WRITTEN QUESTION E-3930/00

by Joaquim Miranda (GUE/NGL) and Ilda Figueiredo (GUE/NGL) to the Commission

(13 December 2000)

Subject: Safeguarding the European shipbuilding industry

The European Union's shipbuilding industry is known to be experiencing problems, especially in Portugal. Nevertheless, indifferent to this situation Soflusa, a company belonging to the CP group in Portugal, responsible for the river link between Lisbon and Barreiro, decided to purchase, from an Australian company (Austral Ships), eight new catamaran-type ships for a total value of approximately PTE 10 thousand million, 60 % of which is funded by the Community.

In response to the international invitation to tender the best bid was from Estaleiros Navais of Mondego, Portugal, which was informed of the fact, but Soflusa decided to ignore it.

Can the Commission therefore say:

1. what position it will adopt regarding the decision of the Portuguese company Soflusa, which gave preference to an Australian shipbuilding company, blatantly ignoring the results of an international call to tender;

2. how it intends to safeguard the interests of European shipbuilders, including Portuguese ones, in situations such as that outlined above?

Answer given by Mr Bolkestein on behalf of the Commission

(1 March 2001)

The information provided by the honourable Members does not permit the Commission to comment on the correctness of the procedure followed by the Soflusa company of Portugal in connection with the award of a contract for catamaran-type vessels to an Australian firm (Austral Ships).

Community law includes directives on the award of public contracts exceeding Community thresholds(1) when the contracting body can be regarded as a contracting authority in accordance with these directives. Contracting authorities are the State, regional or local authorities and bodies governed by public law. The definitions of these can be found in the directives mentioned.

A contracting authority is free to allow access to contracts to economic operators from non-member countries under the same conditions as those laid down for economic operators from the Community.

In the case to which the honourable Members refer, although the value of the contract is well above the thresholds of the Community directives on public contracts, there is no information concerning the status of the Soflusa company to indicate whether or not it can be regarded as a contracting authority and thus required to comply with the directives. Even if the directives in question were applicable, however, the lack of full information on the matter means that it is not possible to offer an opinion on the correct conduct of the procedure.

The Commission is fully aware of the critical situation in world shipbuilding, mainly caused by unfair South Korean business practices, and its potential impact on Community shipyards.

In its report adopted on 15 November 2000(2), the Commission concluded that the availability of operating aid under Council Regulation (EC) No 1540/98 of 29 June 1998, establishing new rules on aid to shipbuilding(3), had not provided a solution to the problem of South Korean practices. However, among the various actions proposed, it committed itself to examining the possibilities of proposing measures to address the Korean problem in accordance with the Regulation.

Subsequently, at its meeting on 29 November 2000, the Commission reaffirmed that it was against any prolongation of operating aid. It also indicated that if, in the framework of the Trade Barriers Regulation (TBR) procedure, it did not achieve a negotiated solution with Korea satisfactory for the Community, the Commission would report to the Council by 1 May 2001 and would propose to bring the case to the World Trade Organisation (WTO) in order to seek remedy against unfair Korean practices. In addition the Commission would, at the same time, propose a defensive temporary support mechanism specifically designed to counter unfair Korean practices for a period necessary for the conclusion of the WTO procedure.

The Commission also declared its willingness to allow greater use of State aid for research and development (R&D) in the shipbuilding sector and recalled that substantial funding was also available under the Community research framework programme. In addition Community shipyards would continue to be able to benefit from other aid possibilities such as investment aid for innovation, regional investment aid for the modernisation of existing shipyards, as well as restructuring and closure aid, where necessary, to help in the process of structural adjustment and reconversion to other activities.

These views were presented to the Industry Council on 5 December 2000, which welcomed the Commission's determination to tackle the problem of unfair Korean competition and took note of the Commission's proposals in this regard.

The operational programme for the Lisbon and Tagus Valley region includes under Priority III-Measure 3.17 projects to improve river connections between the banks of the Tagus at Lisbon. These projects have not yet been submitted to the Commission, which is not therefore in a position to confirm or deny the figure of 60 % of Community funding claimed by the honourable Members. The average rate of funding for the measure is only 48,8 %, however, and in view of the fact that these projects are likely to generate income, the actual figure in the case of this project could in no event exceed 50 %.

(1) If appropriate, the directive relevant to the contract in question is Council Directive 93/36/EEC of 14 June 1993 coordinating procedures for the award of public supply contracts (OJ L 199, 9.8.1993), as amended by European Parliament and Council Directive 97/52/EC of 13 October 1997 amending Directives 92/50/EEC, 93/36/EEC and 93/37/EEC concerning the coordination of procedures for the award of public service contracts, public supply contracts and public works contracts respectively (OJ L 328, 28.11.1997).

(2) COM(2000) 730 final.

(3) OJ L 202, 18.7.1998.