2003/521/EC: Commission Decision of 9 April 2002 on the State aid implemented by Italy for cableway installations in the Autonomous Province of Bolzano (Text with EEA relevance) (notified under document number C(2002) 1191)
Date: 2002-04-09
Institutions: European Commission
Subjects: Italy, State aid, control of State aid, telecommunications equipment

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COMMISSION

COMMISSION DECISION

of 9 April 2002

on the State aid implemented by Italy for cableway installations in the Autonomous Province of
Bolzano

(notified under document number C(2002) 1191)

(Only the Italian text is authentic)

(Text with EEA relevance)

(2003/521/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Com-
munity, 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,

(4)

The Commission received comments from interested
parties and forwarded them to Italy, which was given
the opportunity to react.

(5)

By letter of 12 March 2002,
undertook to re-notify the scheme in 2006.

the Italian authorities

Having
called
comments (1), pursuant
having regard to their comments,

interested

on

their
to
to the provisions cited above and

submit

parties

Whereas:

I. PROCEDURE

(1)

(2)

(3)

By complaint dated 27 February 1996, received on 21
May 1996, the Commission was informed that Italy had
implemented a measure granting aid for cableways in
the Province of Bolzano. By letters dated 29 July 1996,
21 January 1997 and 23 June 1998 Italy provided the
Commission with further information.

By letter of 4 August 2000, the Commission informed
Italy that it had decided to initiate the proceedings under
Article 88(2) of the EC Treaty in respect of the measure
in question.

The Commission decision to initiate proceedings was
published (2) and the interested parties were invited to
submit their comments on the measure.

(1) OJ C 27, 27.1.2001, p. 37.
(2) See footnote 1.

II. DETAILED DESCRIPTION OF THE MEASURE

(6)

(7)

Following late notification and an investigation linked to
aid granted by DG REGIO under a 5b aid programme,
the Commission approved by letter No NN 45/91 of 4
June 1991 the aid provided for by Bolzano Provincial
Law No 2/1991 of 21 January 1991 on the budget for
1991 and the period 1991 to 1993 (hereinafter ‘Law No
2/1991’), under which State aid may be granted to cable-
ways in the province with a maximum aid intensity of
33 % gross of the cost of individual projects.

The Autonomous Province then approved a new law,
Law No 6 of 4 March 1996 on aid for the construction
and modernisation of cableways (hereinafter ‘Law No 6/
1996’). According to the Province,
the law simply
renews the old aid scheme and allows for investment aid
of up to 90 %.

(8)

Article 1(1) of Law No 6/1996 provides for investment
aid in the form of non-repayable grants for:

(a) the construction of new passenger transport facilities
funiculars, belt

in the form of aerial cableways,
conveyors or ski lifts;

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(b) the qualitative improvement, technical innovation or
increase in the capacity of existing cableway installa-
tions;

(c) the replacement of old parts of existing installations;

(d) technical improvement and modernisation of ticket

vending and reading machines.

Article 1(2) of Law No 6/1996 lays down the maximum
aid intensities (as a percentage of investment costs), as
follows:

(a) 90 % for shuttle-service bicable ropeways, which are
of special social importance as they link villages;

(b) 45 % for funiculars, bicable and monocable rope-

ways, and belt conveyors;

(c) 45 % for ticket vending and reading machines;

(d) 50 % for single ski lifts, which fulfil a social-pedago-
gical purpose and are especially useful for the local
population because they supplement significantly the
existing range of sports and leisure facilities in winter
time;

(e) 30 % for ski lifts not covered by point (d).

Under Law No 6/1996, grants provided for in Article
1(2)(a), (b) and (c) must be paid out in equal instalments
over three years. The grants provided for in Article
1(2)(d) and (e) are set off against a single year's budget.

The aid intensities for investments under Article 1(2)(b)
and (d) may be increased by 30 percentage points when
the project is of considerable general interest or when it
serves to link ski resorts or to link ski resorts with
villages or when, because of environmental considera-
tions, a technically costly solution must be chosen.

granting State aid are general in nature. The State aid in
question puts pressure on investors to build other
cableway installations, seriously damaging the country-
side and the environment. Other aid has been granted in
addition to that granted under Law No 6/1996, and the
State aid distorts competition.

The Austrian authorities consider that State aid granted
in this field on the terms in question, i.e. up to 90 %,
does not distort competition to an extent contrary to the
common interest. Aid granted on the basis of political
and economic principles to firms that would otherwise
be loss-making as they are located in regions where a
private operator would not
is in the general
interest of the Member State as well as the Community.
The authorities are concerned by the fact
the
Commission is not applying Article 86(2) of the Treaty
in the present case.

invest

that

The Association of German Cableways
(Verband
Deutscher Seilbahnen) stated that there is strong compe-
tition in the international cableway market.
It also
pointed out that some neighbouring European countries
apply the reduced VAT rate (half of the standard rate)
while in Germany the full VAT rate is applicable to
cableways as they are specifically excluded from the
reduced rate. The Community Directive on public
contracts, however, specifically includes cableways.

(13)

(14)

(15)

The Associazione Alpina del Sud-Tirolo (Alpenverein
Südtirol) stated that, because cableway constructors were
granted State aid, they built a considerable number of
cableways and, as a result, the unspoilt landscape of the
Southern Tyrol was under strong threat.

III. COMMENTS FROM INTERESTED PARTIES

IV. COMMENTS FROM ITALY

Fianet (International Federation of national associations
of passenger transport by rope Railways) stressed the
in a mountain
cableway transport
importance of
economy in view of its contribution to the development
of employment, the protection of the environment and
the improvement of the economic position of the local
population. It considers that State aid in this field does
not distort competition.

(16)

(12)

The South Tyrolean Federation for nature conservation
stated that there are no objective criteria for determining
the amount of State aid allowed and that the reasons for

the Treaty,

In reply to the proceedings initiated under Article 88(2)
authorities
of
provided further information by letters dated 22 January
2001 and 24 May 2001, in which they claim:

the Bolzano provincial

(a) that the former Law No 2/1991 of 21 January 1991,
which had been examined and authorised by the
Commission (NN 45/91), and the new Law No 6/
1996, which simply recasts and consolidates the
the latter
existing provincial
being a continuation of the former;

rules, are identical,

(9)

(10)

(11)

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(b) that cableways are

infrastructure and
transport
services of general economic interest and can be
divided into three categories as follows:

category A, overhead cableways constituting trans-
port infrastructure that replaces public road services.
They are the only means of transport linking moun-
tain communities and are, therefore, of special social
importance;

category B, overhead
cableways
intended for leisure purposes, of a mainly local or
social nature;

and surface

category C, overhead and surface cableways serving
tourist areas.

(c) that Law No 6/1996 is unlikely to affect trade;

(d) that the exemption under Article 87(3)(c) is applic-
able since the aid provided for in the Law is intended
to facilitate investment by SMEs.

without qualification. Public financing of infrastructures
open to all potential users in a non-discriminatory way
and managed by the State does not normally fall under
Article 87(1) of the EC Treaty, as the Commission has
already concluded (3), since in such cases no advantage is
conferred on an undertaking within the meaning of
Article 87(1) that is in competition with other undertak-
ings. Most transport infrastructure financing takes the
form of this kind of investments, e.g. a toll-free public
road.

(21)

In the case of cableway installations, however, operators
have effective control over access to their facilities and
customers normally pay for the use of the installation. A
cableway is typically run by a single operator and
cableway transport can, at
in principle, be an
economically viable activity exercised for profit by
private operators.

least

(17)

(18)

The Bolzano provincial authorities also point out that
the enterprises holding concessions to operate cableways
in the Province of Bolzano, whether they are public or
private enterprises, are all SMEs within the meaning of
the Community definitions and none of them exceeds
the thresholds that define an SME.

(22)

In addition, they stress that commercial cableways in
tourist areas have not been financed under Law No 6/
1996, with the exception of
the
Stelvio Pass and four in the municipality of Castelrotto,
Alpe di Siusi.

three cableways at

Transport operators and any other commercial users of
transport
infrastructures satisfy the definition of an
undertaking within the meaning of Article 87(1). It is
clear from the Court's case-law on the concept of ‘under-
taking’ that the central
issue is whether an economic
activity is being carried out. The organisational form is
less relevant. The Court of First Instance held in Aéroports
de Paris (4), that the management and provision of facil-
ities constitute an economic activity for the purposes of
Article 87(1) of the Treaty. A private or public transport
infrastructure manager that
the State
administration will invariably be regarded as an ‘under-
taking’. From the point of view of existing or potential
competitors, any financial benefit provided to such
undertakings could, in principle, distort competition.

is not part of

V. GENERAL CONSIDERATIONS REGARDING CABLE-

WAY INSTALLATIONS

Existence of State aid

(19)

State aid within the meaning of Article 87(1) of the EC
Treaty is present when certain undertakings are favoured
by any form of support granted through State resources
which distorts or threatens to distort competition and
affects trade between Member States.

(20)

It is sometimes argued that certain cableway installa-
tions, being transport infrastructures, are not subject to
reasoning cannot be accepted
State aid rules. This

(23) Moreover, not all cableway installations are used for
general mobility needs; many are intended for a specific
economic category of user, e.g. consumers of a service
that is not transport proper. Such is the case of cable-
ways used mainly by skiers. These offer a facility that is
essential to the practice of a sport rather than providing
a general transport service.

(3) See Commission decision of 14 September 2000 in Case N 208/
2000, SOIT (NL). See also the Commission White paper on fair
payment for infrastructure use: A phased approach to a common
transport infrastructure charging framework in the EU (COM(1998)
466 final, of 22 July 1998, Chapter 5, paragraph 43) and Commis-
sion Communication ‘Reinforcing Quality in Sea Ports: A Key for
European Transport’, COM(2001) 35 final, 13.2.2001, p. 11.

(4) Case T-128/98 Aéroports de Paris v Commission, [2000] ECR II-3929.

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Distortion of competition and effect on trade between Member
States

(29)

sports

It can be argued, however, that sports installations in
areas with few winter
facilities and limited
tourism capacity tend to have a purely local use and are
not capable of attracting users with a choice of installa-
tions in other Member States. In such cases there would
not be any distortion of competition or effect on trade
on the demand side. However, on the supply side,
it
would have to be determined whether the recipients
operated only at local level and whether State support
for that activity harmed or discouraged the alternative
supply of cableways by operators from other Member
States. The latter possibility would seem rather remote in
cases where there is a limited number of local users, the
service might not be economically viable and State
funding might be the only way of supplying it.

(30) Accordingly, State support for cableways intended for
sporting activities in tourist resorts would normally
distort competition and affect trade between Member
States. It is accepted, however, that there might be cases
of cableways with a purely local use where State funding
would not distort competition and affect trade between
Member States and would therefore not constitute State
aid under Article 87(1).

(24)

(25)

For a measure to constitute State aid within the meaning
of Article 87(1), it must essentially distort or be liable to
distort competition and affect trade between Member
States.
In the case of cableways, any distortions of
competition or any effects on trade between Member
States must be assessed with regard to their location, use
and size.

that are active

Cableway installations provide a service only at a given
location. The service cannot be provided elsewhere. This
fact, however, does not rule out the risk of an effect on
trade between Member States since there might be
operators
internationally and State
funding could confer advantages on the beneficiary or
discourage other, possibly foreign, operators
from
providing an alternative service in loco possibly by means
other than cableways. State funding could help to attract
non-resident users, e.g. skiers from the same or a
different country,
thereby diverting them from other
cableways, including those in other Member States.

(26)

In assessing these elements, it is useful to draw a distinc-
tion between cableways used for sporting activities and
those intended to satisfy the general transport needs of
the population.

Cableways used for sporting activities

Cableways meeting general transport needs

(27)

The number, price and quality of such cableways can
influence the choice of customers who could choose
cableways in other Member States instead. Unlike other
factors that may affect choice, such as climate,
land-
scape, accessibility and quality of catering, cableways
affect all users in a similar way and can be readily
compared between different resorts. Ski passes account
for a substantial share of the total costs of a winter
holiday and are often included in package holidays sold
by international operators. Funding of cableways in
mountain resorts therefore has an impact on the provi-
sion of services for winter sports, which is an interna-
tional business characterised by a high degree of intra-
Community trade and strong competition.

(28)

In addition, there are firms that operate cableways in
resorts in various Member States. Public funding confers
advantages that could be exploited in a market where
there is also cross-border competition for the supply of
the service.

(31)

Cableways that are mainly intended to satisfy general
transport needs of
the local population would not
normally influence the choice of users who have as alter-
natives resorts in other Member States. However, State
support could benefit an operator active internationally
or could adversely affect the actual or potential supply in
loco of an alternative transport means by an operator
from another Member State. It may be that in some
cases the recipient operates only locally and an alterna-
tive transport activity would not be economically or
technically viable:
in such circumstances the measure
would not distort competition or affect trade between
Member States. In other cases, the transport activity, by
cableway or other means, is technically or economically
viable and capable of attracting commercial operators
engaged in an economic activity under Article 87(1) of
the Treaty. In view of the gradual liberalisation of the
transport sector, it is possible that this transport might
be provided by operators from other Member States, in
which case the measures would distort or be liable to
distort competition and would affect
trade between
thereby constituting aid within the
Member States,
meaning of Article 87(1).

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(32)

To summarise, cableways used to support an activity
capable of attracting non-local users will generally be
regarded as having an effect on trade between Member
States. This might not, however, be the case for sports-
related installations in areas with few facilities and
Installations mainly catering
limited tourism capacity.
for the general mobility needs of the population would
have an effect on trade between Member States only if
there were cross-border competition in the supply of the
transport service.

principle that funding by the State must be provided
according to the ‘market economy investor principle’
continues to apply.
In other words, public funds in
excess of or on better terms than those that a private
investor would provide in the same circumstances
constitute State aid which must be notified under Article
88(3). This would apply to all
financial
intervention, including capital injections, loans and guar-
antees.

forms of

Criteria

(33)

In distinguishing between the types of installations, the
following factors, among others, should be taken into
account:

(37) Once the presence of State aid has been established, it is
necessary to examine whether the aid is compatible with
the common market under one of the exceptions in
Article 87(2) and (3). These considerations are without
prejudice to the application of Commission Regulation
(EC) No 69/2001 of 12 January 2001 on the application
of Articles 87 and 88 of the EC Treaty to de minimis aid
(the de minimis rule) (7).

(a) the location of the cableway (e.g. in an urban area or

linking such areas);

(b) its operating times (e.g. seasonal or all year; during

daylight or longer);

(c) whether use is predominantly local (number of daily

as opposed to weekly passes);

(d) the number

and capacity of

the

installations

compared with the number of resident users;

(e) the presence of other tourist facilities in the area.

(38)

In the transport sector a specific State aid approach is
needed in view of the obligation on the State to ensure
that transport services meet social and environmental
concerns. Article 73 of
the Treaty provides for an
exemption to meet those concerns.

(34) An aid scheme for a specific type of installation or one
which confers benefits that vary according to the type of
installation should set out objective criteria on the basis
of which the category of recipient is established.

(39)

Finally, under Article 86(2) of the Treaty, firms entrusted
with the operation of services of general economic
interest may qualify for exemption from the competition
rules if their application is liable to obstruct de jure or de
facto the performance of the particular tasks assigned to
them.

Compatibility of aid for cableways

Article 87

(35) Where cableways benefit (5) from State resources that
distort or are liable to distort competition and affect
trade between Member States, the resources are covered
by the State aid rules of the EC Treaty. The aid must be
notified under Article 88(3) of the Treaty and Council
Regulation (EC) No 659/1999 of 22 March 1999 laying
down detailed rules for the application of Article 93 of
the EC Treaty (6).

(36)

This is also true for cableways that are set up or
in which case the general
managed by public entities,

(5) Naturally, if cableways benefit from a measure of a general nature,
this would not qualify as State aid owing to the lack of selectivity.

(6) OJ L 83, 27.3.1999, p. 1.

(40) While the conditions for the application of the exemp-
tions provided for in Article 87(2)(b) (aid to make good
the damage caused by natural disasters or exceptional
occurrences) and (c)
(aid granted to the economy of
certain areas of the Federal Republic of Germany affected
by the division of Germany) must necessarily be assessed
on a case-by-case basis, exemption under Article 87(2)(a)
(aid having a social character, granted to individual
consumers)
to aid to cableway
operators.

is not applicable

(7) OJ L 10, 13.1.2001, p. 30.

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(41)

(aid to promote
Exemption under Article 87(3)(d)
culture and heritage conservation) for cableways would
normally be ruled out, while the application of Article
87(3)(a) (aid to promote the economic development of
areas where the standard of living is abnormally low or
where there is serious underemployment) and (aid to
promote the execution of an important project of
common European interest or to remedy a serious
disturbance in the economy of a Member State) needs to
be assessed on a case-by-case basis. The assessment
would have to adhere to the rules laid down for all
economic activities.

(42) Under Article 87(3)(c), State aid may be considered to be
compatible with the common market if it facilitates ‘the
development of certain economic activities or of certain
economic areas, where such aid does not adversely affect
trading conditions to an extent contrary to the common
interest’. In the past, it had been considered that those
requirements for exemption were met since skiers are
not very mobile. It is now considered that the provision
of services for winter sports has reached such a level of
economic development and cross-border competition
that departure from the rules applicable to economic
activities
in general would no longer be justified;
however, the considerations developed in recitals 50 to
55 below should be taken into account.

of aid meeting the needs of coordination of transport
refers to the need for government intervention in the
absence of competitive markets or in the presence of
market failures.

(45) According to the Commission's practice, three require-
ments must be fulfilled for aid to meet the needs of
coordination of transport within the meaning of Article
73 (9):

(a) if the State's contribution towards the total financing
of the project is necessary to enable the project or
activity to be carried out
the
Community;

in the interest of

(b) access to the aid is granted on non-discriminatory

terms;

(c) the aid does not give rise to a distortion of competi-
tion to an extent contrary to the common interest.

the rules governing,

(43) Aid to cableways might, depending on the case, be
compatible under
instance,
regional investment aid, aid to SMEs or restructuring aid
to restore the viability of a firm (8). It cannot, however,
be generally considered not to ‘adversely affect trading
conditions to an extent contrary to the common interest’
since it would have the effect of improving the competi-
tiveness of the beneficiaries in a sector where interna-
tional competition is strong.

for

Article 86(2)

(46) Where the financing of transport cableways constitutes
State aid, it would normally be assessed under Article
73; however,
the other types of
cableway may qualify for exemption under Article 86(2).

is possible that

it

Article 73

(44)

transport’

In contrast to Article 87(3)(c), the concept of ‘coordina-
tion of
in Article 73 involves more than
it
simply facilitating the development of an industry,
includes some form of planning by the State. In a liberal-
ised market coordination may be achieved by the market
itself as the free interplay of market
forces is not
hampered by market failures. Accordingly, the concept

(8) Commission Regulation (EC) No 70/2001 of 12 January 2001 on
the application of Articles 87 and 88 of the EC Treaty to State aid
to small and medium-sized enterprises (OJ L 10, 13.1.2001, p. 33);
Guidelines on State aid for rescuing and restructuring firms in diffi-
culty (OJ C 288, 9.10.1999); Guidelines on national regional aid (OJ
C 74, 10.3.1998, p. 9).

(47)

(48)

In general, cableways used for sporting activities do not
provide a service of general economic interest and their
financing cannot be justified under Article 86(2). Rather
than satisfying the general and basic needs of the popu-
lation, they aim to earn profits from winter sports. The
prices actually paid by users shows that this service is
not a basic good.

Certainly,
it is in principle for the Member States to
define which services they consider to be of general
economic interest. However,
the notion of general
economic interest servers cannot be extended to services
that are of a purely commercial nature and do not
respond to the general and basic needs of the population
for services that are regarded as an essential part of daily
life.

(9) See Commission proposal for a regulation of the European Parlia-
ment and the Council concerning the granting of aid for the coordi-
nation of transport by rail, road and inland waterway COM (2000)
5 final, 26 July 2000.

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(49)

These considerations are not invalidated by the fact that
the construction and operation of cableways are subject
to a concession which requires the firm to operate the
installation efficiently and to transport all users at
current rates. It is quite usual for a number of occupa-
tions and activities to be subject to special authorisations
and to certain requirements. In this respect the position
of cableway operators does not differ substantially from
that of firms in other sectors and does not mean that it
should be assessed under Article 86(2).

Transitional period

(50)

The Commission considers that State aid to cableways
could play an important part in supporting the balanced
economic development of the area. As regards mountain
regions in particular, State aid has in the past allowed
the development of one of
the few possible local
economic activities, with beneficial effects on employ-
ment and, ultimately, on the stability of the local popula-
tion and care of the land.

(51) However, the provision of services for winter sports has
become subject to increasing cross-border competition.
This changes the nature of the problems and increases
the distortion caused by the existence of aid to the
cableway sector. As the sector approaches maturity,
there is a greater risk of unbridled competition between
different areas of the Community. For these reasons, the
Commission's future policy in the sector needs to be
more clearly defined, strictly interpreted and uniformly
applied.

(52)

from several

The Commission recognises that firms in the sector have
largely benefited in the past
forms of
economic support from the national, regional and local
authorities. Some of these were considered compatible
aid under Article 87(3)(c). A change in policy imposing
stricter limits on compatibility would probably lead to
an adjustment of the price of the various services offered
for winter sports, with prices for the use of cableways
possibly increasing to compensate for the reduction in
subsidies. This change cannot be too abrupt and the
rules must be applied gradually.

(53) Accordingly,

the Commission identifies a transitional
from 1 January 2002 to 31
period of
December 2006, during which higher aid intensities

five years,

would temporarily be accepted for State aid to cable-
ways. Aid granted before the prescribed period will be
assessed on a case-by-case basis without reference to
compatibility thresholds fixed a priori.

(54) During the transitional period,

inter alia,

the Commission will
assess aid projects in the cableway sector by referring to
in the
the normal set of rules as clarified,
Commission Regulation on State aid to small and
medium-sized enterprises, in the guidelines on State aid
for rescuing and restructuring firms in difficulty and in
the Guidelines on national regional aid (10). However, it
will accept a temporary increase in the aid intensity
under the existing legislation and guidelines, as quanti-
fied below:

(a) 25 additional percentage points for aid granted in

2002;

(b) 20 additional percentage points for aid granted in

2003;

(c) 15 additional percentage points for aid granted in

2004;

(d) 10 additional percentage points for aid granted in

2005;

(e) 5 additional percentage points for aid granted in

2006 (11).

From 2007 onwards, aid not eligible for any of the
exemptions provided for by the Treaty and in the
various regulations and frameworks in force will be
declared incompatible. The analysis set out in recitals 19
to 34, and in particular the explanations given in recital
29, will still apply.

(55) On the basis of

the information available to the
Commission, the figures indicated, chosen as temporary
aid top-ups, and the five-year duration of the transitional
period seem to reconcile the need to allow sufficient
time for different areas to benefit from the temporary
rules and for beneficiaries to adjust to the new approach
with the need to bring the treatment of this sector into
line with that of other economic activities within a
reasonable time.

(10) See footnote 8.
(11) Aid that is disbursed in instalments to the beneficiary will be
assessed as a whole with reference to the intensity that can be
accepted at the time of granting. In the case of schemes that grant
aid at different points in time, the reference is the aid intensity at
the time of granting. That is to say, if the same scheme grants aid
in 2003 and 2004, the accepted aid intensity, other things being
equal, would be five percentage points lower for the aid granted in
2004.

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Related activities

(56) Where the cableway infrastructure under consideration
the operators can be
is mainly for servicing skiers,
described as providing a basic service for skiing. It is not
unusual
for the firm concerned also to offer other
directly related services which are equally indispensable
for skiing, such as maintenance of ski runs or the supply
of artificial snow. Accordingly, the investment eligible
for aid under the conditions described above can also
include, for example, the purchase of snow cannons or
maintenance vehicles as well as the initial costs of
preparing the ski run. However, investment that is not
essential to providing the basic installation service, such
as investment in skiing equipment for hire or in facilities
for ski schools, cannot be eligible for aid under the
abovementioned conditions.

VI. COMPARISON WITH THE MEASURES INTRODUCED

BY LAW No 2/1991

(57)

Law No 6/1996 allows aid to cableways in the Autono-
mous Province of Bolzano of up to 90 % of the invest-
ment cost. It amends the previous Provincial Law No 2/
1991, which provided for an aid intensity of up to 33 %
of the project costs.

(58) Article 1(1) of Law No 2/1991, notified to the Commis-
sion and approved by it by letter of 4 June 1991,
provides for aid with the following maximum intensities:

(a) 33 % for bicable ropeways, which are of special

social importance as they link villages;

(b) 15 % for funiculars, bicable and monocable rope-
ways as well as ticket vending and reading machines;

(c) one-off payments of up to 30 % to build and

improve the quality of drag lifts;

(d) one-off payments of up to ITL 200 million for the

reconditioning of cableways.

only up to 33 % of costs. Furthermore, there are some
aspects of the new law that are clearly new in substance.
To give one example, Article 1(2)(d) of Law No 6/1996
refers to single ski lifts, which fulfil a social and educa-
tional purpose and are granted investment aid of 50 %.
No mention was made under Law No 2/1991 of this
particular type of installation. The Commission therefore
concludes that there can be no doubt that Law No 6/
1996 is a new aid scheme. In any event, as the Commis-
sion decision of 4 June 1991 approving Law No 2/1991
was valid only for the period 1990 to 1993, the new
law should in any event have been notified to the
Commission.

VII. ASSESSMENT OF THE MEASURES INTRODUCED BY

PROVINCIAL LAW No 6/1996

(59)

By letter of 24 May 2001 the authorities of the Autono-
mous Province of Bolzano provided a list of 77 installa-
tions in the province that had already benefited from the
measures. They also classified the cableways into three
categories, transport, local or tourism facilities. There are
12 cableways having a general transport purpose (cate-
gory A), 56 cableways for purely local recreational use
(category B) and 9 cableways used for sporting activities
in tourist areas (category C). All of these are small enter-
prises within the meaning of Regulation (EC) No 70/
2001. This classification, however, was carried out ex
post as an illustration, whereas Law No 6/1996 does not
make any distinction between different categories of
cableway.

(60) As regards the future application of the scheme, the
Commission considers it compatible with the common
market until 2007, inasmuch as it is consistent with the
terms of this Decision, in particular recitals 33, 34 and
54 of part V. It also takes note of the commitment to re-
notify the scheme in 2006.

The Bolzano provincial authorities claim that Law No 2/
1991, examined and authorised by the Commission (NN
45/91), replaces and continues Law No 6/1996, which,
according to them simply renews and consolidates the
provincial rules. The Commission does not agree with
this reasoning. A comparison of the two aid schemes
shows that the new law considerably modifies the old
one by allowing for investment aid of up to 90 %,
whereas the old scheme provided for an aid intensity of

(61)

The Commission, however, also needs to assess the
application of the scheme to the 77 individual recipients
referred to in recital 59. The information provided by
the Italian authorities is sufficient for the Commission to
endorse the submitted threefold classification of cable-
ways. Accordingly, both on the question of the presence
of aid and on the question of compatibility, the Commis-
sion's assessment of State aid for the installations varies
according to the recipient, as stated in Part V of this
decision.

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(62)

i.e.
The measures are funded from the State budget,
through State resources. They represent an economic
advantage for the recipient, relieving it of part of the
cost linked to the investment needed for its activity.

General transport cableways (category A)

(63) As regards the distortion of competition and the effect
on trade between Member States, the cableways catering
for the general transport needs of the population operate
in a sector where cross-border trade is present. Among
the recipients classified by the Italian authorities as trans-
port installations, some are located in areas where alter-
native transport would not only be technically and
economically viable but could also be managed by
commercial operators
from other Member States.
Accordingly, State aid to cableways classified as trans-
port
threaten to distort
competition and affect trade between Member States.

installations can distort or

(64)

Similarly, State aid for cableways in tourist areas that are
capable of attracting users who have as alternatives
foreign installations distorts competition and affects
trade between Member States.

(65)

Finally, the cableways described as sporting installations
for purely local use are located in areas with little or no
tourism capacity and a limited number for winter sports
facilities. Users would mainly be residents and would not
normally have, as alternatives, destinations in another
Member State. Given the small number of users, the
service would not be provided in the absence of State
aid. In the last case, therefore, it can be concluded that
State financing does not distort competition or affect
trade between Member States and therefore does not
constitute State aid within the meaning of Article 87(1).

(66) On the basis of

the foregoing considerations,

the
Commission assesses the compatibility of the aid granted
under Law No 6/1996 in the case of the 12 cableways
catering for the general transport needs of the popula-
tion (classified as category A by the provincial authori-
ties) and the nine cableways used for winter sporting
activities in tourist resorts (classified as category C by
the provincial authorities). On the basis of the informa-
tion supplied by Italy, however, the Commission does
not regard the State support to 56 installations identified
as being for local use (category B) as State aid under
Article 87(1).

(67) According to the information provided by the Italian
authorities, the first category of cableways (category A)
operates only as a link between population centres.
transport
Some of
connecting mountain communities with the other inhab-
ited areas in the Province and their social and infrastruc-
ture function is obvious.

the only means of

them are

(68)

(69)

(70)

(71)

for economic or

installation which,

It is generally acknowledged that the funding of a trans-
port
technical
reasons, has no viable alternative does not distort
competition and therefore does not constitute aid under
Article 87(1). However, the Commission considers that
Law No 6/1996 also provides financing to installations
in respect of which there would be other means of trans-
port, at least as an alternative. For these reasons (recital
63), it must decide whether the measures are compatible
with the Treaty.

In any event, in the case of cableways intended predomi-
nantly to satisfy the general transport needs of the popu-
lation, the Commission considers that State aid may be
needed since market forces are unlikely to provide the
necessary investments on a purely commercial basis. Aid
to this sector must therefore be assessed under Article
73.

The development of measures to shift traffic from roads
to other modes of transport is deemed to be in the
interest of the Community and the amounts granted are
necessary to enable the project to be carried out. It is
also considered that aid to such installations does not
distort competition to an extent
contrary to the
common interest.

The Commission therefore concludes, on the basis of the
information from the Italian authorities, that the condi-
tions for exemption under Article 73 are met and that
the aid granted to operators of twelve category A cable-
ways is compatible with the State aid rules of the Treaty.
It also takes note of the commitment to re-notify the
scheme in 2006.

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Cableways for sporting activities (category C)

(77)

(72) According to the information provided by the Italian
authorities, the third category (C) comprises all cable-
ways used for sporting activities in tourist areas. As indi-
cated in recital 64, their funding is caught by the State
it must be
the EC Treaty. Accordingly,
aid rules of
decided whether one of the exemptions in Article 87(2)
and (3) applies in order to find the aid in question
compatible with the common market.

(73)

The aid granted via the measures introduced by Law No
6/1996 is not social in nature, is not granted to indivi-
dual consumers and is not aid to make good the damage
caused by natural disasters or exceptional occurrences. It
is not aid granted to the economy of certain areas of the
Federal Republic of Germany affected by the division of
Germany. Hence Article 87(2) is not applicable.

(74)

Since the aid promotes neither the economic develop-
ment of areas where the standard of living is abnormally
low or where there is serious underemployment nor the
execution of an important project of common European
interest, Article 87(3)(a) and (b) does not apply.

(75) As for the compatibility of the measures under Article
in relation to the development of certain
87(3)(c)
economic activities,
the conditions for applying the
Community guidelines on State aid for rescuing and
restructuring firms in difficulty (12) are not met. The aid
was not notified individually to the Commission and no
restructuring plan was submitted to it. The installations
that benefit from the aid are not necessarily in difficulty
nor is the aid intended to restore the firms' long-term
economic and financial viability. The guidelines require
that measures must be taken to mitigate as far as
possible any adverse effects of the aid on competitors,
something which is not provided for by Law No 6/
1996.

(76)

The Italian authorities, however, point out that all recipi-
ents in this category are small enterprises entitled to
receive aid up to the intensity accepted under
the
Commission Regulation on aid to small and medium-
sized enterprises (13). This amounts to a gross aid inten-
sity of 15 % for investment in tangible and intangible
assets, as defined by Article 2(c) and (d) of the Regula-
tion.

(12) See footnote 7.
(13) See footnote 8.

If the figure of 15 % obtained in this way is added to the
temporary increase in the aid intensity described in
recital 54 (top-up), which for 2002 amounts to 25
percentage points, the accepted gross intensity would be
40 %. The Commission considers that this intensity can
also be accepted for aid granted before 2002.

(78)

Since, according to the information provided by the
the maximum amount granted in
Italian authorities,
category C has been 30 %, which is well below the
authorised ceilings, the Commission concludes that the
aid granted to operators of cableways used for sporting
activities in tourist resorts is compatible with the State
aid rules of the EC Treaty.
It also takes note of the
commitment to re-notify the scheme in 2006.

VIII. CONCLUSION

(79)

The Commission concludes, on the basis of both the
foregoing considerations and the information provided
the measures already
by the Italian authorities,
granted to 77 cableway operators under Law No 6/
1996:

that

(a) do not constitute State aid because of their local
nature, inasmuch as the scheme is applied to firms
in category B, as defined in recital 65;

(b) constitute State aid that is compatible under Article
73 of the EC Treaty,
inasmuch as the scheme is
applicable to firms in category A, as defined in
recital 63;

(c) constitute State aid that is compatible under Article
87(3)(c) of the EC Treaty, inasmuch as the scheme
applies to firms in category C, as defined in recital
64.

(80) As regards the future application of the scheme, the

Commission considers that:

(a) the scheme does not constitute State aid where it is
applied to firms in category B, as defined in recital
65;

(b) the scheme constitutes State aid that is compatible
under Article 73 where it is applied to firms in cate-
gory A, as defined in recital 63;

(c) the scheme constitutes State aid compatible under
Article 87(3)(c) where it is applied to firms in cate-
gory C, as defined in recital 64.

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in
The preceding paragraph is applicable until 2007,
accordance with the considerations set out in this Deci-
sion, in particular recitals 33, 34 and 54 of Part V. The
Commission also takes note of the commitment to re-
notify the scheme in 2006.

(81)

relevant Community legislation,

This Decision is without prejudice to the application of
other
in particular
Directive 2000/9/EC of the European Parliament and of
the Council of 20 March 2000 relating to cableway
installations designed to carry persons (14),

HAS ADOPTED THIS DECISION:

Article 1

The measures implemented by Italy under Law No 6 of 4
March 1996 for cableway installations in the Autonomous
Province of Bolzano:

(a) do not constitute State aid because of their local nature
where the scheme applies to overhead and surface cable-
ways intended for leisure purposes that are of a mainly
local nature or of a social character;

(b) constitute State aid that is compatible under Article 73 of
the EC Treaty and Article 49 of the Agreement on the
European Economic Area where the scheme applies to
overhead cableways constituting transport
infrastructure
that replaces public road services;

(c) constitute State aid that is compatible under Article 87(3)(c)
of the EC Treaty and Article 61(3)(c) of the Agreement on
the European Economic Area where the scheme applies to
overhead and surface cableways serving tourist areas.

Article 2

The scheme may be applied until 31 December 2006 provided
that the following conditions are satisfied:

(a) the scheme does not constitute State aid where it is applied
to sports installations for purely local use that are located
in areas with little or no tourism capacity and with only a
limited infrastructure;

(b) the scheme constitutes State aid that is compatible under
Article 73 of the EC Treaty and Article 49 of the Agree-
ment on the European Economic Area where it is applied
to cableways that meet the general transport needs of the
population;

(c) the scheme constitutes State aid that is compatible under
Article 87(3)(c) of the EC Treaty and Article 61(3)(c) of the
Agreement on the European Economic Area where it is
applied to cableways located in tourist areas capable of
attracting users from other, alternative resorts.

Article 3

This Decision is addressed to the Italian Republic.

Done at Brussels, 9 April 2002.

For the Commission

Mario MONTI

Member of the Commission

(14) OJ L 106, 3.5.2000, p. 21.