State aid — Italy — Commission communication to the Member States and other interested parties concerning State aid N 376/01 — Aid scheme for cableways — Authorisation of State aid under Articles 87 and 88 of the EC Treaty (Proposal to which the Commission has no objection) (Text with EEA relevance)
Date: 2002-07-18
Institutions: European Commission
Subjects: Italy, State aid, cable transport, control of State aid, financing, sports facilities, transport infrastructure

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Commission communication to the Member States and other interested parties concerning State
aid N 376/01 — Aid scheme for cableways

STATE AID — ITALY

Authorisation of State aid under Articles 87 and 88 of the EC Treaty

(Proposal to which the Commission has no objection)

(2002/C 172/02)

(Text with EEA relevance)

By letter of 27 February 2002 the Commission informed Italy
of its decision to raise no objection to the above aid scheme

given of how successful applicants were defined as small
or medium-sized undertakings.

‘I. Procedure

1. By letter of 3 May 2001, the Italian authorities notified the
Commission, under Article 88(3) of the EC Treaty, of the
aid scheme introduced by Article 8 of Law 140/1999, as
amended by Article 145(45) of Law 388/2000, concerning
the fund for the renewal of cableway installations. By letter
of 15 June 2001, the region of Tuscany also provided
information on the same scheme.

5. By fax of 16 November 2001,

the Italian authorities
requested a meeting with the Commission in order to
clarify further
the information provided. The meeting
was held on 21 November. By letter of 14 January 2002
the Italian authorities agreed to postpone the deadline for
the Commission's scrutiny of the case by one month.

It

In particular,

2. By letter of 9 July 2001, the Commission informed Italy
that, after an initial examination, it had found the notifi-
the notification
cation to be incomplete.
indicated that the range of potential beneficiaries of the
aid was very wide.
included cableway installations
designed for transport within cities and winter sports
installations in tourist resorts. As to size, the beneficiaries
undertakings.
could
Accordingly,
the
Italian authorities could classify the potential beneficiaries
into different categories of
transport
installations, sport facilities for local or non-local use) for
the purpose of the assessment.

small, medium or
the Commission wished to know if

installations (e.g.

large

be

3. By letter of 6 August 2001, the Italian authorities asked to
have the deadline for their reply put back to 10 December.
The Commission agreed. By letter of 5 October 2001, the
Italian authorities explained that the evidence provided by
the Region of Tuscany was to be considered as an integral
part of the original notification.

4. By letter of 25 October 2001, part of

selected in the

the additional
information requested on 9 July 2001 was received. The
list of potential beneficiaries
first
competition for access to funding was submitted. The
(i)
applicants had been divided into three categories:
cableway
to transport
installations designed mainly
people and goods as an alternative to other means of
transport;
sports
isolated installations designed for
resorts;
and (iii)
level. An indication was also
sporting activities at local

installations designed for winter

(ii)

6. By letter of 28 January 2002, received on 1 February
2002, the Italian authorities undertook to modify future
procedures for allocating the aid under the scheme so as to
comply with the conditions for compatibility as described
in this decision. They also provided additional information
information
on the scheme.
provided,
the
the Commission informed Italy
two-month period allowed for scrutiny began on the day
following the date the letter was received. By letter of 19
Italian authorities undertook to
the
February 2002,
re-notify the scheme by the end of 2006.

the additional

In view of

that

II. Description of the measure

7. Article 8 of Law 140/99, as amended by Article 145(45)
of Law 388/2000, established a fund for the technical
improvement, modernisation and safety upgrading of
cableway installations in the non-autonomous regions of
Italy.

8. Operators of cableway installations can apply for a
contribution from the fund. The scheme has no time
limit — open competitions for access to the aid will be
intervals. The Regions are responsible for
published at
processing applications. The overall resources of the fund
are distributed among the Regions on the basis of the
applications received. Applications are accepted in the
chronological order in which they are submitted until
available resources are used up. In the first competition
82 projects were selected and were then submitted, by 21
August 1999,
Industry. As the aid
cannot be granted unless it is compatible with EU State
aid rules, none has yet been disbursed.

to the Ministry of

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9. The fund has an initial EUR 5,16 million available for 20
years as of 1999, plus an additional EUR 2,58 million per
year for 15 years as of 2001. Successful applicants may
obtain a yearly contribution of up to 3,5 % of the total
amount of the eligible expenditure for a period of 20
years, provided the investment project
is completed
within two years of the start of works. If the reference/
discount rate of 5,02 % (1)
the gross grant
is applied,
equivalent is 39,3 % of the investment.

the EC Treaty (2), as in this case no
Article 87(1) of
advantage is conferred on an undertaking within the
meaning of Article 87(1), competing with other under-
takings. Most transport infrastructure funding takes the
form of this type of investment, for example a toll-free
public road.

10. The law specifies that the same investments cannot benefit

from any other aid measure.

11. Eligible expenditure is any investment in material for the
technological
safety
innovation, modernisation
upgrading of cableway installations. Investment which is
not exclusively related to the transport function of the
installation — such as the acquisition of snow cannons
or vehicles for the care and preparation of the ski-runs
— is not considered eligible expenditure.

or

12. The Italian authorities have undertaken to bring the
scheme into line with the conditions for compatibility
with the common market as described in this decision in
future competitions for access to funding.

III. General remarks on cableways installations

Existence of State aid

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

threatens

distorts

or

to

14. It is sometimes argued that certain cableway installations,
being transport infrastructures, are not subject to State aid
rules. This reasoning cannot be accepted without qualifi-
cation. State financing of
infrastructure open to all
and
users
potential
managed by the State does not normally fall within

non-discriminatory way

in

a

15. 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 managed by a single operator and
cableway transport can, at least in principle, be an econ-
omically viable activity carried out for profit purposes by
private operators.

In its

judgment

16. Transport operators and any other commercial users of
transport infrastructure meet the definition of an under-
taking within the meaning of Article 87(1). It is clear from
the case law of the Court on the concept of “undertaking”
that the central issue is whether an economic activity is
less
being carried out. The organisational
the
important.
Court of First Instance ruled that the management and
provision of facilities for the supply of services constitute
an economic activity for the purposes of Article 87(1) of
the Treaty. A private or public transport infrastructure
separate from the State administration, will
manager,
always meet
the definition of “undertaking”. From the
point of view of existing or potential competitors any
financial advantage provided to such undertakings may,
in principle, distort competition.

form is
in Case T-128/98 (3)

17. Moreover, not all cableway installations are used for
general mobility needs; many are designed for a specific
economic category of users, i.e. the consumers of a service
which is not
in itself. This is the case of
cableways that mainly service skiers. Those installations
are not providing a general transport service, but rather
the services of a facility for the practice of a sport.

transport

(1) Aid payable in several instalments must be discounted to its value
the time it was granted. The interest rate to be used for
at
discounting purposes is the reference rate applicable at the time
the aid was granted. Accordingly, the discount rate indicated here,
i.e. the one applicable as of 1 January 2002, is valid only for aid
disbursed in 2002. See also Commission notice on technical adap-
tations to the method for setting the reference and discount rates
(OJ C 241, 26.8.1999).

(2) See Commission Decision of 14.9.2000 in Case N 208/2000, SOIT
(NL). See also the Commission White Paper “Fair payment for infra-
structure use: A phased approach to a common transport infra-
structure charging framework in the EU”, COM(1998) 466 final
of 22.7.1998, Chapter 5, paragraph 43, and the Commission
communication “Reinforcing quality in sea ports: A key for
European transport”, COM(2001) 35 final of 13.2.2001, p. 11.

(3) Aéroports de Paris v Commission [2000] ECR II-3929.

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Distortion of
Member States

competition and effect on trade between

the basic condition is that

18. For a measure to constitute State aid within the meaning
of Article 87(1)
it distorts
competition and affects trade between Member States. In
the case of cableway installations, possible distortion of
competition and effect on trade between Member States
has to be assessed with respect to their location, desti-
nation and dimension.

that

19. Cableway installations provide a service only at a certain
location. The service cannot be rendered somewhere else.
This circumstance, however, does not rule out an effect on
trade between Member States.
there might be
and State
operators
funding could afford advantages to the beneficiary or
could discourage other, possibly foreign, operators from
providing an alternative service in loco (4). State funding
may help attract users — e.g. skiers from the same or a
different State — diverting them from other destinations
with cableways, including those in other Member States.

Indeed,
internationally

active

are

20. In assessing these elements,

to draw a
is useful
distinction between cableway installations
supporting
sport activities and cableways designed to satisfy the
general transport needs of the population.

it

23. It can be argued, however, that installations supporting
sport activities in areas with a small number of winter
sports facilities and with limited tourism capability, tend
to have a purely local use and are not capable of attracting
in other
users who have the option of destinations
Member States as an alternative.
In those cases there
would not be any distortion of competition and effect
on trade on the demand side. However, on the supply
side, it would have to be assessed whether the beneficiaries
operated only at local level and whether State support for
this activity harmed or discouraged the supply in loco of
other facilities by operators of other Member States. The
latter circumstance would seem rather remote in cases
where the number of local users is limited; the service
might not be economically viable and State funding
might be the only way of providing it.

24. Accordingly, State

for

support

cableway installations
designed 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 purely local users where State
funding would not distort competition and affect trade
between Member States and therefore would not constitute
State aid within the meaning of Article 87(1).

Cableway installations supporting sports activities

21. The number, price and quality of cableways designed for
sports activities can influence the choice of customers who
may opt for other cableways in other Member States as an
alternative. Cableways affect all users in a similar way and
can be readily compared across different resorts. Ski passes
form a significant part of the total cost of a winter holiday
and are often included in package holidays sold by inter-
national operators. The funding of cableways in mountain
resorts does, therefore, have an impact on the provision of
sports, which is an international
services
intra-Community
business
trade and strong competition.

for winter
featuring a high degree of

22. In addition, there are examples of companies that operate
cableways in resorts in different Member States. State
funding affords advantages that could be exploited in a
market where there is cross-border competition also in
the supply of the service.

(4) An alternative service might also be provided via means other than

cableways.

Cableway installations meeting general transport needs

25. Cableways that are mainly designed to meet the general
transport needs of the public would normally not influence
the choice of users that might have the option of desti-
nations in other Member States as an alternative. However,
State support could benefit an operator active inter-
nationally or negatively 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 beneficiary is active only locally and an
alternative transport activity would not be economically or
technically viable:
in those circumstances the measure
would not distort competition and affect trade between
Member States. In other cases, the transport activity —
by cableway or other means — is technically or econ-
omically viable and capable of attracting commercial
operators who carry out an economic activity within the
meaning of Article 87(1) of the Treaty. In view of the
progressive liberalisation of the transport sector, the possi-
bility of this transport being provided by operators of
other Member States is not
In those
latter cases the measures would distort or threaten to
distort competition and affect
trade between Member
States and therefore constitute State aid within the
meaning of Article 87(1).

to be excluded.

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Conclusions

26. To summarise, an installation supporting an activity
capable of attracting non-local users will generally be
considered to have an effect on trade between Member
States. This however, might not be the case for sport-
in areas with few facilities and
related installations
limited tourism capability. However,
installations mainly
catering for the general mobility needs of the population
would have an effect on intra-Community trade only if
there were cross-border competition in the supply of the
transport service.

Criteria for distinction

27. In drawing a distinction between these types of instal-
lations the following factors should typically be taken
into account:

— the location of the installation (e.g. within cities or

linking villages),

— its operating time (e.g. seasonal rather than year-round;

during daylight hours or longer),

in excess of or at better conditions than those that a
private investor would provide in the same circumstances
constitute State aid, which has to be notified under Article
88(3). This would concern all
economic
loans and guar-
assistance,
antees.

including capital

injections,

forms of

31. Once the presence of State aid has been established, the
Commission must examine whether the aid in question is
compatible with the common market by virtue of one of
the exemption clauses contained in Article 87(2) and (3) of
the Treaty. These considerations are without prejudice to
the de-minimis rule as explained in the
application of
relevant Commission Regulation (7).

32. A specific State aid approach is needed in the transport
required to intervene to
sector because the State is
guarantee
and
transport
environmental needs. Article 73 of the Treaty provides
for an exemption to cover these concerns.

services which meet

social

— predominantly local users (number of daily as opposed

to weekly passes),

— the total number and capacity of

installations with

respect to the number of resident users,

33. Finally, under Article 86(2) of the Treaty, undertakings
services of general
entrusted with the operation of
economic interest can be excluded from application of
competition rules, where
the
performance,
in law or in fact, of the particular tasks
assigned to them.

this would obstruct

— the presence of other tourism-related facilities in the

area.

Article 87

28. An aid scheme addressed to a specific type of installation
or granting benefits which vary according to different
types of installation should set out objective criteria on
the basis of which the categories of beneficiary are estab-
lished.

Compatibility of aid for cableway installations

29. Wherever cableway installations are beneficiaries (5) of
threaten to distort
State resources which distort or
competition and affect trade between Member States, the
funding would come under the State aid rules of the EC
Treaty. The aid has to be notified in line with Article 88(3)
of the Treaty and the procedural Regulation (6). Also, the
general rules on compatibility apply.

30. This is also true for installations that are established or
in which case the general
managed by public entities,
principle that funding by the State has to be provided
according to the Market Economy Investor Principle
(MEIP) continues to apply. In other words, public funds

(5) Naturally,

if cableways are beneficiaries of a measure of general
nature this would not qualify as State aid because there is no
selectivity.

34. While the conditions for application of the exemption
clauses provided for in Article 87(2)(b)
(“aid to make
good the damage caused by natural disasters or excep-
tional occurrences”) and (c) (“aid granted to the economy
the Federal Republic of Germany
of certain areas of
affected by the division of Germany”) obviously have to
be assessed on a case-by-case basis, the derogation under
Article 87(2)(a) (“aid having a social character, granted to
individual consumers”) does not appear to be relevant in
the case of aid to cableway operators.

(“aid to promote

35. The application of Article 87(3)(d) (“aid to promote culture
to the case of cableways
and heritage conservation”)
in normal circumstances, be excluded, while the
would,
relevance of Article 87(3)(a)
the
economic development of areas where the standard of
living is abnormally low or where there is serious under-
employment”) and Article 87(3)(b) (“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”) need to be assessed on a case-by-case
basis. This assessment should not deviate from the normal
rules that are established for all economic activities.

(6) Council Regulation (EC) No 659/1999 of 22 March 1999 laying
down detailed rules for the application of Article 93 of the EC
Treaty (OJ L 83, 27.3.1999, p. 1).

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

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36. Under Article 87(3)(c), State aid may be found 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
those requirements for exemptions were deemed to be
in view of the lesser mobility of skiers. It is now
met,
considered that
for winter
sports has reached such a level of economic development
and cross-border competition, that departure from the set
of rules established for the generality of economic activities
would no longer be justified; see however the points made
in points 44 to 49 below.

the provision of

services

37. Aid to cableways might — depending on the particular
case — be found compatible under the rules governing
investment aid, or aid to SMEs or restructuring
regional
aid to restore the viability of a company (8). Generally
it cannot be assumed that such aid
speaking, however,
would not
to an
extent contrary to the common interest” since it would
have the effect of improving the competitiveness of the
beneficiaries in a sector where international competition is
strong.

trading conditions

“adversely affect

Article 73

involves

38. In contrast to Article 87(3)(c), the notion of coordination
in Article 73 involves more than facilitating the devel-
opment of an industry;
form of
it
planning by the State. In a liberalised market, coordination
may be achieved by the market itself as the free interplay
failures.
of market
Accordingly, the concept of aid meeting the needs of coor-
dination of transport refers to the need for government
intervention arising in the absence of competitive markets
or in the presence of market failures.

forces is not hampered by market

some

— access to the aid is granted on non-discriminatory

terms,

— the aid does not give rise to distortion of competition

to an extent contrary to the common interest.

Article 86(2)

40. While the financing of

transport cableways, where it
constitutes State aid, would normally be assessed under
Article 73,
the derogation
is not clear whether
provided for by Article 86(2) can apply to other types
of installation.

it

41. In general, cableway installations that support a sporting
activity do not provide a service of general economic
financing cannot be justified under
interest and their
Article 86(2) of the Treaty. They do not satisfy general
and basic needs of
the population, but are aimed at
making profits from winter sports. The actual price level
of user fees shows that this service is not a basic good.

42. Clearly it is in principle up to the Member States to define
which services they consider to be of general economic
interest. However,
services of general
the notion of
economic interest 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.

39. According

the

three
to
the
requirements must be met
needs of coordination of transport within the meaning
of Article 73 of the EC Treaty (9):

Commission's
if

the aid is to meet

practice,

43. These

still

apply

even where

considerations

to a concession which obliges

the
construction and operation of cableway installations is
subject
the company
actually to operate the installation and to transport all
users at the current rates. It is quite usual for a number
of professions and activities to be subject to a special
In this respect the
permit and to certain requirements.
situation
differ
not
does
operators
substantially from that of companies in other sectors and
does not mean that it should be assessed under Article
86(2).

cableway

of

— State contribution towards

the
project is necessary to enable the realisation of the
project or activity in the interest of the Community,

financing of

total

(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
difficulty (OJ C 288, 9.10.1999). Guidelines on national regional
aid (OJ C 74, 10.3.1998, p. 9).

(9) See Commission proposal

the European
Parliament and of the Council concerning the granting of aid for
the coordination of transport by rail, road and inland waterway,
COM(2000) 5 final of 26.7.2000.

for a regulation of

Transitional period

role

44. The Commission considers that State aid to cableways
in assisting balanced
could play an important
In particular, with
economic development of an area.
regard to mountain regions, State aid has in the past
the few possible
allowed the development of one of
local
effects on
employment and ultimately on the stability of the local
population and care of the land.

activities, with beneficial

economic

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45. 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 comes to maturity there
is a greater risk of outbidding between different areas of
the Community. For these reasons the Commission's policy
in future in the sector needs to be more clearly defined,
strictly interpreted and uniformly applied.

46. The Commission recognises that undertakings in the sector
have largely benefited in the past from several 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 setting
stricter limits to compatibility would probably lead to an
adjustment of the price of the various services offered for
winter sports, with prices for the use of cableway instal-
lations possibly increasing to compensate for the reduction
in subsidies. This change cannot be too abrupt and the
rules must be applied gradually.

47. Accordingly, the Commission identifies a transition period
of five years — from 1 January 2002 to 31 December
2006 — during which higher aid intensities would
temporarily be accepted for State aid to cableway instal-
lations. Aid granted before the described period will be
assessed on a case-by-case basis without
reference to
thresholds for compatibility fixed a priori.

48. During the transition period, the Commission will assess
aid projects
sector by
in the cableway installations
referring to the normal set of rules as clarified, inter alia,
in the Commission Regulation on State aid to small and
in the Guidelines on State aid
medium-sized enterprises,
for rescuing and restructuring firms in difficulty and in the
guidelines on national regional aid (10). However,
it will
accept
aid intensity
otherwise justified under
the existing legislation and
guidelines, quantified as below:

temporary

increase

in the

a

— 10 additional percentage points for aid granted in the

year 2005,

— 5 additional percentage points for aid granted in the

year 2006 (11).

From 2007 onwards, aid not eligible for any of
the
derogations provided for by the Treaty and the various
existing exemption regulations and frameworks will be
declared incompatible. The analysis set out in points 13
to 28 and in particular the explanations given in point 23
will still apply.

49. On the basis of

the

information available

to the
Commission, the figures indicated, chosen as temporary
top-up on aid ceilings, and the five-year duration of the
transition period, seem to balance, on the one hand, the
need to allow sufficient time for different areas to benefit
from the temporary rules and for beneficiaries to adjust to
the new approach, and, on the other hand, the need to
bring the treatment of this sector in line with that of other
economic activities within a reasonable period of time.

Related activities

It

for

the basic installation for skiing.

50. When the cableway infrastructure in question is mainly for
it can be described as providing the
servicing skiers,
is not
service of
unusual
the undertaking concerned also to offer
other directly related services which are equally indis-
pensable for skiing, such as the care of the 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 snow compactor vehicles as well as the initial costs of
preparing the ski-runs. However,
investment that is not
functional to providing the service of the basic installation,
such as investment in skiing equipment for hire or in
facilities for ski-schools, cannot be eligible for aid under
the above conditions.

— 25 additional percentage points for aid granted in the

year 2002,

— 20 additional percentage points for aid granted in the

year 2003,

— 15 additional percentage points for aid granted in the

year 2004,

(10) See footnote 8.

IV. Assessment of the measures introduced by Law 140/99

51. The aid scheme introduced under Law 140/99 has no time
limit — open competitions for access to State funding will
be published at
intervals. A list of 82 potential bene-
ficiaries has already been drawn up in the first of these
open competitions. The Italian authorities have provided a

(11) Aid that is disbursed in instalments to the beneficiary will be
assessed as a whole with reference to the intensity that can be
In the case of schemes that
accepted at the time of granting.
grant aid at different points in time,
the reference is the aid
intensity at the time of granting. In other words, if the same aid
scheme grants aid in 2003 and in 2004, the accepted aid intensity,
all else being equal, would be 5 percentage points lower for the aid
granted in 2004.

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breakdown dividing the first 82 successful applicants to
the scheme into three categories: transport installations,
sport installations in tourist resorts and sport installations
for purely local use. This, however, was done ex-post for
description purposes. Law 140/99 does not make any
distinction between installations and applies the same
procedure in all cases.

under

Law 140/99,

52. As regards future application of the scheme, the Italian
authorities have formally undertaken to revise the terms
and conditions of future competitions for access to the
assistance
the
requirements for compatibility with the common market
laid down in this decision. They have also promised to
re-notify
the
Commission considers future application of the scheme
up to the year 2006 to be compatible with the common
market, provided it is consistent with the requirements laid
down in this decision, in particular in Part III, points 27,
28 and 48.

2006. Accordingly,

line with

scheme

the

in

in

In this

referred to above.

53. The Commission, however, also needs to assess the first
application of the scheme in the case of the 82 individual
beneficiaries
the
Commission considers that the information provided by
the Italian authorities is sufficient to allow it to endorse
their classification of cableways into the three categories
mentioned above. Accordingly, both on the question of aid
and on the question of compatibility, the Commission's
assessment of State aid to those installations varies
according to the nature of the beneficiaries, in line with
the considerations set out in Part III of this decision.

regard,

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

55. On the issue of the distortion of competition and effect on
trade between Member States, the Commission takes the
view that State support to installations in tourist resorts
which are capable of attracting users who have foreign
destinations as an alternative, distorts competition and
affects trade between Member States.

Italian authorities

identified by the

56. Similarly, cableway installations catering for the general
mobility needs of the population are deemed to operate
in a sector where there is cross-border trade. Among the
beneficiaries
as
transport
installations, some are located in areas (e.g.
Naples) where alternative transport means would be
technically and economically viable and capable of being
provided by commercial operators of other Member States.
Accordingly, State funding to cableways belonging to the
category of transport installations is also considered to
distort competition and affect
trade between Member
States.

57. Finally, the cableways identified as sport installations for
purely local use are located in areas with little or no
tourism capability and a limited number of winter sports
facilities. Users would mainly be residents and typically
would not have a destination in another Member State
as an alternative. Because of the small number of users,
the service would not be provided in the absence of State
support. It can then be accepted that in this latter case,
State financing does not distort competition and affect
trade between Member States and therefore does not
constitute State aid within the meaning of Article 87(1)
of the EC Treaty.

58. On the basis of the above considerations, the Commission
will assess the compatibility of the aid planned in the first
application of Law 140/99 in the case of 17 sport instal-
lations for the practice of winter sports in tourist resorts
and of 23 installations catering for the general mobility
needs of the population. On the basis of the information
supplied by Italy, it does not regard the State aid to the 42
installations identified as local by the Italian authorities as
State aid within the meaning of Article 87(1) of the Treaty.

Cableway installations for sporting activity in tourist resorts

59. The measures introduced under Law 140/99 do not fall
within the cases provided for in Article 87(2), nor do they
meet the conditions laid down in Article 87(3)(b),(d) or (e).
Moreover,
the measures are not specifically directed at
promoting “the economic development of areas where
the standard of living is abnormally low or where there
required by Article
is
87(3)(a),
all
distinction
non-autonomous regions of Italy, some of which are econ-
omically prosperous.

serious underemployment” as
apply without

but

to

60. The Commission also notes that the aid covers most of the
country, across areas with dissimilar economic conditions,
so that a general compatibility assessment would not be
possible under Article 87(3)(c), as far as the development
of certain regions is concerned.

61. As for compatibility under Article 87(3)(c) in relation to
the development of
the
conditions for applying the Community Guidelines on
in
State
difficulty (12) are not met. The aid was not notified indi-
vidually to the Commission and no restructuring plan was

and restructuring

certain economic

activities,

aid for

rescuing

firms

(12) OJ C 288, 9.10.1999.

18.7.2002

EN

Official Journal of the European Communities

C 172/9

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 viability. The guidelines
require that measures must be taken to mitigate as far as
possible any adverse effects of the aid on competitors,
which is not provided for in Law 140/99.

62. The Italian authorities point out, however,

aid up to the

that all the
beneficiaries in this category are small firms entitled to
intensity laid down in the
receive
Commission Regulation on aid to small and medium-sized
enterprises (13). This amounts to a gross aid intensity of
15 % for investment in tangible and intangible assets as
defined by Article 2(c) and (d) of the Regulation.

63. After adding to the 15 % figure so determined the
temporary increase in the aid intensity as explained in
point 48 — equal to 25 percentage points in the year
2002 — the permitted gross aid intensity aid would be
40 %, which is the maximum theoretical amount of aid
granted by Law 140/99.

for

the purchase of

64. It should be pointed out that under Law 140/99 expen-
snow-cannons or
snow
diture
compactor vehicles or
the initial costs of preparing
ski-runs is not considered an investment eligible for the
aid. According to the Commission's assessment, such
investments, which operators frequently have to make,
would also be eligible for aid. Accordingly,
in many
cases the overall
investment in the skiing facility would
in fact receive a smaller amount of aid.

65. The Commission therefore concludes that aid planned for
2002, within the framework of Law 140/99, to operators
of cableways servicing a sporting activity in tourist resorts
is compatible under the State aid rules of the Treaty (14).

66. As

for

the

the

future

application of

the
Commission takes account of the Member State's formal
commitment to reduce aid intensities to bring them into
line with the compatibility requirements set out in Part III
of this decision. The Commission also takes note of Italy's
commitment to re-notify the scheme by the end of 2006.

scheme,

(13) See footnote 8.
(14) This decision is without prejudice to the application of other
the Commission
relevant Community legislation.
their obligations under
reminds
the
Directive 2000/9/EC of
the
Council of 20 March 2000 relating to cableway installations
designed to carry persons (OJ L 106, 3.5.2000, p. 21).

the European Parliament and of

Italian authorities of

In particular,

Cableway installations for general transport purposes

67. The Commission accepts that the funding of a transport
installation which, for economic or technical reasons, has
no viable alternative would not distort competition and
therefore not constitute aid within the meaning of
Article 87(1). However, no such case was pointed out to
the Commission.

68. In any event, in the case of cableway installations designed
mainly to satisfy the general transport needs of the popu-
lation, the Commission considers that there may be a need
for State intervention, since markets forces are unlikely to
provide the necessary investments on a pure commercial
basis. Therefore, aid to the sector has to be assessed under
Article 73 of the Treaty.

69. The amount of aid — a grant equivalent before taxes of
around 40 % of the investment — represents an amount
which would seem both necessary and proportionate to
enable the project to be carried out. Similar aid intensities
are normally considered acceptable
field of
transport (15).

in the

70. Moreover, the Commission considers that the development
of activities which shift traffic from road to other modes of
transport is in the interest of the Community. Also, where
installations are located in mountain regions, the fact that
they encourage a stable local population and care of the
is
land is also in the common interest. Finally,
considered that aid to these installations does not give
rise to a distortion of competition to an extent contrary
to the common interest. The Commission therefore
concludes that the conditions for granting the exemption
under Article 73 are met and that aid granted within the
framework of Law 140/99 to operators of cableways
catering for the general mobility needs of the resident
population is compatible with the State aid rules of the
Treaty (16).

it

71. The Commission also takes note of the commitment to

re-notify the scheme by the end of 2006.

V. Decision

72. The Commission has accordingly decided to consider the

aid to be compatible with the common market.’

(15) Commission Decision of 31 January 2001, N 597/2000, NL —
Subsidy scheme for private industrial links with inland waterways
(SBV); Commission Decision of 14 September 2001, N 208/2000,
NL — Subsidy scheme for public inland terminals
(SOIT);
Commission Decision of 15 November 2000, N 755/1999,
IT-Bolzano.
(16) See footnote 14.