2002/142/EC: Commission Decision of 18 July 2001 on the State aid implemented by the Netherlands in favour of Valmont Nederland BV (Text with EEA relevance) (notified under document number C(2001) 2231)
Date: 2001-07-18
Institutions: European Commission
Subjects: Netherlands, State aid, control of State aid, industrial plot, infringement of EU law, location of industry

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COMMISSION

COMMISSION DECISION

of 18 July 2001

on the State aid implemented by the Netherlands in favour of Valmont Nederland BV

(notified under document number C(2001) 2231)

(Only the Dutch version is authentic)

(Text with EEA relevance)

(2002/142/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European
Community, and in particular the first subparagraph of Article
88(2) thereof,

Having regard to the Agreement on the European Economic
Area, and in particular Article 62(1)(a) thereof,

Having called on interested parties to submit their comments
pursuant to the provisions cited above (1) and having regard to
their comments,

(2)

Whereas:

1. PROCEDURE

(1)

In the spring of 1998 the Commission became aware of
press articles alleging that between 1993 and 1995
municipalities had misused money of the province of
in various ways in order to attract
North Brabant
companies (2). It requested information by letter of 1
April 1998 (D/51488). The Netherlands authorities
replied by letter of 2 July 1998, registered as A/35148
on 6 July. The Commission asked for further informa-
tion and reminded the Netherlands Government of these
requests by letters of 29 October 1998 (D/54414), 21
December 1998 (D/55299), 31 March 1999 (D/51425),
2 August 1999 (D/63284), 6 September 1999 (D/
63682), 27 October 1999 (D/64481), 24 January 2000
(D/50335) and 30 August 2000 (D/54456). The Nether-
lands authorities provided the requested information by
letters of 19 January 1999 (registered as A/30448 on 19
January 1999), 23 August 1999 (registered as A/36473
on 25 August 1999), by e-mail of 29 November 1999
and by letters of 10 February 2000 (registered as A/

(1) OJ C 37, 3.2.2001, p. 44.
(2) ‘Gedeputeerden werkten mee aan U-bocht’, Brabants Dagblad, 6
March 1998; ‘U-bocht rammelde flink’, Brabants Dagblad, 10 March
1998;
‘U-bocht strijdig met regels EU’, Brabants Dagblad, 10 March
1998.

31270 on 15 February 2000), 22 August 2000 (regis-
tered as A/36991 on 24 August 2000) and 5 September
2000 (registered as A/37421 on 13 September 2000).
At two meetings on 14 April 1999 and 23 May 2000
the Netherlands authorities provided further informa-
tion.

recipient,

the Vice-Chairman of

After being contacted by the parent company of the
the
Netherlands
Committee on International Relations of
the United
States House of Representatives intervened in the case.
In his letter of 11 July 2000 to the Head of the Commis-
sion Delegation in Washington and to the Netherlands
Ambassador in the United States, he sought assistance in
resolving the matter as the land sale at issue had been
concluded six years previously, in 1994. The Commis-
sion replied by letter of 11 August 2000, commenting
on the need for control of State aid by the European
Commission and stressing the importance of the prin-
ciple that unlawful aid is recovered from the recipient by
the competent authorities.

(3)

By decision of 18 October 2000,
the Commission
initiated the procedure laid down in Article 88(2) of the
EC Treaty with respect to the aid measures. By letter
dated 7 November 2000 (D/108153), it informed the
Netherlands of this decision. After asking for a two-week
extension of the deadline (letter of 5 December 2000,
registered as A/40420 on 11 December 2000), which
was granted by letter of 18 December 2000 (D/56227),
the Netherlands reacted to the decision by letter of 12
December 2000 (registered as A/30329 on 8 January
2001). The decision was published in the Official Journal
of the European Communities (3), inviting interested third
parties to submit their comments on the aid.

(3) OJ C 37, 3.2.2001, p. 44.

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(4)

(5)

(6)

(7)

The Commission received one comment from an inter-
ested party, namely the recipient of the aid (letter of 20
February 2001, registered as A/31474 on the same
date). It forwarded the comment to the Netherlands by
letter of 13 March 2001 (D/51072). This letter also
contained several questions with regard to the aid meas-
ures. After asking for a six-week extension of the dead-
line (letter of 17 April 2001, registered as A/33188 on
20 April 2001) and after the Commission granted a
shorter extension by letter of 30 April 2001 (D/51755),
the Netherlands authorities sent their reaction and the
answers by letter of 14 May 2001 (registered as
A/33915 on 17 May 2001).

2. DETAILED DESCRIPTION OF THE AID

2.1. The recipient

Valmont is a subsidiary of Valmont Industries Inc., a
United States-based company manufacturing mechanised
irrigation equipment, posts for lighting, transport, utility
and communication applications, and custom coated
and fabricated products for various industrial uses. It
operates 21 manufacturing plants in four continents. Its
annual turnover in 2000 was USD 846 million. The
company has about 5 500 employees. Within the EU it
operates production sites in the Netherlands, France,
Spain and Germany (1).

In 1991 Valmont Industries Inc., bought the Netherlands
the 1940s had
company Nolte BV, which since
produced poles for public lighting and for traffic signs.
The company now operates under the name of Valmont
Nederland BV and its current product range includes
several types of steel or aluminium posts between 3 m
and 80 m high or even higher, to be used for all kinds
of
In 1994 the
company bought 3 ha of land on which a new produc-
tion site was set up.

traditional and modern purposes (2).

2.2. Aid via the land sale

In 1993 and 1994 the Province of North Brabant
invested NLG 20 million (EUR 9,1 million) in strength-
ening the economic structure and improving the busi-
ness climate in the province. The financial resources
were used to tackle infrastructure bottlenecks on indus-
trial estates in the province. The projects were carried
out by the municipalities, which received money from
the province for this purpose. In fact, some municipali-
ties had already earmarked resources of their own for
these projects. The provincial money consequently
enabled them to use these resources for other purposes.
This practice was labelled the 'U-turn' (‘U-bocht’). The

(1) www.valmont.com.
(2) www.valmont.nl.

(8)

(9)

province had stipulated that the municipalities must not
use these resources for direct (financial) aid to compa-
nies.

involved expansion and improvement of

In 1994 the Province of North Brabant made available
NLG 400 000 to the municipality of Maarheeze (now
part of the municipality of Cranendonck) for the infra-
structure project ‘Philipscomplex/Den Engelsman’. The
the
project
infrastructure of the industrial estate at a total cost of
NLG 1 469 000 (EUR 666 000). The municipality had
already earmarked financial resources for this project
which were subsequently used for other purposes. In
this case the municipality used the provincial money to
write off the accumulated losses of the municipal depart-
ment responsible for managing the industrial estate,
enabling the land to be sold at a lower price. In 1994
the municipality of Maarheeze subsequently sold 3 ha of
land to Nolte BV, now Valmont Nederland BV (herein-
after ‘Valmont’), for NLG 900 000 (EUR 408 402); this
works out at NLG 30 (EUR 13,61) per m2.

The Netherlands Government provided a land valuation
report by an independent expert dated 4 December
1998. According to the report, the price of land in
Maarheeze at the time was NLG 42,50 (EUR 19,29) per
m2. On the basis of this price, the value of the land
would
The
be NLG 1 275 000
the land sale
Commission therefore assumed that
NLG 375 000
aid
contained
of
an
the meeting with the
Following
(EUR 170 168).
Commission on 14 April 1999, the Dutch authorities
requested the company to pay back the supposed aid
element
(after subtracting the de minimis amount of
EUR 100 000 (3), however). The company has so far
refused to do so.

(EUR 578 570).

element

2.3. Aid via the construction of a car park on the

premises of Valmont

(10)

the municipality paid NLG 250 000
In addition,
(EUR 113 445) for the construction of a public car park
on the premises of Valmont.

2.4. Grounds for initiating the procedure of Article

88(2) of the EC Treaty

(11) As the municipality of Maarheeze was not located in an
assisted area within the meaning of Article 87(3)(a) or
(c), the Commission doubted whether the measures were
compatible with Community legislation. No other justifi-
cations seemed applicable. The Commission also had
doubts regarding the public nature of the car park.

(3) Commission notice on the de minimis rule for State aid (OJ C 68,
6.3.1996, p. 9). This notice has been replaced by Commission
Regulation (EC) No 69/2001 (OJ L 10, 13.1.2001).

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3. COMMENTS FROM THE NETHERLANDS

It does not
several companies in Valmont's vicinity.
receive payments from any of the users for their use of
the car park. It concludes that the car park meets the
definition of ‘public’ or ‘semi-public’ property for the
purposes of Community State aid rules.

(12)

(13)

The Netherlands authorities submitted a land valuation
report from 1994. Unfortunately, this report was not
made available earlier. It was commissioned by Valmont
in order to obtain bank financing secured by the valued
property. The valuation in fact relates to both the build-
ings and the land. According to this report, the value of
the land would be NLG 1 050 000 (EUR 476 000),
which corresponds to NLG 35 (EUR 15,88) per m2.
The valuer for the 1994 report commented on the
difference with the 1998 report in a new note that was
attached to the submission by the Netherlands. The
difference would be attributable in part to the fact that
this report gives a valuation of the land when it was no
longer undeveloped, resulting in a lower value. The
1994 report also contains a correction for conveyancing
costs. Moreover, the valuer for the 1994 report main-
tains that the 1998 report does not take into account
the fact that about one third of the land is not directly
accessible from the public highway.

The Netherlands authorities also submitted declarations
by three companies that regularly use the car park and
maintained that it was available for use by other compa-
nies as well. This would be confirmation that the car
park is a public one. The municipality and Valmont had
concluded a ‘gentleman's agreement’ on the public use
of the car park and this agreement is strictly enforced.
The municipality has the powers to enforce the agree-
ment as the land use plan does not allow buildings on
this part of the land. If Valmont wished to use the car
park for buildings, it would have to seek an exemption
from the land use plan from the local administration,
something which would be refused by virtue of the
agreement. In this way, continued use of this part of the
land as a public car park would be ensured.

4. COMMENTS FROM INTERESTED PARTIES

(14)

In its

Following publication of the decision to open the proce-
dure, the Commission received comments only from the
recipient company, Valmont.
letter Valmont
endorses the arguments put forward by the Netherlands
authorities. In particular it stresses the new information
in the land valuation report prepared in 1994 and states
that the amount of aid calculated on this basis would
remain below the de minimis threshold of EUR 100 000.
Valmont also confirms that the car park is used by

5. ASSESSMENT OF THE AID

5.1. The aid element in the price of the land

(15)

(16)

(17)

Sales of land and buildings by public authorities may
contain State aid in favour of the buyers. The Commis-
sion communication on State aid elements in sales of
land and buildings by public authorities (1) sets out a
general approach that is to be used to establish whether
there is such an element of State aid. Although the land
sale took place before the communication was adopted,
the same principles apply since the communication
clarifies a policy that, at the time of the adoption, had
already existed for more than ten years (2). However, the
Commission is aware that the case law on this point was
still limited at the time of the land sale and it does not
expect the transaction to have complied with the precise
content of the communication.

Point 2(a) of the communication gives public authorities
the option of using an independent evaluation of the
land price prior to the sale negotiations in order to
establish the market value. The market price thus estab-
lished is the minimum price that can be agreed without
granting State aid. In the present case, there are two
valuation reports. Both reports were drawn up after the
sale.

In this case, the Commission cannot rely on the 1994
report. This report gives an evaluation of the complete
premises,
including the building. It does not give an
estimate of the value of the land as sold by the munici-
pality, i.e. undeveloped. This is illustrated by the method
by which the land value is arrived at: the value is calcu-
lated by taking the total value at sale minus building
costs. The fact that the report makes a correction for
conveyancing costs also shows that it does not relate to
the situation in which Valmont bought the land but to
the theoretical situation in which Valmont would sell it.

(1) OJ C 209, 10.7.1997, p. 3.
(2) The Commission already declared in 1963 that Article 92 was
applicable to the sale of land and buildings for free or on particu-
larly favourable conditions. See the answer to Written Question No
48 by Mr Burgbacher (OJ 125, 17.8.1963, p. 2235/63).

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(18)

The 1998 report bases its calculation on the 1994 prices
of other land sales by the municipality concerned and of
land sales by other parties. In his subsequent comment,
the valuer for the 1994 report maintains that the 1998
report does not take into account the fact that about one
third of the land is not directly accessible from the
public highway. However, this claim is not supported by
evidence. The 1998 report explicitly states that
the
valuers visited the site in order to get an impression of
the location, accessibility, quality and marketability of
the land. Therefore, on the basis of the information
available, the Commission can rely on this report. As it
concludes that the market price for the land sold to
Valmont was NLG 42,50 (EUR 19,29) per m2, the aid
in the land sale amounts to NLG 375 000
element
(EUR 170 168) in favour of the buyer.

(19)

It

In the Commission's view, this benefit is caught by the
prohibition under Article 87(1).
is specific to the
buyer, Valmont. It is granted through State resources as
the land is sold directly by the local authorities. It can be
expected to affect
trade between Member States as
Valmont and its parent company Valmont Industries
Inc. are active in sectors where the products are traded
internationally.

5.2. The aid element in the car park

(20) Generally, the Commission assumes that the provision
of a public car park does not represent any benefit for a
particular company since the costs of such investment
are usually financed out of local taxes, to which the
companies and private persons benefiting themselves
contribute.
In this case, however, Valmont must be
regarded as the main beneficiary of the car park. It is
probable that Valmont is the main user of the car park
on its own premises. Moreover, if the municipality had
not constructed the car park, Valmont would itself have
had to finance the provision of sufficient parking space.
Given the kind of activities
is
engaged, namely the manufacture of various types of
aluminium and steel posts between 3 m and 80 m
high, it is clear that Valmont needs substantial parking
space. In addition, the car park is separated from the
street by a fence, with the result that an occasional
passer-by does not have the impression that it is a public
car park. Apart from the three letters from firms that use
the car park,
the Netherlands authorities have not
produced any proof of the public use of the car park.
The ‘gentleman's agreement’ on the use of the car park
by other firms is not sufficient for it to be regarded as a
public car park.

in which Valmont

(21)

it is true, the main beneficiary but three
Valmont is,
letters from firms in Valmont's vicinity confirm that they
make regular use of the car park free of charge for
parking their trailers, and the Netherlands authorities
confirmed that it is available for use by other firms as
well. One of these letters shows that the alternative for
this company would be for its trailers to be parked near
drivers' homes. Furthermore,
the municipality can
strictly enforce its ‘gentleman's agreement’ with Valmont
and guarantee that this part of the land will continue to
be used as a car park by means of its powers under the
land use plan. Accordingly,
the car park has to be
regarded as ‘partly private’ or ‘semi-public’.

(22)

In view of the foregoing observations, the Commission
regards half of the costs of constructing the car park as
normal business costs. The fact that the municipality
paid the full costs of the car park constitutes a specific
benefit for the company which,
is
caught by the prohibition in Article 87(1). This benefit
must be considered to amount to at least NLG 125 000
(EUR 56 723).

like the land sale,

5.3. Appraisal of the compatibility of the aid

(23)

The Commission has assessed whether the exemptions
set out in Article 87(2) and (3) of the EC Treaty apply.
Aid may be deemed compatible with the common
market under Article 87(2). However, the aid measures
(a) do not have a social character and are not granted to
individual consumers, (b) are not designed to make good
the damage caused by natural disasters or exceptional
occurrences and (c) are not required in order to compen-
sate for the economic disadvantages caused by the divi-
sion of Germany. The exemptions in Article 87(3)(a), (b)
and (d), which relate to the promotion of the economic
development of areas where the standard of living is
abnormally low or where there is serious underemploy-
ment, to projects of common European interest and to
the promotion of culture and heritage conservation, do
not apply either.

(24) Nor did the Netherlands authorities attempt to justify

the aid on the grounds enumerated above.

(25)

The first part of the exemption in Article 87(3)(c), which
refers to aid to facilitate the development of certain
economic activities, does not apply since the aid did not
serve such purposes as research and development, the
environment or investment by small and medium-sized
enterprises. The aid does not relate to a specific project
to be carried out by the recipient that could be seen as
promoting the common interest. The Commission has

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based its assessment on the fact that the proposed aid
was designed to ensure investment in the municipality
of Maarheeze. Thus, it scrutinised the aid in the light of
the regional guidelines that are based on the second part
of the exemption in Article 87(3)(c), namely aid to facili-
areas.
tate
However, the municipality of Maarheeze was not located
in a region eligible for regional aid at the time of the
land sale. Consequently,
the exemption in Article
87(3)(c) does not apply.

the development of

certain economic

Since none of the exemptions in Article 87 apply, the
aid measure is incompatible with the common market.

If the aid proves incompatible with the common market,
in accordance with the
the Commission is required,
ruling given by the Court of Justice in Case 70/72 (1),
upheld in Cases 310/85 (2) and C-5/89 (3), to require the
Member State to recover from the recipient all aid
granted unlawfully. This measure is necessary in order to
restore the previous situation and to remove all the
financial benefits which the firm receiving the unlawful
aid has improperly enjoyed since the date on which the
aid was paid. Recovery of the incompatible and unlawful
aid is an obligation imposed on the Commission by
Council Regulation (EC) No 659/1999 (4).

The aid must be repaid without delay in accordance with
the procedure laid down by Netherlands law provided
that it allows the immediate and effective execution of
the Commission Decision. The aid includes interest
calculated from the date on which it was granted to the
date on which it is actually recovered. Interest is calcu-
lated on the basis of the commercial rate, with reference
to the rate used to calculate the grant equivalent of
regional aid.

6. CONCLUSIONS

The sale of 3 ha of land in 1994 by the local authorities
contains
element of NLG 375 000
(EUR 170 168).

State

aid

a

The construction of the car park on the premises of
financed by the municipality,
Valmont, which was
contains
element of NLG 125 000
a
(EUR 56 723).

State

aid

(32)

Both aid measures are incompatible with the common
market and the aid has to be recovered from the reci-
pient,

HAS ADOPTED THIS DECISION:

Article 1

The land transaction and the construction of the car park on
the premises of the company contain elements of State aid
within the meaning of Article 87(1) of the EC Treaty in favour
of Valmont. These aid elements amount
to NLG 375 000
(EUR 170 168) and NLG 125 000 (EUR 56 723) respectively.

Article 2

The aid elements referred to in Article 1 are incompatible with
the common market.

Article 3

The Netherlands shall

1.
take all necessary measures to
recover from the recipient the unlawful aid referred to in
Article 2.

2.
Recovery shall be effected without delay and in accord-
ance with the procedures of national law provided that they
allow the immediate and effective execution of the decision.
The aid to be recovered shall include interest from the date on
which it was at the disposal of the recipient until the date of its
recovery. Interest shall be calculated on the basis of the refer-
ence rate used for calculating the grant equivalent of regional
aid.

Article 4

The Netherlands shall
inform the Commission, within two
months of notification of this Decision, of the measures taken
to comply with it.

This Decision is addressed to the Kingdom of the Netherlands.

Article 5

Done at Brussels, 18 July 2001.

The Netherlands has breached Article 88(3) of the EC
Treaty by implementing the measures without proper
notification.

For the Commission

Mario MONTI

Member of the Commission

(26)

(27)

(28)

(29)

(30)

(31)

(1) Case 70/72 Commission v. Germany [1973] ECR 813.
(2) Case 310/85 Deufil GmbH und Co. KG v. Commission [1987] ECR

901.

(3) Case C-5/89, Commission v. Germany [1990] ECR I-3437.
(4) OJ L 83, 27.3.1999, p. 1.