2005/401/EC: Commission Decision of 8 September 2004 on the measure relating to the Bioscope theme park implemented by France for ‘SMVP — Mise en valeur du patrimoine culturel’(notified under document number C(2004) 2686)   (Text with EEA relevance)
Date: 2004-09-08
Institutions: European Commission
Subjects: France, State aid, control of State aid, leisure park

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COMMISSION

COMMISSION DECISION

of 8 September 2004
on the measure relating to the Bioscope theme park implemented by France for ‘SMVP — Mise en
valeur du patrimoine culturel’

(notified under document number C(2004) 2686)

(Only the French text is authentic)

(Text with EEA relevance)

(2005/401/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 called on interested parties to submit their comments
to that provision (1) and having regard to their
pursuant
comments,

Whereas:

I. PROCEDURE

(1)

(2)

By letter of 27 March 2001, registered as received on
to the Commission
28 March, a complaint was sent
the Bioscope theme
regarding possible State aid for
park (hereinafter Bioscope)
France. The
also referred to the Écomusée d’Alsace,
complaint
which was
subject of a separate Commission
Decision dated 21 January 2003 (2) and is therefore not
concerned by this Decision.

in Alsace,

the

information
registered as

The Commission asked France to provide information on
the measure in question by letters dated 30 March 2001,
31 July 2001, 14 December 2001, 16 July 2002,
17 October 2002 and 3 December 2002. France
provided
dated
this
letters
24 July 2001,
received on 26 July,
28 November 2001, registered as received the same
day, 2 June 2002, registered by the Commission the
same day, 25 June 2002, registered as received the
same day, 8 July 2002,
received on
9 July, 21 October 2002, registered as received on
22 October,
registered as
and 7 February 2003,
received on 10 February.

registered as

by

(3)

(4)

(5)

(6)

(7)

(8)

(9)

By letter of 29 October 2003, the Commission informed
France that it had decided to initiate the procedure laid
down in Article 88(2) of the EC Treaty in respect of
these measures.

The Commission decision to initiate the procedure was
published in the Official Journal of the European Union (3).
It called on interested parties to submit their comments
on the measure in question.

By letter of 26 January 2004, registered as received the
same day, France sent its comments to the Commission.

By letter of 19 February 2004, registered as received the
same day, the German Federation of Theme Parks and
Leisure Companies (Verband Deutscher Freizeitparks und
Freizeitunternehmen e.V., hereinafter VDFU)
the
Commission comments on the aid in question.

sent

By letter of 24 February 2004, registered as received on
the company ‘SMVP — Valorisation et
25 February,
animation du Patrimoine culturel’
(hereinafter SMVP)
sent the Commission comments on the aid.

the
By letters dated 26 and 27 February 2004,
Commission sent France copies of the comments made
by the VDFU and SMVP.

By letter of 26 March 2004, registered as received the
same day, France sent the Commission its observations
on the comments made by the VDFU and SMVP.

(10)

By letter of 25 August 2004, registered as received on
31 August, France provided further information on the
measure.

(1) OJ C 20, 24.1.2004, p. 6.
(2) OJ C 97, 24.4.2003, p. 10.

(3) See footnote 1.

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II. DESCRIPTION

1. The Bioscope theme park project

The Bioscope theme park project was launched in 1994
by the region of Alsace. The aim was to construct a
scientific, educational and fun theme park focusing on
health, life and the environment.

operate the park satisfactorily, Symbio opted for Parc
Astérix, which has since become a part of the Grévin
et Compagnie group. This was confirmed on 13 March
2001 with the signing of a public-service delegation
contract for ‘the design, construction and management
of the Bioscope theme park’ between Symbio, on the one
hand, and SMVP, a subsidiary of Parc Astérix, on the
other.

The Alsatian regional authorities’ idea was that the park
should allow visitors to learn while enjoying themselves.
It should distance itself from the traditional approach of
more conventional scientific and technical museums such
as the ‘Palais de la découverte’ or the ‘Cité des sciences’ in
Paris, which were not considered attractive enough fully
their original objective. Visitors should see
to meet
Bioscope
relaxation and
a place of
above
enjoyment which would, at the same time, also enable
them to learn at their own pace.

all

as

(13)

the regional authorities point out

In addition,
that
Bioscope also aims to increase the number of tourist
attractions in Alsace, something which is not incom-
patible with the objective mentioned above.

2. Selection of the beneficiary

By order of 12 January 1998, the Regional Council of
Alsace and the Departmental Councils of Haut-Rhin and
Bas-Rhin set up the mixed consortium Symbio (Symbio)
with a view to implementing the necessary procedures
for the construction of Bioscope.

the

The regional authorities chose to operate Bioscope in
accordance with the legal principle of public-service dele-
gation (4). The State finances the acquisition of land and
some of
the
construction and operation of
the park to a conces-
sionaire for 30 years, with the concessionaire paying
the State compensation in the form of a charge levied
on its turnover. At
the
the end of
property is returned to the State.

the concession,

investment

delegates

costs.

It

(18) An amendment to the contract was signed on 9 July
2002. The contract as amended is referred to below as
the ‘concession’.

3. The project
competitive
tendering procedure — Participation by the State (6)

from the

resulting

(19)

The concession envisages a small park corresponding to
an initial investment of EUR 61,5 million and with an
initial
target of 400 000 visitors per year, eventually
rising to 800 000.

(20)

The arrangements for participation by the State are laid
down in the concession.

(21)

The following points in particular are set out:

— the State makes available to SMVP, in tranches and
for 30 years, the necessary land, i.e. 50 hectares. This
land remains the property of the State and will be
returned free of charge at the end of the concession.
The buildings, works and concessions acquired, fitted
out, built and set up by SMVP during the concession,
which are its property and are linked to the operation
of the park, will be returned free of charge to the
State at the end of the concession if they have been
fully written off. Otherwise, the State will have to pay
an allowance
remaining
accounting value for them to be returned,

corresponding

to the

(11)

(12)

(14)

(15)

(16)

In order to select a concessionaire for Bioscope, Symbio
published an invitation to tender for private operators in
in
the Official
September 1998.

the European Communities (5)

Journal of

— SMVP designs the Bioscope theme park under State
control before constructing it and operating it for 30
years,

(17) After a lengthy selection procedure aimed at finding an
operator with the necessary experience to construct and

(4) The public-service delegation procedure is subject to the rules set out
in Article L.1411-1 et seq. of the General local and regional autho-
rities code.

(5) OJ S 168, 1.9.1998, 113001.

— the park built by SMVP represents an investment with
an initial tranche of EUR 61,5 million. The State is
the only investor in this first tranche, with a partici-
pation of EUR 30,5 million, through Symbio,

(6) The ‘State’ hereinafter refers to the local and regional authorities of

Alsace, Haut-Rhin and Bas-Rhin.

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— the subsequent investments in the park’s renovation
are entirely the financial responsibility of SMVP. The
plans must be approved by the State, which checks in
particular whether they are consistent with the park’s
educational concept,

respect, the Commission doubted whether the conditions
necessary for potential aid to be authorised under either
set of provisions had been met.

— SMVP pays an annual charge to the State representing
2,5 % of its annual gross turnover earned from all the
activities carried out within the geographical bounds
of the concession (except for the first two calendar
years, even if not full operating years, for which the
less any other
charge is 1 and 2 % respectively),
charges
State on subcontracted
activities.

levied by

the

III. REASONS FOR INITIATING THE PROCEDURE

(22)

In the correspondence preceding the initiation of the
formal investigation procedure, France pointed out that,
in its view, the public authorities’ intervention in this case
was compensation for obligations linked to a task of
general economic interest entrusted to the concessionaire
responsible for operating Bioscope.

(23) When initiating the formal investigation procedure, the
Commission expressed the following doubts regarding
the French State’s assistance for Bioscope and the justifi-
cation given by France at the time.

(27)

(28)

IV. COMMENTS FROM FRANCE ON THE INITIATION OF
THE FORMAL INVESTIGATION PROCEDURE

1. On the nature of State assistance for Bioscope as
compensation for the obligation to provide a service
of general economic interest

In its comments on the initiation of the formal investi-
gation procedure, France restates its position that State
assistance for the Bioscope project does not constitute
State aid within the meaning of Article 87(1) of the
Treaty, but rather compensation for the costs associated
with an obligation to provide a service of general
economic interest.

To back up this position, France begins by reminding the
Commission of how the idea for Bioscope came about
and then gives a practical description of the park project
as drawn up by Symbio in conjunction with SMVP. This
description emphasises the educational nature of the park
and its attractions which are very different
from the
attractions
theme parks. France
found in traditional
stresses that the concept of the park would, under no
circumstances, alter in the future since any change in its
educational
the
agreement between the concessionaire and the State.

vocation would be

in breach of

(24)

(25)

(26)

Firstly, the Commission felt that there were doubts as to
whether France’s reasoning that the beneficiary company
had been entrusted with a task of general economic
importance could be followed.
It doubted whether
France had clearly defined that task. Even if it had, the
Commission doubted whether France had provided
sufficient justification for the absence of overcompen-
sation for the extra costs associated with that task.

Secondly, the Commission felt that the State’s support
probably constituted aid, particularly as no evidence
had been provided to show that
the beneficiary
company would receive from the State a payment corre-
sponding to the market price for operating a theme park.

(29)

France then points out what,
general
economic
comprises.

interest

in its view, the task of
Bioscope
to
entrusted

(30)

from the

France considers that the task was unambiguously spelt
out in the concession linking SMVP to the State. It backs
this up with extracts
concession which
emphasise generally the social and educational aims of
Bioscope and with other extracts dealing more speci-
fically with the prices to be charged for certain categories
of visitor (children accompanied by their parents, school
groups, elderly people). France also emphasises
that
Symbio will always have control over the activities of
the concessionaire.

Thirdly, the Commission assessed the compatibility of
the potential aid in the light of the various provisions
of the EC Treaty. It concluded that, given its aims, the
potential aid could be considered only in the light of the
provisions concerning regional aid or of Article 87(3)(d)
of the EC Treaty concerning the promotion of culture. In
the absence of any justification from France in this

(31)

France examines individually, the criteria laid down by
the European Court of Justice in Altmark (7) for assessing
public support in the form of compensation for costs
associated with a task of general economic interest.

(7) Case C-280/00 Altmark Trans GmbH and Regierungspräsidium
Magdeburg v Nahverkehrsgesellschaft Altmark GmbH, and Oberbundes-
anwalt beim Bundesverwaltungsgericht, [2003] ECR I-7747.

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(32) While highlighting the fact

that
responsible for being unaware of
provision was made
since
for State
judgment was delivered well after the signing of
concession, France points out that:

it cannot be held
these criteria when
the
support
the

— the public service obligations are clearly defined since
the operation as a whole is a service of general
economic interest,

(36)

— the parameters on which the calculation of compen-
sation is based were clearly defined beforehand since
they were laid down before the concession was
granted and since their very principle and nature
were determined before the competitive tendering
procedure was launched,

over more than a few hundred kilometres. The only
other leisure park in the area, Europa-Park in Rust,
could not be considered to be in competition with
Bioscope due to the difference in size between the two
parks and their fundamentally different concepts.

France points out that, more generally, there can be no
in so far as Bioscope
effect on competition since,
exercises a commercial activity,
the relevant product
market is confined to itself or, at the very least, to a
quite small number of distant locations. It claims that
very few tourist products could replace that offered by
Bioscope.
It emphasises the many differences between
Bioscope, on the one hand, and the EuroDisney and
Europa-Park leisure parks, on the other. It mentions the
Spanish park Terra Mítica, whose concept is closer to
Bioscope’s, but points out that,
in practice, visitors are
highly unlikely to have to decide between two parks
thousands of kilometres away from each other.

— the compensation does not exceed that which is
necessary to cover the costs involved in performing
a task of general economic interest, as a study carried
out by independent experts, Rise Conseil, has shown
that the return on SMVP’s investment in the Bioscope
project
[10-15 %]*
[5-10 %] (*)
depending on the calculation assumptions) would
be comparable to or lower than the usual rates of
return in the theme-park sector (between 11 and
15 % for a sample of profitable theme parks) (8).

(between

and

2. On the existence of State aid

(33)

takes

authorities’
France
assistance for Bioscope does not constitute State aid
within the meaning of Article 87(1) of the Treaty.

the view that

the public

(34) As a preliminary observation, France considers

that
Bioscope does not exercise an economic activity. Rather
than a theme park, Bioscope should be considered as an
alternative form of museum. Like a museum, school or
hospital, Bioscope is the embodiment of the determi-
nation to serve the public in Alsace.

(35)

trade between Member States.

Furthermore, France considers that Bioscope's existence
It does
will not affect
not deny that the Bioscope project specifically aims to
attract visitors from other countries, and especially its
very close neighbour, Germany. It points out, however,
that the theme park’s catchment area does not extend

(*) Parts of this text have been edited to ensure that confidential infor-
mation is not disclosed; those parts are enclosed in square brackets
and marked with an asterisk.

(8) France claims that this finding simultaneously satisfies the last two

of the four conditions established in the Altmark judgment.

(37)

Lastly, France considers that
the public assistance for
Bioscope confers no advantage on SMVP or its parent
company, Grévin et Compagnie. It bases its reasoning on
the existence of a competitive tendering procedure
which,
it claims, ensured that a bid was accepted that
reflected market conditions and on a detailed economic
analysis by the independent experts Rise Conseil showing
that the return on SMVP’s investment in the Bioscope
project would be comparable to or
than the
lower
usual rates of return in the theme park sector.

3. On the compatibility of potential State aid with
the Treaty

(38)

France points out that, if the public authorities’ assistance
for the Bioscope project were to be considered State aid
within the meaning of Article 87(1) of the Treaty, this
aid would, in any case, be compatible with the common
market.

(39)

Firstly, France notes that the aid could be considered
compatible with the Treaty by virtue of the derogation
provided for in Article 87(3)(c).

(40)

It claims that the aid meets the conditions laid down in
the Guidelines on national regional aid (9) (hereinafter the
regional guidelines).

(9) OJ C 74, 10.3.1998, p. 9. Amended guidelines (OJ C 258, 9.9.2000,

p. 5).

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(41)

The Commission’s unfavourable view, as expressed in the
regional guidelines, of individual ad hoc aid not covered
by a Commission-approved scheme would not be
applicable to Bioscope, which was not covered by a
the
sectoral policy. France also provides a list of
positive effects of the aid on the region of Alsace. It
recalls
the decision to set up Bioscope in an
assisted area was a deliberate one and was even criticised
internally by those who would have preferred the project
to be set up closer to the regional capital.

that

(42)

France also claims that the aid satisfies all other criteria
laid down by the regional guidelines, and in particular aid
intensity, which the Rise Conseil apparently shows to be
considerably lower than the level admissible in the area
in question.

(43)

Secondly, France points out
the aid could be
considered compatible with the Treaty by virtue of the
derogation provided for in Article 87(3)(d).

that

(44) According to France, the terms ‘culture’ and ‘heritage’
mentioned in that Article should be broadly interpreted
to include scientific culture and the promotion of health,
an essential part of human heritage.
In this respect,
France mentions a whole range of activities proposed
by Bioscope and allowing visitors
to broaden their
scientific knowledge as regards the environment and
health and, more generally, to improve their well-being.

V. COMMENTS FROM INTERESTED PARTIES

1. Comments made by the VDFU

this

type

(45) As an introductory remark, the VDFU points out that the
theme park sector is made up mainly of small and
medium-sized enterprises which, as such, need special
protection against distortions of competition. Enterprises
of
in Germany have had to undertake
investment with no State aid and at considerable risk.
Some of them have now been taken over by Grévin et
Compagnie. State aid which distorts competition is parti-
cularly harmful in this sector inasmuch as it would lead
to a drop-off in the peak numbers of visitors at non-
subsidised parks, while these peak periods are precisely
what parks need to become profitable.

a private operator would have
investment, while
required a larger share of
is
that SMVP receives a return in excess of the normal
market return. The concession also allows SMVP to
synergies with its parent
benefit
company’s other parks.

the profits. The upshot

from important

(48)

The VDFU also contests France’s view that the aid ranks
as compensation for a task of general economic interest.
It considers that none of the Altmark criteria are met in
this case.

(49)

the

the definition of

sufficiently precise manner

The VDFU claims that
the task of
general economic interest entrusted to Bioscope is in
no way precise enough to meet the Court’s requirements
in this matter. It in no way questions the French public
authorities’ laudable aim of teaching through enjoyment,
but it considers that this aim does not, in itself, define in
a
task of general
economic interest entrusted to Bioscope. This would
have required a detailed description of the means to be
implemented in order to carry out this public service task
that no alteration
a guarantee
and,
conflicting with the aim of public service would subse-
quently be made to the park. The VDFU also points out
that theme parks, even those financed entirely out of
private funds, very often include attractions of an educa-
tional nature. The best example was Europa Park, which
has, in particular, replicas of a Shakespearian theatre and
the MIR space station and provides visitors with an intro-
duction to environmental protection in the form of a
‘four-dimensional’
film produced in collaboration with
the World Wide Fund for Nature (WWF).

in particular,

(50) Owing to the imprecise nature of

the definition of
Bioscope’s task of general economic interest, the VDFU
feels that it is impossible to regard the concession as
laying down in advance and in an objective and trans-
parent manner the basis for calculating the compensation
for the costs associated with this task. In its view, the
charges paid by SMVP have not been clearly established
and justified and are not based on objective criteria.

(46)

(47)

The VDFU considers that the French State’s assistance for
SMVP constitutes aid within the meaning of Article 87(1)
of the Treaty.

In its view, the concession arrangements do not allow
Symbio to earn a normal rate of return on its part of the
investment in Bioscope. Symbio is prepared to accept a
low charge on the park’s turnover in exchange for its

(51)

The VDFU also considers that the selection procedure for
the Bioscope concession did not describe the practi-
calities of the task of general economic interest and the
means to be implemented in order to perform that task
in enough detail for the selection procedure to be imple-
mented in such a way as to rule out any possibility of
overcompensation. France should have justified the level
of compensation payable to the concessionaire in respect
of its task of general economic interest in a detailed way
and by taking into account all the concessionaire’s expen-
diture and profits, something which, according to the
VDFU, it did not do properly.

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(52)

The VDFU goes on to say that the French State’s aid for
Bioscope is incompatible with the provisions of
the
Treaty.

(53)

the VDFU considers that

Firstly,
the aid cannot be
compatible with the regional guidelines. Given that the
aid is not granted under a Commission-approved scheme,
its positive effect on the region must be demonstrated.
According to the VDFU, however,
the area in which
Bioscope will be located already possesses at least 10
theme parks on the German side of the border alone.
Experience over the years in this field, particularly with
failed theme parks such as the
the large number of
Hagondange/Lorraine park,
that major public
investment in this sector does not have any noticeable
and beneficial structural effects on the region’s economy.

shows

(59)

(60)

SMVP claims that the design, construction and operation
of such a park could not be envisaged within a purely
private framework, a finding reached in the Rise Conseil
study.

Still according to SMVP, public participation in financing
an activity of general interest unlikely to be funded by
the private sector alone cannot be deemed incompatible
with the Community rules on State aid.

(61)

SMVP therefore concludes that the State’s participation
does not exceed the levels of aid that would be incom-
patible with Community rules.

(54) According to the VDFU, it should be demonstrated that
the park is likely to provide the region with a lasting
boost and that the resulting development makes up for
the impact that the project has on Bioscope’s compe-
titors. The VDFU cannot see how it would logically be
possible to meet both of these conditions, at the very
least if France’s arguments are followed.

VI. FRANCE’S OBSERVATIONS ON THE COMMENTS
FROM INTERESTED PARTIES

(62)

France’s observations relate solely to the comments made
by the VDFU.

(63)

(64)

(65)

(55)

Lastly, the VDFU takes the view that, in order for the aid
for Bioscope to be authorised under Article 87(3)(d) of
the Treaty,
it should be assessed whether the aid is
proportional to the objective of promoting culture and
heritage. Such a proportionality assessment could be
carried out only under conditions of transparency and
objectivity similar to those required for a proportionality
assessment
in respect of compensation for a task of
general economic interest, something which the VDFU
feels has not been carried out, as explained in point 45
et seq.

2. Comments made by SMVP

(56)

SMVP points out that it fully shares France’s views, which
are summarised in section IV.

(57)

concession.

SMVP’s only aim is to perform the obligations set out in
It would draw the Commission’s
the
attention to the very specific nature of Bioscope.
its parent
Neither SMVP nor any other subsidiary of
company has had any experience in managing such an
unconventional park.

(58) According to SMVP, Bioscope is an exclusively public
initiative whose concept has been defined by the public
authorities alone and unquestionably satisfies a general
interest.

France rejects the VDFU’s claim that Symbio would not
earn a sufficient rate of return on its investment. In its
view, Symbio would achieve a return comparable to a
risk-free rate, this being for it the rate that must be
applied to activities carried out by a public body that
has to account
It also
claims that the VDFU failed to take account of the fact
that Bioscope will be returned to Symbio after the 30-
year concession, goodwill included, thereby distorting its
calculations.

for its use of public money.

France also disagrees with the VDFU that State aid to
Bioscope would not meet the conditions laid down by
the Court in Altmark. It restates the arguments set out in
Section IV, emphasising in particular the fact that, in its
view, Bioscope would not provide a mix of leisure and
educational activities but would focus exclusively on the
latter. It emphasises the fact that the concession rules out
any modification of the park in this respect. Any under-
mining of the park’s purely educational nature on the
part of the concessionaire could be deemed ‘a particularly
serious breach of contract’, authorising Symbio to take
coercive measures that may even involve disqualifying
the concessionaire.

is not

It believes

in its view,

France also points out that Bioscope is a unique project
in competition with any
which,
the activities
German theme park.
those parks’
described by the VDFU as examples of
cultural
in
are
nature to their leisure activities. Moreover, in Germany,
only Europa-Park is less than three hours’ drive from
Bioscope.

ancillary and subordinate

activities

that

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(66)

France also rejects the VDFU’s assessment of the compat-
ibility of State support with the regional guidelines. In its
view, there is no contradiction in its arguments regarding
the regional impact of the aid. If the State succeeds in its
objective, the aid will have had a positive impact on the
region and public money will not have been wasted.
France recalls
the numerous positive effects on the
local economy that it ascribes to Bioscope. It questions
the VDFU’s argument
could deprive
the peak numbers of visitors they
German parks of
need to remain profitable. The only German park close
enough to Bioscope that could see visitors lured away is
Europa-Park. However, the number of visitors per year to
Europa-Park (3,3 million according to France)
is such
that it is highly unlikely that its survival will depend
on a hypothetical annual peak in visitor numbers.

that Bioscope

(67)

Lastly, France would point out
in its view,
Bioscope’s cultural objective corresponds fully to its
public-service task.

that,

VII. ASSESSMENT

1. Existence of aid

(68) A measure constitutes State aid within the meaning of
Article 87(1) of the Treaty when it confers, through State
resources, a selective competitive advantage on one or
certain undertakings such that trade between Member
In this
States
the
is or may be affected.
the four cumulative
Commission evaluates each of
criteria making up this definition.

section,

Selectivity

(69)

There is no doubt that the measure is selective as it
favours a single undertaking, SMVP.

State resources

(70)

The State’s assistance for Bioscope consists
in the
payment of
a body grouping
funds by Symbio,
together a number of local authorities. Therefore, State
resources are clearly being mobilised.

Effect on trade

(71)

France argues that Bioscope is a park so specific in nature
that it is in no way substitutable for the attractions of

in France’s view,

other theme parks, and in particular of the only one
which,
lies in its visitor catchment
area. The support given by the State to this project
could not therefore affect the flow of visitors or trade
between Member States.

The Commission recognises that Bioscope offers very
different activities from traditional theme parks. A visit
to a traditional theme park is therefore not an identical
alternative to a visit to Bioscope, and this certainly means
a very significant reduction in the number of visitors that
Bioscope is likely to attract from other parks.

consider

this
The Commission does not, however,
difference to be sufficient in itself to rule out altogether
all forms of substitutability. When people have to decide
how they wish to spend their free time, they do not
necessarily choose between similar activities. They can
decide to go to the swimming pool rather than the
zoo, despite the fact that the type of entertainment to
be enjoyed at the zoo is very different from that at the
swimming pool. Likewise, parents frequently decide to go
on a family visit to a museum whereas, were it up to
them, the children would have preferred to go to a fair.

The Commission considers,
to
Bioscope could, to a limited extent, be an alternative to
a visit to a German theme park.

that a visit

therefore,

(72)

(73)

(74)

(75) Accordingly,

in this
the Commission believes
particular case, the measure is indeed likely to distort
trade between Member States and thus
the
relevant criterion.

fulfils

that,

(76)

(77)

Advantage

In order to determine whether the measure confers a
competitive advantage on SMVP, the Commission must
assess whether State intervention places the undertaking
in a better situation than if market forces had been given
free rein.

The fact that the State intervenes financially is not a
sufficient condition to conclude that the recipient under-
taking is placed at an advantage. State support can be
given on the same terms as would have been accepted by
a private investor in a market economy.
It does not,
therefore, constitute an advantage within the meaning
of Article 87(1) of the EC Treaty.

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(78)

(79)

In the present case, it is a particularly complicated task to
the State’s intervention as the
analyse the nature of
in nature and lays down very
concession is
dissimilar rights and obligations for each of
the two
parties.

legal

allowing it to intervene under conditions not accessible
to private operators.

it can be considered from an
To sum up very briefly,
economic viewpoint that both parties are investing in the
Bioscope project, albeit with differing risks. Symbio, the
public-sector player, assumes very little commercial risk
whereas SMVP assumes the bulk of the risk. As is only
natural, the investor who takes less of a risk receives less
than the investor who takes more of a risk.

(85)

(86)

In the light of
therefore rule out
SMVP.

the above,

the Commission cannot
the existence of an advantage for

The Court judgment in Altmark sets out four cumulative
conditions which, if met, result in the classification of a
measure as compensation for charges related to a service
of general economic interest and not
therefore as a
competitive advantage.

(80)

The analysis must,
therefore, determine in particular
whether the respective rates of return on investment
are appropriate.

(87)

The first of these conditions is that ‘the recipient under-
taking must actually have public service obligations to
discharge, and the obligations must be clearly defined’.

(81)

The Commission notes that the analysis was carried out
by the independent company Rise Conseil and that its
findings were sent to the Commission by France.

(88) When opening the formal examination procedure, the
Commission had questioned whether this condition in
particular was met in the present case.

(82)

(83)

The analysis concludes that SMVP’s rate of return on the
Bioscope project is no higher than on similar investments
is similar to
in purely private projects and, moreover,
that on risk-free investments. This would suggest that,
the respective investors’ rates of
to a certain degree,
return match the market rates of return.

(89) Having analysed the information provided by France and
interested parties, the Commission feels that this doubt
remains.

This analysis is nevertheless based on the fact that the
investment by the public authorities can be expected to
take a very different form to SMVP's investment. For the
principle of a market-economy private investor to be
met,
it would have to be possible for another private
investor, not necessarily a pleasure-park operator, to be
able to make an investment similar to that made by the
State.

(90)

(91)

(84) However, SMVP itself points out that it is highly likely, if
not certain, that the project could have been launched
without the participation of Symbio in this form. This
tends to suggest that Symbio’s participation could not
have been replaced by that of a private investor, even
on identical terms (absence of any risk linked to a lower
rate of return). In the Commission’s view, this does not
necessarily contradict the findings of the Rise Conseil
study as the State may possess special legal instruments

The Commission considers first of all that the Bioscope’s
general educational objective, as set out for example in
the preamble to the concession, is far too vague to be
considered a clear definition of its public-service task. In
particular, the definition is too wide-ranging to serve as a
basis for any estimation of the costs of performing this
task.

For,

untenable.

obligation is

The Commission also considers that France’s argument to
the effect that the concession as a whole defines a public-
service
the
equally
concession contains many articles which would have
been entirely identical if Bioscope had not had any peda-
gogical or educational vocation whatsoever and which
cannot therefore be said to define a public-service task.
It would, at the very least, be necessary to identify which
of
to this educational
vocation. The Commission feels, however, that none of
the articles are sufficiently specific in this regard, with the
possible exception of the articles on special rates for
certain categories of visitor, as discussed in point 92.

the concession’s articles refer

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Official Journal of the European Union

L 135/29

(92)

(93)

(94)

(95)

(96)

It

clear

interest.

is, however,

Lastly, the Commission takes the view that the articles in
the concession which concern the special rates for certain
categories of visitor and to which France referred might
indeed be a basis for defining a service of general
these
economic
articles relate to only a fraction of Bioscope’s activity. If
they were invoked with a view to defining a task of
general economic interest, the scope of that task would
not be sufficient to justify considering the whole project
as a public-service project. Moreover, the very scope of
the public-service task associated with these articles is
unclear. Even unsubsidised parks tend to charge special
rates for certain categories of visitor. It is a very common
business practice.

that

In the light of the above, the Commission considers that
it cannot rule out the existence of an advantage for the
this advantage could
beneficiary undertaking and that
only very partially be covered by the notion of compen-
sation for charges related to a task of general economic
interest.

Conclusion

The Commission cannot therefore rule out the existence
of State aid within the meaning of Article 87(1) of the
EC Treaty for SMVP. Section VII(2), however, will
demonstrate that,
inasmuch as State aid exists in this
case, it is compatible with the Treaty.

2. Compatibility of the aid

The Commission notes that the aid is granted to an
less-favoured area
located in a
investment project
within the meaning of Article 87(3)(c) of
the Treaty
(the Alsace potassic basin). It is an ad hoc aid project
as it
is not covered by any aid scheme previously
approved by the Commission.

Such investment projects can sometimes be evaluated in
the light of the multisectoral framework on regional aid
for large investment projects. In this particular case, given
that the date on which the aid was granted is the same as
the date on which the amendment to the concession was
signed,
framework
applicable is that published in 1998 (10) (the framework).

i.e. 9 July 2002,

the multisectoral

— the cumulative aid intensity must be at least 50 % of
the regional aid ceiling for large companies in the
area concerned,

— the aid per job created or safeguarded must amount

to at least EUR 40 000.

(99)

This section will demonstrate that the total cost of the
project is EUR [60-65]* million and the aid intensity [7-
8]* % while the aid ceiling for the area concerned is
10 %, and that the gross grant equivalent of the aid is
EUR [5-10]* million, which, for the 105 jobs created,
gives aid per job of EUR [45 000-95 000]*.

(100) The framework is therefore applicable.

(101)

the framework,

In order to determine whether the aid is compatible with
the Commission must
the criteria of
firstly calculate the intensity of the aid. This intensity
must then be compared with a maximum aid intensity
calculated using the formula given in point 3.10 of the
framework.

Aid intensity

(102) The intensity of aid in the form of a grant is the amount
of the grant expressed as a percentage of eligible costs.
When aid is other than in the form of a grant, the grant
equivalent must first be calculated before being expressed
in terms of the eligible costs.

(103)

In this case, the aid granted by the State is complex in
nature. There is not only a grant element, but other
elements too, both positive and negative, deriving from
the rights and obligations of each of the parties to the
concession. All these elements need to be taken into
account in calculating the grant equivalent of the aid.

(104) The following table summarises the elements of

the
concession in question and their positive and negative
impact on the aid granted to SMVP.

(97)

Point 2.1 of the framework restricts its own scope to
certain projects meeting either of two specific criteria.

(98)

The first criterion is itself made up of three cumulative
subcriteria:

Element of the concession

State participation in the initial investment

Provision of land

— the total project cost must be at

least EUR 50

Payment of a charge to the State

million,

(10) OJ C 107, 7.4.1998, p. 7.

Return of the property to the State at the end of
the concession

Impact on
SMVP

Positive

Positive

Negative

Negative

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(105)

In order to calculate the gross grant equivalent of the aid,
each of
these elements must be quantified and the
algebraic sum worked out. The Commission has used
the
that
contained in the Rise Conseil report, to quantify these
elements.

disposal, particularly

information at

its

(106) The State’s participation in the initial investment is easy
to calculate: it totals EUR 30,5 million. The State will pay
this amount in instalments over 10 years, which means
that this amount must be discounted to its present value.
the Commission has used the
to do this,
In order
reference and discount rate that
it recommended for
use by France on the date on which the aid was
granted. This rate is 5,06 % and is used in all
the
following calculations.

(107) The discounted value of the State’s participation in the

initial investment is EUR 25,933 million.

(108)

It should also be noted that this grant is the State’s only
participation in the
in Bioscope. All
subsequent
investments are the financial responsibility
of SMVP.

investments

(109) The provision of land, i.e. the value of the rent not paid
by SMVP,
is estimated to be EUR 6,718 million. This
calculation is based on the value of the proposed land
in the Pulversheim area near Bioscope (EUR 10 to
12/m2) and on an annual rate of land rent of 8 %, as
defined by the General Taxation Directorate in France.

(110) The total charge payable by SMVP to Symbio is put at
EUR 7,295 million. This figure is based on the estimated
turnover given in Bioscope’s business plan, which was
sent to the Commission.

(111) Quantifying the effect of returning the property to the
State is more difficult. The effect is clearly unfavourable
to SMVP. With a traditional grant, the beneficiary is and
remains the owner of its investment and has full use of
In this
it.
particular case, Bioscope is returned to the State in its
included, at the end of the 30-year
entirety, goodwill
concession (11). Compared with a
traditional grant,
SMVP thus forgoes the value of this property, which

it on the market.

In particular,

it can sell

(11) In fact, Bioscope, strictly speaking, remains the property of the State
throughout the period of the concession, but the effect of this
the
ownership is felt
the end of
in economic terms only at
concession, when the concessionaire must give up use of
the
property without compensation.

corresponds to the price at which it could have sold it
on the market (discounted, of course, to the initial date).

(112) The Commission thus considers that this selling price
forgone by SMVP can be used to assess the value of
the negative effect of returning the property to the
State, as required by the concession.

(113) Two distinct methods have been used to calculate this
selling price: the gross operating surplus multiple method
and the free cash flow method.

(114) The first method consists of valuing the undertaking as a
multiple of its normative gross operating surplus. The
multiple depends on the sector and is estimated on the
basis of published financial data on recent transactions.

(115) The Rise Conseil analysis of

the values of multiples
observed in recent transactions in this sector for which
financial data have been published shows
sufficient
multiples varying between 6,3 (12) and 13,25 (13), with
an average of 8,71.

(116) Applying this average multiple to Bioscope values it at

EUR [15-20]* million (14).

(117) The second method consists in determining a normative
cash flow for the undertaking for the period following
the start of the concession and in assuming that the
undertaking has
the same value as a hypothetical
company producing such a cash flow in perpetuity.

(118)

In order to calculate this, an assumption as to the cash-
flow perpetuity rate has to be made.

(119) The Rise Conseil study of financial analyses of recent
transactions gives assumptions for perpetuity levels of
between 1 (15) and 3,5 % (16), with an average of 2,2 %.

(120) Moreover, perpetuity levels are generally estimated to be
of a similar order of magnitude as the economic growth
rate. Given that France's economic growth in recent years
has been between 1 and 3 %, the Commission takes the
view that a value of 2,2 % can be applied for the
perpetuity rate.

(12) Sale of Parques Reunidos (Source: Rise Conseil’s report quoting the

Advent internet site).

(13) Sale of Tussauds (Source: Rise Conseil’s report quoting Les Echos of
9 December 2003 and the Daily Telegraph of 23 February 2003).
(14) This calculation is based on the gross operating surplus envisaged
in Bioscope’s business plan, from which the hypothetical rent the
company should pay for use of the land is subtracted to take into
account the fact that any buyer would have to rent the land, unless
it in turn benefited from some kind of aid.

(15) Analysis of the merger between Ebizcuss.com and International

Computer carried out by Gruppo Banca Sella.

(16) Analysis of the stockmarket flotation of Avenir France carried out

by CIC Securities.

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L 135/31

(121) Applying

on

this method

aforementioned
assumptions gives a value of EUR [15-20]* million for
the undertaking (17). This figure is similar to the first, an
indication of
these two economic
approaches.

the coherence of

the

(122)

In order not to favour one economic approach over the
other, the Commission has taken the arithmetic mean of
these two results, i.e. EUR [15-20]* million, as the value
of the park.

(123) The gross grant equivalent of the aid is thus: 25,933 +
6,718 – 7,295 – [15-20]* = EUR [5-10]* million.

(124)

In order to calculate the aid intensity, this figure should
be expressed as a percentage of the eligible investments.

(125)

Investment in the Bioscope project will be in two main
parts: the initial investment needed for the park to open,
and the subsequent investment needed to maintain its
attraction.

(126) Both types of

investment

are mentioned in the
concession. The concession sets the value of the initial
investment at EUR 61,5 million, shared between Symbio
and SVMP. The discounted value of this investment is
EUR 49,985 million. The
concession does not,
however, set a figure for the subsequent investment but
states simply that it should be such as to maintain the
park's attraction. The subsequent
investment must be
approved by Symbio and is entirely the financial respon-
sibility of SVMP.

(127)

quantifying

In
the
Commission has based itself on SMVP,s business plan,
which has been approved by Symbio.

investment,

subsequent

the

in the last 10 years of

(128) The total discounted value of the subsequent investment
is EUR [25-35]* million. In the Commission,s view, this
is a cautious estimate as the average value of such
the concession,
investment
is only
when Bioscope will be operating as planned,
14 % of
compared with the
turnover,
average in this sector in France of between 16 and
25 % of
i.e. higher,
estimate for this investment would give a lower aid
intensity. The Commission can therefore make do with
a cautious estimate for its purposes.

turnover (18). A less

the park’s

cautious,

(17) Here too,

the calculation takes into account

the fact

that a

prospective buyer would have to pay rent for the land.

(18) Source: Rise Conseil study.

(129) Of the EUR [25-35]* million in subsequent investment,
the Commission has based itself only on the part corre-
sponding to investment in new attractions and thus in
the extension of Bioscope’s activities to calculate the
eligible costs; this figure is EUR [15-20]* million and
excludes
for
the EUR [10-15]* million set
investment in maintenance and replacement. Only the
type of
first
to
initial
investment within the meaning of the regional
guidelines (point 4.4).

investment mentioned corresponds

aside

(130) The basis for calculating eligible costs is thus EUR
investment, plus EUR
i.e. EUR

49,585 million for
[15-20]* million for subsequent
[65-70]* million.

investment,

the initial

(131) The Commission has then subtracted from these costs
the part corresponding to the launch of the attractions,
which, in its view, is not eligible for aid under point 4.5
of the regional guidelines. In the detailed description of
the first-tranche expenditure provided by France, these
activities account for 5 % of total costs. The Commission
has extrapolated this figure to the subsequent tranches.
Eligible
regional
to 95 % of EUR [65-70]*
thus amount
guidelines
million, i.e. EUR [60-65]* million.

costs within the meaning of

the

(132) The aid intensity in terms of gross grant equivalent is

thus 7,279 / [60-65]* = [10-12]* %.

(133) The corresponding intensity in terms of net grant
equivalent, calculated using the straight-line depreciation
assumptions in the business plan and the reference and
discount
rate recommended by the Commission for
France, is [7-8]* % (19).

Maximum allowable aid intensity

(134) The formula given at point 3.10 of

the framework
expresses the maximum allowable aid intensity as the
product of four factors.

(135) The first

term, R,
intensity for
large
concerned. In this case, R = 0,10.

is
companies

the authorised maximum aid
in the assisted area

(136) The second term, T, is the competition factor.

(19) This calculation is based on the assumption that, if the undertaking
could indeed sell its property at the end of the concession, the full
selling price would be counted as part of its profits and thus subject
to corporation tax, reducing accordingly the profit on the sale for
SMVP. If this effect were not taken into account, the net grant
equivalent would be even lower.

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level,
capacity utilisation rate

(137) Point 3.3 of the framework states that ‘in determining
whether structural overcapacity exists in the sector or
subsector concerned, the Commission will consider, at
the difference between the
the Community
for manufacturing
average
industry as a whole and the capacity utilisation rate of
the relevant sector or subsector’. Structural overcapacity
is deemed to exist when, over the previous five years, the
capacity utilisation rate of
sector or
subsector is more than two percentage points below
the average capacity utilisation rate for manufacturing
industry as a whole. When the difference exceeds 5 %,
the structural overcapacity is considered serious.

relevant

the

(138) As

previous
has
the Commission
decisions (20), manufacturing
be
compared to a service sector such as theme parks or
one of its subsectors. The quantitative criterion set out
in recital 137 cannot therefore be applied.

indicated
industry

in
cannot

(139)

In the absence of sufficient data on capacity utilisation,
point 3.4 of the framework states that the Commission
will consider whether the investment takes place in a
the Commission
declining market. For
will compare the evolution of apparent consumption of
the product(s) in question with the growth rate of manu-
facturing industry as a whole.

this purpose,

(140)

In the period 1997 to 2002, the average growth rate of
EEA manufacturing industry as a whole was 4,8 % (21).

(143) According to a report from the French Senate (22), theme-
park activity in France has increased ninefold in 10 years,
corresponding to an average growth rate of 25 %. The
report also states that growth in the sector is expected to
slacken but should still be between 4 and 8 %.

(144)

In the Commission’s view, these figures for France can be
used in this case, particularly as the situation in the
Member States near to Alsace, which are the only ones
falling within Bioscope’s visitor catchment area, is similar
to that in France in this respect (23).

(145)

In the light of this, the Commission considers that the
investment is not taking place in a declining market.

(146) Moreover, Grévin et Compagnie’s share of the relevant
product market is way below 40 %. The abovementioned
Senate report indicates, by way of example, that the total
number of visitors recorded by the group in 2002 was
five million, compared with 13,1 million for Disneyland
Paris alone.

(147) Applying

given in the
framework, the Commission thus concludes that T = 1.

equivalence

table of

the

(148) The third term,

I,

is the capital/labour factor.

It is a
function of the ratio of the project’s eligible costs to
the number of
the
jobs created by it.
eligible costs are EUR [60-65]* million and the number
full-time-equivalent direct jobs created is 105. The
of
ratio between these
around EUR
two values
[600 000-650 000]* per job created. Applying the table
of equivalence given in the framework, the Commission
concludes that I = 0,8.

In this case,

is

(141)

In the case of theme parks, it is difficult to obtain figures
on consumption growth for the Community as a whole.

(149) The fourth term, M, is the regional impact factor. This

factor is always equal to or above 1.

(142) As regards France, where Bioscope is located, the sector

has particularly high growth figures.

(150)

light of

In the
the
maximum allowable aid intensity is not less than 0,10
× 1 × 0,8 = 8 %.

foregoing considerations,

the

(20) See Commission Decision of 7 August 2001 in Case N 229/01 —
Italy — Aid to Pompei Tech World SpA for the project of a leisure
park (OJ C 330, 24.11.2001, p. 2).

(21) See Commission Decision of 20 April 2004 in Case N 611/2003
— Germany (Saxony-Anhalt) — Aid for investment projects in
favour of e-glass AG.

(22) Draft Finance Law 2004 — Volume III — Annexe 20: Tourism.
Section VI ‘Les parcs de loisirs en France’. Available on the Senate’s
website : http://senat.fr/rap/l03-073-320/l03-073-32029.html.
(23) According the abovementioned Senate report, France is just behind
Belgium and Germany as regards the economic weight of
the
leisure-park sector.

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Conclusion

HAS ADOPTED THIS DECISION:

(151) Given that

the aid intensity is [7-8]* % and that

the
maximum allowable aid intensity is not less than 8 %,
the aid is compatible with the rules of the framework.

(152) Accordingly, the Commission concludes that the aid is
compatible with the criteria of the regional guidelines
and hence with the common market under Article
87(3)(c) of the Treaty.

(153) The Commission would, however, point out that this
positive assessment is based on the state of play with
regard to the park project and the concession, as
described to the Commission. If the nature of the park
project were to change or if the State's involvement were
to be significantly altered, the Commission should be
informed of such a change so that it could review the
situation in the light of Community rules governing State
aid.

(154) The Commission does not prejudge the question as to
whether the procedure for granting the concession to
construct and operate Bioscope to SVMP complies with
the rules and principles of Community law. It reserves
the right to take the proper steps in this respect, should
that be necessary,

Article 1

The measure which France has implemented for ‘SMVP — Mise
en valeur du patrimoine culturel’ and the conditions of which
are laid down in the public-service delegation contract granting
the concession for ‘the design, construction and operation of
the Bioscope theme park’ between, on the one hand, Symbio
‘SMVP — Mise en valeur du patrimoine
and, on the other,
culturel’, as modified by the amendment dated 9 July 2002,
while constituting State aid,
is compatible with the common
market within the meaning of Article 87(3)(c) of the EC Treaty.

Article 2

This Decision is addressed to the French Republic.

Done at Brussels, 8 September 2004.

For the Commission

Mario MONTI
Member of the Commission