacity is reduced to the approved level instead of merely demanding a cut in production?

Will the Commission make use of the possibilities open to it and generally withhold approval of future aid payments to shipyards to ensure that the requirements set by the Council and Parliament are met?

Answer given by Mr Van Miert on behalf of the Commission (3 February 1998)

As set out in the decision to release a first tranche of restructuring aid to MTW-Schiffswerft and Volkswerft to which the Honourable Member refers, the legal base for the assessment of the operating aid granted to the yard is Council Regulation (EC) No 1013/97 on aid to certain shipyards under restrictions ((OJ L 148, 6.6.1997. )). Article 2 of this Regulation stipulates that if the Commission considers that the conditions attached to any authorization of aid pursuant to this Regulation have not been complied with, it may require suspension of the aid payments and/or recovery of aid. Respect of the capacity limitation is one of the conditions for the aid.

The language of the Article requires the Commission to examine the facts and circumstances related to the non-respect of a condition and to decide then whether aid payments are to be suspended or recovered. In this case the excess of the capacity limitation was detected at a relatively early stage. It related primarily to one vessel started in 1996 and delivered in 1997. It was therefore natural to require first of all a reduction of the production in 1997 to compensate for the excess in 1996. To compensate for any further advantages which the yard may have obtained by the advanced production of part of the vessel in question it was decided to reduce in addition the first tranche of the operating aid by DM 720 000. This direct reduction is in line with the rules of the Regulation as it replaces a recovery when the aid is not yet paid.

Given the origin of the capacity excess the Commission did not consider it appropriate to require changes to the installations of the yard as suggested by the Honourable Member. It is recalled that the capacity of a shipyard is not only determined by the dimensioning of key installations but equally by its work organization and production programme.

Under the provisions of the Regulation the Commission supervises the respect of the conditions set for the aid to the restructuring programmes by an intensive monitoring programme including on-site inspections with the assistance of external specialized consultants. The Commission will take action as foreseen in the relevant Community legislation in case of non compliance with the conditions.