WRITTEN QUESTION P-3234/00

by Neil MacCormick (Verts/ALE) to the Commission

(12 October 2000)

Subject: Ferries on the West Coast of Scotland

With regard to the final paragraph of Section 9 of the Commission's Community Guidelines on State Aid to the Maritime Sector, and in light of the Commission's replies to previous questions of mine (e.g. E-0999/00 and others) on the subject of ferries on the West Coast of Scotland, will the Commission please state:

1. Why, if at all, there is any doubt that the ferry routes in question, served by a publicly-owned operator wholly owned by the Scottish Executive, should not each qualify as appropriate recipients of proportionate state aid by the Scottish Executive as the relevant governmental institution of the Member State, and

2. what the Commission considers to be a reasonable upper limit to the proportionality of a subsidy to support as PSO in such cases?

Answer given by Mrs de Palacio on behalf of the Commission

(13 November 2000)

As the Commission pointed out in its reply to the Honourable Member's Written Question E-999/00(1), the EC Treaty establishes both the principle of impartiality with regard to the system of property ownership and the principle of equality between public and private undertakings. The fact that the ferry services on the West Coast of Scotland are currently operated by a publicly-owned company wholly owned by the Scottish Executive therefore does not mean that such services fall outside the scope of the EC Treaties and the legislation based upon them.

As the Honourable Member recognises, these lifeline ferry routes require the continued support of the taxpayer. Section 9 of the Community guidelines on state aid to maritime transport(2) foresees the possibility of such financial compensation provided that it is directly related to the calculated deficit made by the operator in providing the service. The guidelines also provide that such financial compensation need not be formally notified to the Commission if a certain number of conditions are met. One of these conditions is the expectation of a public tender. A tender not only satisfies the requirement of non-discrimination defined in Article 4 of Council Regulations (EC) 3577/92 of 7 December 1992 applying the principle of freedom to provide services to maritime transport within Member States (maritime cabotage)(3), but also ensures that, by testing the market, there is no overcompensation. Any operator, whether private or public, subject to such a tendering requirement, will necessarily face competitive pressures to improve management and operating methods to ensure that they are in a position to offer the most attractive bid. This in turn ensures that the demand on the public purse is reduced and that the taxpayer is getting the maximum value for money.

With respect to the Honourable Member's request for the Commission to define a reasonable upper limit to the proportionality of a subsidy required to support a public service obligation, the appropriate financial compensation is necessarily dependent upon the individual circumstances of each route. This is most effectively and transparently determined by market forces in a public tendering process.

(1) OJ C 46 E, 13.2.2001, p. 102.

(2) OJ C 205, 5.7.1997.

(3) OJ L 364, 12.12.1992.