EFTA Surveillance Authority Decision No 127/07/COL of 18 April 2007 on Research and Development aid granted by the Research Council of Norway in connection with the development of the software programme Turborouter (Norway)
Date: 2007-04-18
Institutions: EFTA Surveillance Authority
Subjects: EFTA, Norway, State aid, control of State aid, industrial research, research and development, research project, software

18.9.2008

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Official Journal of the European Union

L 249/23

IV

(Other acts)

EUROPEAN ECONOMIC AREA

EFTA SURVEILLANCE AUTHORITY

EFTA SURVEILLANCE AUTHORITY DECISION

No 127/07/COL

of 18 April 2007

on Research and Development aid granted by the Research Council of Norway in connection with
the development of the software programme Turborouter (Norway)

THE EFTA SURVEILLANCE AUTHORITY (1),

HAVING REGARD to the Agreement on the European Economic
Area (2),
in particular to Articles 61 to 63 and Protocol 26
thereof,

HAVING REGARD to the Agreement between the EFTA States on
the Establishment of a Surveillance Authority and a Court of
Justice (3), in particular to Article 24 thereof,

HAVING REGARD to Article 1(2) and (3) in Part I and Articles 1,
4, 6, 7(3), 10, 13, 14, 16 and 20 in Part II of Protocol 3 to the
Surveillance and Court Agreement (4),

HAVING REGARD to the Authority’s Guidelines (5) on the appli­
cation and interpretation of Articles 61 and 62 of the EEA
‘Aid for
Agreement, and in particular Chapter 14 thereof,
Research and Development’,

HAVING REGARD to the Authority’s Decision No 217/94/COL of
1 December 1994 to propose appropriate measures to Norway
on,
Industrial R&D
Programmes,

amongst

scheme

others,

the

aid

HAVING REGARD to Norway’s acceptance of
appropriate measures by letter dated 19 December 1994,

the proposed

HAVING REGARD to the Authority’s Decision No 60/06/COL of
8 March 2006 to open the formal investigation procedure with
regard to R&D aid granted by the Research Council of Norway
in connection with the development of the software programme
Turborouter (7),

HAVING CALLED on interested parties to submit their comments
to this Decision and having regard to their comments,

HAVING REGARD to the Authority’s Decision No 195/04/COL of
14 July 2004 on the implementing provisions referred to under
Article 27 in Part II of Protocol 3 (6),

Whereas:

(1) Hereinafter referred to as ‘the Authority’.
(2) Hereinafter referred to as ‘the EEA Agreement’.
(3) Hereinafter referred to as ‘the Surveillance and Court Agreement’.
(4) Hereinafter referred to as ‘Protocol 3’.
(5) Procedural and Substantive Rules in the Field of State Aid, Guidelines
on the application and interpretation of Articles 61 and 62 of the
EEA Agreement and Article 1 of Protocol 3 to the Surveillance and
Court Agreement, adopted and issued by the EFTA Surveillance
Authority on 19 January 1994, published in OJ L 231, EEA
referred to as ‘the
Supplements, 3.9.1994, No 32. Hereinafter
Guidelines’.

(6) Published in OJ L 139, 25.5.2006, p. 37 and the EEA Supplement

No 26 of 25.5.2006, p. 1.

I. FACTS

1. Procedure

By letter dated 5 March 2002 (Doc. No 02-1733-A),
the
Authority received a complaint alleging that State aid had
been granted by Norway through the Research Council of
Norway (hereinafter the RCN) to various research projects in
connection with the development of the software programme
Turborouter.

(7) OJ C 258, 26.10.2006, p. 42.

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The Authority requested information from the Norwegian auth­
orities by letter dated 26 April 2002 (Doc. No 02-2605-D). The
Ministry of Trade and Industry replied by letter dated 3 June
2002 (Doc. No 02-4177-A), which included RCN’s comments
on the Turborouter project.

After various exchanges of correspondence (8), by letter dated
8 March 2006 (Event No 363353), the Authority informed the
Norwegian authorities
it had decided to initiate the
procedure laid down in Article 1(2) in Part I of Protocol 3 to
the Surveillance and Court Agreement in respect of R&D aid
granted by the Research Council of Norway in connection with
the development of the software programme Turborouter.

that

2.1.1. Project 40049 — Strategic activities within maritime
transport and logistics (the first version of the software
programme Turborouter)

Turborouter is a tool (11) for optimising vessel fleet scheduling,
i.e. to decide which vessels to assign different cargoes to. It
combines the knowledge and experience of the planners with
the calculating capabilities of
the computer. Turborouter is
based on electronic sea charts where scheduling information
can be displayed and includes a database for vessels, ports,
cargoes, etc; automatic calculation of port-to-port distances;
vessel position reports and automatic update of estimated
time of arrival; sophisticated optimisation routines for fleet
scheduling and schedule visualisation or schedule calculator
for manual planning.

By letter dated 7 April 2006,
the Norwegian authorities
submitted comments to the Authority’s decision to open the
formal investigation procedure.

the pilot

software Turborouter was
The first version of
developed in the first year of research of one of
the sub-
projects of Project 40049 ‘Strategic activities within maritime
transport and logistics’ called ‘Methods and analytical tools for
integrated transport and logistics
design and operation of
chains’.

The Authority’s Decision No 60/06/COL to initiate
the
procedure was published in the Official Journal of the European
Union and the EEA Supplement thereof (9). The Authority called
on interested parties to submit their comments.

2.1.2. Further development

of

the

software programme

Turborouter

According to the information provided by the Norwegian auth­
orities, the RCN selected several projects related to the develop­
ment of the software package Turborouter for R&D support.

The Authority received comments from one interested party. By
letter dated 1 December 2006 (Event No 400677)
the
Authority forwarded these comments to the Norwegian auth­
orities. By letter from the Ministry for Government Administra­
tion and Reform dated 8 January 2007 (Event No 405517)
from the Ministry of Education and
forwarding a letter
Research dated 5 January 2007,
the Norwegian authorities
submitted comments.

2. The four projects related to the software programme

Turborouter supported with RCN funds

2.1. Description of the projects

In the following,
the Authority will only provide a brief
description of the projects under assessment. For a detailed
reference is made to the
description of each of
Authority’s Decision No 60/06/COL (10).

them,

(8) For more detailed information on the various correspondences
between the Authority and the Norwegian authorities, reference is
made to the Authority’s Decision to open the formal investigation
procedure, Decision No 60/06/COL, published in OJ C 258,
26.10.2006, p. 42 and EEA Supplement No 53 of 26.10.2006,
p. 15.

(9) See footnote 7.
(10) See footnote 7.

2.1.2.1. P r o j e c t 1 3 8 8 1 1 — A l g O p t

this project (12) was to develop and carry out
The aim of
practical tests of algorithms to calculate the optimal utilisation
of a fleet of ships, given the obligations to load cargoes for
several customers, the requirements as to when cargoes must be
loaded and discharged in the destination port, the possibility of
carrying joint cargoes of a limited number of bulk goods on
each voyage, as well as limitations that mean that not all the
vessels involved are suitable for serving all customers or all
ports. Algorithms
software
concept that would offer users full control and the possibility
of overriding the suggestions made by the algorithms.

integrated into a

should be

According to the information submitted by the Norwegian
authorities, the Project AlgOpt was only a pre-study defining
the user requirements and investigation of the feasibility of
using Turborouter
the company
Beltship Management AS.

the contract partner,

for

(11) The following information has been obtained from the brochure
‘TurboRouter Vessel schedule optimizing software’, available at the
website of Marintek: http://www.marintek.no
(12) Information obtained from Marintek’s website:

http://www.marintek.no

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2.1.2.2. P r o j e c t 1 4 4 2 6 5 — S h i p l o g I I

The Shiplog project mainly dealt with transport at sea. This
project (13) was supposed to use the results of a previous
project called Shiplog (which did not
involve the use of
Turborouter) to focus on the requirements for door-to-door
delivery of goods, when transport at sea is a key element.
One of
the main activities concerned the integration of
Transport Chain Management System (TCMS) and Turborouter,
the
which should specify the
exchange of information between Turborouter and the TCMS
demonstrator. This project failed to achieve its objective mainly
because TCMS and Turborouter could not be satisfactorily inte­
grated.

interface and demonstrate

of appropriate measures implied that the award of aid under the
Industrial R&D Programme would be done in accordance with
the provisions of the Authority’s R&D Guidelines as they were
adopted in 1994.

The aid was granted by the RCN to these projects within the
R&D scheme Industrial R&D Programme.

3. Doubts of

the Authority expressed in Decision No

60/06/COL

2.1.2.3. P r o j e c t 1 4 4 2 1 4 — L i b r a r y o f o p t i m i ­
i n

s c h e d u l i n g

r o u t i n e s

f o r

s a t i o n
s h i p p i n g

The pre-competitive research project ‘Library of optimisation
routines for scheduling in shipping’ was aimed at developing
algorithms for advanced optimisation and scheduling of very
complex shipping operations. The Norwegian authorities have
explained that
the library of algorithms is very trade and
company specific and must thus be company owned and not
part of the standard Turborouter ‘tool kit’.

2.2. Description of the relationship between the four grants of aid and
the Norwegian aid scheme for industrial R&D programmes

According to the information provided by the Norwegian auth­
orities, the four grants of aid covered by the present Decision
received aid within the framework of the aid scheme ‘Industrial
R&D Programmes’ (brukerstyrte forskningsprogrammer).

The aid scheme called ‘Industrial R&D Programmes’ (brukerstyrte
forskningsprogrammer) which was administered by the RCN was
established prior to the entry into force of the EEA Agreement.

In December 1994, the Authority adopted a Decision on several
aid schemes for research and development existing in Norway
prior to the entry into force of the EEA Agreement, amongst
others, the aid scheme Industrial R&D Programme (brukerstyrte
forskningsprogrammer, Case No 93-183).
In this Decision, the
Authority proposed appropriate measures to bring the scheme
in line with the State aid rules of the EEA Agreement (14). In
particular, the Authority proposed to Norway the introduction
of detailed provisions which would ensure that awards of aid
were granted in accordance with the principles laid down in
Chapter 14 of the State Aid Guidelines.

Norway accepted the appropriate measures proposed by the
Authority by letter dated 19 December 1994. The acceptance

(13) Information obtained from Marintek’s website: http://www.mar­

intek.no

(14) Decision of the EFTA Surveillance Authority No 217/94/COL of
1.12.1994. The schemes covered by this decision were: Industrial
R&D Contracts (Case 93-147) and Public R&D Contracts (Case 93-
182) granted by the SND and Industrial R&D Projects (Case 93-
181) and Industrial R&D Programs (Case 93-183) granted by the
RCN.

On 8 March 2006, the Authority decided to open the formal
investigation procedure provided for in Article 1(2) in Part II of
Protocol 3 to the Surveillance and Court Agreement on R&D
aid granted by the RCN in connection with the development of
the software programme Turborouter (Decision No 60/06/COL).
In the opening decision, the Authority described the complaint,
the
software programme
Turborouter supported with RCN funds and the relationship
between the four grants of aid and the Norwegian scheme for
Industrial R&D Programmes.

four projects

to the

related

The Authority made a detailed assessment of the applicable legal
framework to the assessment of the four projects concerned (15).
Following the acceptance of the appropriate measures suggested
in the Authority’s Decision No 217/94/COL, any grant of aid
under the Industrial R&D Programme had to be done in
accordance with the 1994 R&D Guidelines. Hence, by defi­
nition, any aid granted under
the scheme Industrial R&D
Programmes which does not comply with the provisions of
the 1994 R&D Guidelines would fall outside the scope of appli­
cation of the scheme. Accordingly,
it would constitute new
such, be notified to the
individual
Authority individually and be assessed on the basis of
the
R&D Guidelines applicable at the time the aid was granted.

aid and should, as

As to the reasons for opening the formal
investigation, the
Authority expressed doubts on several points as to whether
the four R&D projects concerned had received support within
the framework of the aid scheme Industrial R&D Programmes.

The Authority had doubts as to whether these projects went
beyond the stage of applied or pre-competitive research to
constitute a commercial product. The borderline between a
pilot project, which could not be used commercially, and a
commercial final product seemed very diffuse in the case in
hand because the software needs to be adapted anew for each
new application specific to each final user. The Authority ques­
tioned to what extent the further development of the software
programme Turborouter,
for use in developing applications
which serve concrete needs for the final users, can be covered
by the definition of applied research.

(15) See Section II.1 of Decision No 60/06/COL, p. 11 ff.

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On the basis of the information available at that stage of the
procedure, the Authority was not in the position of ascertaining
whether these projects were correctly classified as pre-compe­
titive development activities or whether, on the contrary, they
were already too close to the market to be eligible for state aid.

the Authority had doubts

Furthermore,
financing of the projects,
disbursement of the own-contributions,
eficiaries of the projects.

the
in particular regarding the effective
in kind, of the ben­

concerning

Following the arguments put forth by the complainant, the
Authority had doubts as to whether the overall costs of the
projects had been artificially increased to cover operational
expenses of the beneficiary undertakings and whether the real
the projects corresponded to the amounts
research cost of
granted by the RCN.

first

that

software

developed

It seemed to the Authority that it was Marintek, the research
institute
programme
the
Turborouter, which had the necessary know-how and techno­
logical competence to do the project. Therefore,
it appeared
rational to assume that most of the work would have been
carried out by its own staff. This would imply,
in principle,
that the involvement of the staff of the participating under­
takings would most probably have been related to the definition
of the users needs and/or, to some degree, of testing. To the
extent that the contribution in kind of the participating under­
takings may not have corresponded to research costs,
the
overall costs of the research project would be lower and the
aid intensities accordingly higher.

For these reasons, the Authority had doubts both as to whether
the above mentioned projects had received aid in compliance
with the applicable R&D Guidelines and as to whether the
beneficiaries had used the
the
accepted appropriate measures on the scheme Industrial R&D
Programmes.

aid in contravention of

4. Comments from third parties

On 24 November 2006, the Authority received comments from
an interested party which were more of a general nature than
the Authority expressed in
directly related to the doubts
Decision No 60/06/COL to open the formal
investigation
procedure on R&D granted in connection with the development
of the software programme Turborouter. This party alleged that
the Norwegian Research Council had given substantial funds to
a new project called OPTIMAR (16). This project
is entirely
supported by the Norwegian Research Council for the years
2005-09.
Ideally, this project is directed by the Department
of Operative Research of the Norwegian University of Science
and Technology (hereinafter NTNU) in Trondheim. The ultimate
goal for this project is to further develop Turborouter into a
commercial project, a process which is already under way.

(16) See http://www.iot.ntnu.no/optimar/

it

said to be

is very difficult

in Trondheim considers that

This party added, ‘Prof Marielle Christiansen (Head of OPTIMAR
project)
for
companies to participate and take advantage of results from
this program which is
research
programme with the view of broadening the base for all
Norwegian companies, because
they are already working
closely with SINTEF and MARINTEK and had promised to
share the research results with these commercial organisation
(SINTEF
located in
Trondheim and has for a number of reasons close ties with
the Technical University NTNU).’

and MARINTEK are both institutes

a public

‘Turborouter is very much the
In the opinion of this party,
common element
in this issue as all personnel working at
NTNU/Dept of Oper Res/Marintek/SINTEF see TURBOROUTER
as their common goal’.

This party alleges that
the companies working to develop
TURBOROUTER are now getting even more state aid through
the NTNU, covered as funds to basic research.

The final comment made was that Turborouter was not used by
any of the companies that received funds to develop it, which
lead this party to conclude that
the funds received in the
research project were merely subsidies to their daily operations.

5. Comments by the Norwegian authorities

5.1. Comments to the Authority's decision to open a formal investi­

gation procedure

5.1.1. Comments from the Ministry of Government Adminis­

tration and Reform

In the letter dated 7 April 2006, the Ministry of Government
Administration and Reform referred to the description made in
the Authority Decision No 60/06/COL of the formal corre­
spondence with the Norwegian authorities. The Norwegian
authorities made further reference to the meetings between
the Authority and the Norwegian authorities
in October
2002, and in September 2004 and added that a meeting had
been held between the Authority and the Norwegian authorities
in Brussels on 22 May 2003.

that

the Authority’s
The Norwegian authorities pointed out
Decision No 60/06/COL did not describe how the aid to the
development of the Turborouter programme distorted compe­
tition in the EEA or in third markets. In their opinion, this
question should be clarified because the Turborouter R&D
programme failed to deliver the expected results. Although
the Norwegian authorities acknowledged that
the intangible
know-how from the project had been disseminated into other
R&D projects, they did not consider it evident that this had
affected competition in the Internal Market, or
in third
country markets.

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The Norwegian authorities questioned some of the facts in the
complainant’s allegations that were reiterated in the Authority's
decision, in particular, the allegations in Section 3 on page 3 in
Decision No 60/06/COL and the supporting quotes from the
complainant.

The Norwegian authorities first of all questioned how the
complainant had been able to classify the projects as being
too close to the market. Further,
they questioned how the
complainant was able to allege that the R&D results had not
been disseminated despite the fact that Marintek received the
property rights to the programme. Finally, they questioned how
the complainant was able to claim that the own-capital contri­
butions from the participating companies were in reality lower
than stated in the application form. According to the RCN, the
complainant has had its request for access to the application
forms and the R&D contracts denied for professional confiden­
tiality reasons. On this background, the Norwegian authorities
believed that the allegations from the complainant generally
seem to be lacking in substantiation. The Norwegian authorities
‘The allegations from the complainant that the own-
added,
capital contributions
from the concerned companies were
lower than stated in the application forms also implies that
these firms are accused of misusing State aid. This also raises
questions related to the legal certainty of the companies that
participated in the Turborouter projects. These claims from the
complainant should therefore clearly be substantiated.’

5.1.2. Comments from the Research Council of Norway

In a letter enclosed to the above mentioned letter from the
Ministry of Administration and Reform, the Research Council
of Norway (hereinafter
commented upon the
the RCN)
Authority’s Decision No 60/06/COL. The RCN pointed out
that it had forwarded to the Authority all available information
and clarification requested, including the submission of copies
of all project documentation for the four projects related to the
development of Turborouter supported with funds from RCN.
According to the RCN, in the meetings and correspondence up
to and including the letter from the Norwegian authorities of
20 June 2003, the only matter of discussion was the correct
classification of the projects according to the Guidelines for aid
for R&D.

Regarding the description of the projects, the RCN alleged that
the tables given in the description of the funding of the projects
in the Authority’s Decision No 60/06/COL did not comply
entirely with the figures given in the text. The funds granted
by the RCN to the projects consisted of two parts. One part of
funds from RCN was in fact private funds originating from the
Norwegian Shipowners' Association, while the rest was public
funds. The table below, which is the same as submitted to the
Authority in the letter of 11 April 2003, describes the situation.
Regarding Project 138811 AlgOpt, the table in Decision No
60/06/COL gives the figures as they were at the start of the
project. During the execution, the project was given additional
funding of NOK 100 000 of which NOK 25 000 was granted
from RCN.

Table 1

Projects supported by RCN, involving development of Turborouter

P 40049

Strategic activities within maritime
transport and logistics

P 144265

Shiplog II

P 138811

AlgOpt

P 144214

Library of optimisation routines
for scheduling in shipping

NOK 1 000

%

NOK 1 000

%

NOK 1 000

%

NOK 1 000

%

Own Funds

4 500

Other private funds

Other public funds

0

0

RCN prgr. MARITIM

6 000

43

0

0

57

800

3 250

0

2 150

13

52

0

35

625

75

0

325

61

7

0

32

1 950

2 750

0

2 300

28

39

0

33

Of which NSA

1 380

Of which public

4 620

13

44

750

1 400

12

23

120

205

12

20

805

1 495

12

21

Total funds

10 500

100

6 200

100

1 025

100

7 000

100

Personnel and indirect

8 700

Purchase of R&D

600

83

6

800

2 150

13

35

545

380

53

37

4 100

2 900

59

41

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P 40049

Strategic activities within maritime
transport and logistics

P 144265

Shiplog II

P 138811

AlgOpt

P 144214

Library of optimisation routines
for scheduling in shipping

NOK 1 000

%

NOK 1 000

%

NOK 1 000

%

NOK 1 000

%

Equipment

Other operating costs

450

750

4

7

Total cost

10 500

100

Contract partner

Marintek

Participants

NTNU

100

3 150

6 200

UECC

Marintek

R.S. Platou
Shipbrokers

Iver Ships AS

LogIT AS

2

51

0

100

0

10

0

0

0

0

100

1 025

100

7 000

100

Beltship Management AS

Beltship Management AS

Marintek

Marintek

Iver Ships AS

Shipnet AS

Laycon Solutions AS

Lorentsen & Stemoco AS

Astrup Fearnleys AS

DFDS Tollpost Globe

Shipnet AS

Wallenius Wilhelmsen

SINTEF Tele og data

Project Period

Jan. 1996-Dec. 1998

Jan. 2001-Dec. 2002

Jan. 2000-Oct. 2000

Jan. 2001-Dec. 2002

Regarding the Authority’s comment in Decision No 60/06/COL
that the RCN did not seem to control how the own contri­
butions of the beneficiaries were distributed to various activities
the RCN
effectively disbursed,
they were
and whether
considered that
they had described how eligible costs were
controlled before aid was paid to the contracting partner and
how the different contributions were disbursed in previous
correspondence with the Authority (17).

Regarding the classification of the Projects 138811 AlgOpt,
144265 Shiplog II and 144214 Library of optimisation
routines for scheduling in shipping, the RCN restated that all
three projects were classified as pre-competitive development
based on a thorough assessment and evaluation of the project
applications according to the RCN procedures and guidelines
for project evaluation. These procedures and guidelines were
in place to make sure that aid granted under the aid
put

(17) In particular, in their letter dated 31 January 2005, p. 4.

scheme Industrial R&D Programmes are in accordance with the
principles laid down in Chapter 14 of the State Aid Guidelines.

these documents

The RCN explained that there is an internal system of quality
assurance of RCN’s activities. This system is called DOKSY.
DOKSY comprises a broad documentation of the guidelines,
procedures and practices that are followed in the RCN. One
for determining aid
is the guidelines
of
intensity applied to retained projects. This internal document,
DOKSY-5-6-1-4-IE, entitled ‘Støtteandel etter EØS-bestemmelser’
(aid intensities according to EEA rules) corresponds to the
Authority's R&D Guidelines. The document applies definitions
and corresponding aid intensities in compliance with the defi­
the different R&D stages in the Authority's R&D
nition of
Guidelines. The
the
projects that
receive aid from the RCN is based on the
DOKSY guidelines.

and classification of

assessment

all

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After 1999, in addition to DOKSY 5-6-1-4-IE, all projects have
been evaluated using the computer-based system ‘Provis’. Provis
is described in Doksy No 5-6-1-2-EE ‘Prosjektvurdering i Provis’. In
Provis, each project
is evaluated according to 11 different
aspects. The most important aspects in Provis related to the
classification of research categories, are aspect No 3 ‘Research
Content’ and aspect No 9 ‘Additionality’. For each of the aspects,
there are several criteria or characteristics that are applied in
order to characterise to what extent the project is in compliance
with the aspects.

concerning the

activities, classified as pre-competitive development may be
eligible for an aid intensity of 35 %. The Authority has also
expressed their doubts
the
projects and the aid intensities. Regarding the slight discrepancy
between the figures related to Project 138811 AlgOpt in Tables
1 and 2 on page 17 of Decision 60/06/COL, this is explained in
Section 1.3.a) above. The correct figures including the contri­
bution from the Norwegian Shipowners' Association are given
in the table in that section of this letter.’

financing of

to what

In the description of the Guide for evaluation of aspect No 3 in
it is underlined that ‘Research content
Doksy No 5-6-1-2-IE,
indicates
new
degree
knowledge’. This criterion is directly linked to the description
Industrial Research in the R&D guidelines where the
of
requirement is that the activity is ‘aimed at
the acquisition of
new knowledge’.

produces

project

the

the description is,

In the Guide for evaluation of aspect No 9 in Doksy No 5-6-1-
‘Additionality indicates to what degree
2-EE,
efforts, actions,
trigger
support
results and effects that would not have been achieved had support
not been granted.’ This criterion is linked to the R&D guidelines,
point 14.7, Incentive effect of R&D aid.

from the Research Council will

On this basis, the RCN argued that since the evaluation of the
projects was thoroughly carried out in accordance with the RCN
procedures and guidelines for project evaluation, it should not
be questionable that they were correctly classified. The RCN,
after the complaint was raised and the Authority started their
preliminary investigation,
looked again at these projects and
nevertheless reiterated its original position.

‘In the meeting in Brussels 22 May 2003, the classification of
certain activities in two of the Projects, No 40049 and No
144214, were discussed. In the letter of 20 June 2003, which
was a response to this meeting, we advocated that the RCN's
principal position was that, at a minimum, all activities in
project No 40049 could be classified as industrial research,
and all activities in Project No 144214 may at least be classified
as pre-competitive development. We did however demonstrate
to the Authority that the total amount of aid given to the
projects was within the permissible limit of a weighted
average as defined in the R&D guidelines Chapter 14.5.2(5).
This is the case even when the disputed activities are not
supported in the case of Project No l44214. Similar consid­
the Projects
erations and calculations may be done for
In this context we would also make
138811 and 144265.
reference to the fact
these three Projects 138811,
that all
144214 and 144265 involved effective cooperation between
firms and public research bodies
(in this case Marintek).
According to point 14.5.3 (5)(b) of the R&D Guidelines these

encourage

regarding the
In the case of Project 144265 Shiplog II,
Authority’s remark that
the amount granted by the RCN
equalled the sum necessary to purchase R&D, the RCN argued
that this does not imply that the private means invested in
‘In industry-
Shiplog II were not used on R&D activities,
applied for by private
driven projects, which can be
cooperation between
companies, we generally
In order to
private companies and public R&D institutions.
promote
for
calls
such cooperation we may
proposals for industry-driven projects state that the application
will be evaluated favourably if the external purchases of R&D
from research institutions (institutes or universities) are at least
as high as the support given by the RCN. The purpose of this
approach is to provide the incentives for increased investments
by private sector towards purchase of R&D from research insti­
tutions. This is the reason why the funds granted by the RCN
correspond exactly to the amount necessary to purchase R&D
services in several projects.’

in some

In its Decision No 60/06/COL, the Authority stated that it was
questionable whether this approach of the RCN led beneficiaries
in the R&D costs.
to include their normal operating cost
Therefore it questioned whether
the total
project costs had been inflated to seemingly obtain more
public financing. In the opinion of the RCN, it is not under­
standable how the RCN's approach with a built-in incentive
structure to promote the purchase of R&D might
lead to
such results.

the figures

for

the time of

In its letter to the Authority dated 31 January 2005, the RCN
explained the standard procedure for documentation of project
‘For the involved
costs valid at
these projects,
projects,
the contracting partner was required to submit a
cost claim report (regnskapsrapport) three times a year detailing
the cost of the project, including a verification of the persons
involved (by name), the number of working hours spent by
each person, and the cost per hour charged to the project
responsible
account. The report
person. At the end of the year, the accounts for the year are
also checked and signed by a certified accountant. The
to the contract partner. The RCN
accountant
payment was contingent upon approval of
the submitted
accounts.’

signed by the project

is external

is

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The RCN informed the Authority that it had been in contact
with United European Car Carriers (UECC) and with Jebsens
(successor of Beltship Management) and requested further docu­
mentation on the costs related to these projects. The letter from
Jebsens dated 17 March 2006 and the letter from UECC dated
29 March 2006 were forwarded to the Authority. The cost
claim reports for Project 144265 Shiplog II provided in the
letter from UECC include signed cost statements from the
other participating partners. The companies did not have any
general recording system for working hours, which means that
the hours spent on the projects were only documented in the
cost claim reports sent to the RCN three times a year. No
further documentation exists. In the opinion of the RCN, this
means that the costs of the projects have to be assessed by the
available cost claim reports.

II. APPRECIATION

1. The presence of state aid

1.1. State aid within the meaning of Article 61(1) EEA Agreement

According to Article 61(1) of the EEA Agreement,

‘Save as otherwise provided in this Agreement, any aid granted
by EC Member States, EFTA States or through state resources in
any form whatsoever which distorts or threatens to distort
competition
the
production of certain goods shall, in so far as it affects trade
between Contracting Parties, be incompatible with the func­
tioning of this Agreement.’

undertakings

favouring

certain

by

or

The RCN finally pointed out that these cost claim reports were
in accordance with reporting procedures of the RCN, and that
the beneficiaries had fulfilled all their obligations according to
the contracts awarding the grants. In the opinion of the RCN,
‘unless clear evidence of the contrary there is no reason to
believe that any misuse of aid has taken place.’

Thus, in order for a measure to be considered State aid, it must
constitute a selective advantage in favour of certain under­
takings, be granted through state resources, distort competition
and affect trade between the Contracting Parties to the EEA
Agreement.

5.2. Comments to third party’s comments

By letter of the Ministry for Government Administration and
Reform dated 8 January 2007 (Event No 405517) forwarding a
letter
from the Ministry of Education and Research dated
5 January 2007, the Norwegian authorities submitted obser­
vations to the third party comments.

The Authority already came to the conclusion that the grants
given by the RCN to the projects related to the development of
the software programme Turborouter under review constitute
State aid in its assessment in Decision No 60/06/COL. In this
respect, reference is made to point II.2 of this Decision. This
assessment has not been disputed by the third party or the
Norwegian authorities. The Authority therefore upholds its
view that the grants constitute State aid.

‘Though it
it seems like the third party is of

In the opinion of the Norwegian authorities, the comments
regarding the project OPTIMAR do not provide any information
the
related to the four projects which are the subject of
Authority’s decision 60/06/COL,
is not explicitly
stated,
the opinion that
illegal State aid has been granted to support a basic research
project called Optimisation in Maritime Transportation and
Logistics, OPTIMAR. We are of the opinion that this is not
the case. In support of the OPTIMAR project, the Norwegian
University of Science and Technology (NTNU)
in Trondheim
receives funds from the RCN under Project No 1666S6. The
industrial partners that were participants in the four original
projects do not take part in this basic research project.’

Regarding the third party’s allegation that Turborouter is not
used by any of the companies that received funds, the RCN is of
the opinion that even if this should be the case, it is not an
argument for any illegal use of State aid in the case of the four
projects which are the subject of the Authority's Decision No
60/06/COL. It is one of the most typical features of research
and development
there is a risk involved. Sometimes
research results can be applied in operations or used in
commercial products or services, sometimes they cannot.

that

1.2. The applicable legal framework

In Decision No 60/06/COL to open the formal
investigation
procedure on R&D aid granted by the RCN in connection
with the development of the software programme Turborouter,
the Authority explained in detail what would be the applicable
the four projects
legal
concerned by this investigation. For the sake of understanding
of the assessment hereinafter, the Authority briefly outlines the
legal situation (18) below.

the assessment of

framework for

The four projects assessed in this Decision were granted R&D
aid in the framework of the Industrial R&D Programme (bruker­
styrte forskningsprogrammer, Case No 93-183). The Industrial
R&D Programme was already in place before 1994. By way
the
of Decision No 217/94/COL of December 1994,
Authority
and
Industrial R&D Programme
proposed appropriate measures to require that the granting of
aid be done in accordance with the principles laid down in
Chapter 14 of the State Aid Guidelines.

assessed the

(18) For further details, reference is made to Decision No 60/06/COL,

Section II.1, p. 11.

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The acceptance by the Norwegian authorities of the proposed
appropriate measures implied that, thereafter, any grant of aid
under the Industrial R&D Programme had to be done in
accordance with the R&D rules applicable at the time when
the
the Authority adopted Decision No 217/94/COL,
1994 R&D Guidelines (19).

i.e.

1.3. The assessment of the projects on the basis of the aid scheme

Industrial R&D Programmes

The Authority considered, by the opening of a formal investi­
gation in Decision No 60/06/COL, that the four projects had
been granted R&D aid in the framework of the Industrial R&D
Programme. This program was already in place before 1994.
Following the adoption of new R&D guidelines in 1994, there­
inafter any grant of aid under a R&D scheme had to be done in
accordance with the new rules. Hence, the Authority considered
that, by definition, any aid granted under the scheme Industrial
R&D Programmes which does not comply with the provisions
of the 1994 R&D Guidelines, would fall outside the scope of
application of
the measure would
constitute new individual aid and should, as such, be notified
to the Authority individually.

the scheme. Accordingly,

In the following, the Authority will assess whether the appli­
cation of the scheme Industrial R&D Programmes to the four
concrete projects identified as relating to the development of
the software programme Turborouter was done in line with
Article 61(3)(c) of the EEA Agreement on the basis of the
provisions of the 1994 R&D Guidelines.

1.3.1. Project 40049 — Strategic Activities within maritime
the

first version of

transport and logistics
software programme Turborouter)

(The

One of the sub-projects covered by Project 40049 ‘Strategic
activities within maritime transport and logistics as industrial
research’
led to the development of the first version of the
software programme Turborouter. The RCN classified the
whole Project 40049 Strategic
activities within maritime
transport and logistics as industrial research as a whole.

Basic industrial research was defined under Point 14.1.(2) of the
1994 R&D Guidelines as ‘original theoretical or experimental
work whose objective is to achieve new or better understanding
of the laws of science and engineering as they might apply to
an industrial sector or the activities of a particular enterprise.’

Although Turborouter has become a commercial software tool,
the Authority considers that the RCN funds allocated to the

(19) In January 1994, the Authority adopted Decision No 4/94/COL on
the adoption and issuing of the Procedural and Substantive Rules in
the Field of State Aid (Guidelines on the application and interpre­
tation of Articles 61 and 62 of the EEA Agreement and Article 1 of
Protocol 3). Chapter 14 thereof deals with Aid for research and
development, which mainly corresponded to the Community
framework for State aid for
research and development. This
Decision was published on the Official Journal L 231, 3.9.1994,
p. 1-84 and EEA Supplement No 32, 3.9.1994, p. 1.

noted

the first

the Authority

research within the meaning of

sub-project ‘Methods and analytical tools for design and operation
of integrated transport and logistics chains’ of Project 40049 which
led to the development of
software programme
Turborouter concerned a phase of R&D which qualified as
the 1994 R&D
industrial
Guidelines. As
in Decision No
60/06/COL, since the first software was developed in the first
phase of the sub-project back in early 1996, the software has
been further improved and also marketed. However,
it seems
the granting of aid to Project 40049 which resulted,
that
amongst others,
the first software
in the development of
Turborouter, cannot, by this fact, be considered in relation to
market proximity to be beyond the stage of industrial research
as it was classified by the RCN. The Authority has no reason to
question the RCN’s assessment that the sub-project ‘Methods and
analytical tools for design and operation of integrated transport and
logistics chains’ achieved a new or better understanding of the
laws of science and engineering applicable to an industrial
research within the
industrial
sector, which constitutes
meaning of the 1994 R&D Guidelines.

As industrial research, Project 40049 was granted aid from the
RCN for an amount corresponding to 43,8 % of the costs of the
project. This intensity is below the maximum aid intensity
allowed by the Guidelines according to which ‘the level of aid
for basic industrial research should not be more than 50 % of the
gross costs of the project or programme.’

For the purpose of calculating the intensity of aid from R&D
activities, Section 14.5.1 of 1994 R&D Guidelines foresaw the
following eligible costs:

‘— personnel costs (researchers, technicians, other supporting
staff) calculated as a sum of the total amount needed to
carry out the project;

— other running costs calculated in the same way (costs of

materials, supplies, etc.);

— instruments and equipment, land and buildings;

— consultancy and equivalent services including bought-in

research, technical knowledge, patents, etc.;

— additional overhead costs incurred directly as a result of the

R&D project or programme being promoted.’

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According to the information provided by the Norwegian auth­
orities, the costs of the project taken into account in the deter­
mination of the granting of aid were covered by the definition
of eligible costs provided in the 1994 R&D Guidelines. Section
3 to the ‘Retningslinjer for Norges Forskningsråds behandling av
brukerstyrte og næringsrettede prosjekter’ referred to the costs that
could be considered eligible by the RCN when assessing the
granting of R&D aid to a project. They covered personnel
costs (salary and social costs for R&D personnel, i.e. researchers,
technicians and assistants related to the project and necessary to
carry it out), purchasing of R&D services (consultancy services
and equivalent services), operating costs (including material
costs and other operating costs directly related to the project
and necessary to complete it) and equipment and instruments if
the
used only for R&D. Thus,
description of the eligible costs to be in accordance with the
definition provided for in the 1994 R&D Guidelines.

the Authority considers

investigation
In Decision No 60/06/COL to open the formal
procedure, the Authority expressed doubts regarding the classi­
fication of the R&D projects as pre-competitive research and
regarding the classification of
the different parts of each
project within each research category. Moreover, the Authority
questioned whether
the aid intensities were respected and
whether the financing of the projects was done in accordance
with the provisions of
and
accordingly with Article 61(3)(c) of the EEA Agreement. The
Authority had doubts as to whether the financial contributions
of the private participants, mostly to be disbursed in kind, really
corresponded to working hours related to the development of
the R&D projects or whether, on the contrary, they covered
operating costs of the concerned undertakings.

the 1994 R&D Guidelines

1.3.2.2. T h e a p p l i c a b l e p r o v i s i o n s o f

t h e R & D

G u i d e l i n e s

The project was exclusively carried out by the research institute
Marintek without further participation of or collaboration with
private undertakings at this stage of the R&D.

As already mentioned in the decision to open the formal inves­
tigation procedure, under
the 1994 R&D Guidelines, and
accordingly under the provisions of the aid scheme Industrial
there was no written obligation to dis­
R&D Programmes,
seminate the results of research. Thus, even if the allegation
brought
the
forward by the complainant
research had not been disseminated and that
the research
institute Marintek had received the property rights to sell the
programme were
the
provisions of the R&D Guidelines applicable at the time of
the granting of aid.

it would not

the result of

contravene

correct,

that

The RCN classified all
three projects as pre-competitive de­
velopment activity. Point 14.1.(2) of the R&D Guidelines of
1994 distinguished between three categories of research: funda­
mental, basic industrial and applied research and development.
Applied research and development corresponded to the concept
of pre-competitive research used from the adoption of the 1996
R&D Guidelines onwards. According to this provision, applied
research ‘covers investigation or experimental work based on
the
research to acquire new
knowledge to facilitate the attainment of specific practical
objectives such as the creation of new products, production
processes or services. It could normally be said to end with
the creation of a first prototype.’ Development is considered
to cover ‘work based on applied research aimed at establishing
new or substantially improved products, production processes
or services up to but not including industrial application and
commercial exploitation.’

results of basic

industrial

For these reasons, the Authority considers that the granting of
aid to Project 40049 falls within the scheme Industrial R&D
Programme as amended on the basis of Chapter 14 of the
Authority’s 1994 R&D Guidelines. The
therefore
granted in accordance with Article 61(3)(c) EEA.

aid is

1.3.2. The projects relating to the further use of the software

programme Turborouter

1.3.2.1. D o u b t s o f

t h e A u t h o r i t y e x p r e s s e d i n

D e c i s i o n N o 6 0 / 0 6 / C O L

In 2000, the RCN authorised the granting of R&D aid to three
R&D projects which concerned the use and further development
of
the software programme Turborouter: Project 138811
‘AlgOpt’, Project 144265 ‘Shiplog II’ and Project 144214
‘Library of optimisation routines for scheduling in shipping’.

Section 14.4 of the 1994 R&D Guidelines sets out the aid
‘The intensity of aid that may be accepted
intensities allowed.
is assessed by the EFTA Surveillance Authority on a case-by-case
basis. The assessment takes into consideration the nature of the
project or programme, the technical and financial risk involved,
overall policy considerations related to the competitiveness of
European industry, as well as the risk of distortion of compe­
tition and effect on trade between the Contracting parties to the
EEA Agreement. A general evaluation of such risks leads the
EFTA Surveillance Authority to consider that basic industrial
research may qualify for higher levels of aid than those for
applied research and development activities which are more
closely related to the market introduction of R&D results and,
there, if aided, could more easily lead to distortions of compe­
tition and trade’. Taking account of these factors, the 1994
R&D Guidelines state that the level of aid for basic industrial
research should not be more than 50 % of the gross costs of the
project and consider that, as the activity being aided gets nearer
to the marketplace, the level of aid should be lower. It is only in
the 1996 R&D Guidelines
the permissible gross aid
that
intensity for pre-competitive development activities is fixed at
25 % of the eligible costs.

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1.3.2.3. A s s e s s m e n t

a i d w a s
o f w h e t h e r
g r a n t e d i n a c c o r d a n c e w i t h t h e R & D
G u i d e l i n e s a n d o f w h e t h e r t h e a i d w a s
m i s u s e d

t h e

aspects. One of the most important aspects related to the clas­
sification of research categories is the research content.

(a) Classification as pre-competitive development activity.

As mentioned above and explained in detail in the Decision
No 60/06/COL, the Authority expressed doubts as regards
classification of Project 138811 ‘AlgOpt’, Project
the
144265 ‘Shiplog II’ and Project 144214 ‘Library of optimi­
sation routines for scheduling in shipping’ as pre-competitive
development activities.

‘Research content

In the description of the Guide for evaluation of the research
content of a project in Doksy No 5-6-1-2-IE, it is underlined
that
indicates to what degree the project
produces new knowledge’. According to the
information
provided by the RCN, this criterion is directly linked to the
description of the R&D guidelines where the requirement is
that the activity is ‘aimed at the acquisition of new knowledge’.

the Authority expressed
In its Decision No 60/06/COL,
doubts regarding the difference between the pre-competitive
phase of a product and the final commercial product in
respect of these kinds of IT projects. The Norwegian auth­
orities have not made clear what this difference should be.
However, they have stressed that the classification of the
projects was based on a thorough assessment and evaluation
of
the projects according to the RCN procedures and
guidelines for project evaluation. According to the infor­
mation provided, these guidelines incorporate the provisions
of the Authority’s R&D Guidelines.

are
the guidelines

the guidelines, procedures
followed in the RCN. One of

The RCN explained that there is an internal system of quality
assurance of RCN’s activities called DOKSY. DOKSY comprises a
and
broad documentation of
that
practices
these
for determining aid intensity
is
documents
applied to the selected projects. This
internal document,
DOKSY-5-6-1-4-IE entitled ‘Støtteandel etter EØS-bestemmelser’
(aid intensities according to EEA rules) corresponds to the
Authority's R&D Guidelines. The document applies definitions
and corresponding aid intensities in compliance with the defi­
the different R&D stages in the Authority's R&D
nition of
Guidelines. The
the
projects that
receive aid from the RCN is based on the
DOKSY guidelines.

and classification of

assessment

all

After 1999, in addition to DOKSY 5-6-1-4-IE, all projects have
been evaluated using the computer-based system ‘Provis’, which
is described in Doksy No 5-6-1-2-EE ‘Prosjektvurdering i Provis’.
According to the provisions of Provis, each project is evaluated
according to eleven different aspects (20). For each aspect, Provis
foresees the application of several criteria or characteristics to
characterise to what extent the project is in compliance with the

(i)

(20) The Guidelines for project evaluation in Provis take account of
several aspects:
(ii) an
the general quality of
evaluation of the project based on significant criteria such as the
innovation level, the research level and content, international orien­
tation, business value, socio-economic effect, risk, (iii) the effect of
the support, (iv) the relevance for the programme and for the field
of competence as well as (v) eligibility.

the project,

The RCN has informed the Authority that the evaluation of the
projects was thoroughly carried out in accordance with the RCN
procedures
evaluation, more
specifically, on the basis of the requirements laid down in the
Doksy and Provis internal documents,
in line with the R&D
Guidelines.

and guidelines

for project

On the basis of the information brought forward before and
during the formal investigation procedure the Authority has not
been able to conclude that there has been mismanagement or
failed assessment of the projects.
In lack of such conclusive
evidence, and in light of the above described routines and the
capacity of the professional staff working for the RCN, the
Authority has no basis for concluding that they have made
an incorrect assessment of
the projects as pre-competitive
research.

(b) The participation of the beneficiary undertakings and the aid

intensities:

The Norwegian authorities have
regarding the financing of
above under Section 4.1.2 of this Decision.

figures
clarified the
the projects as mentioned

The Authority raised doubts in its Decision No 60/06/COL
to open the formal investigation procedure on the partici­
pation of the companies involved in the research project. In
its opinion, it would seem rational to assume that most of
the work would have been carried out by the own-staff of
the research institute Marintek which would imply,
in
principle, that the participation of the staff of participating
shipping companies as the final users of the software, would
have most probably been related to the definition of the
users needs and/or, to some degree, of testing. Therefore,
the Authority questioned whether the figures for the total
project costs had been inflated to seemingly obtain more
financing.

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the persons involved,

The Norwegian authorities provided the Authority with
copies of cost claim reports which the participating under­
to the RCN three times a year
takings had to submit
including a verification
detailing the costs of the project,
the number of working hours
of
spent by each person and the cost per hour charged to
the project account. According to the explanations given
by the Norwegian authorities, these reports are signed by
the project responsible person and verified and signed by a
certified accountant at the end of the year. The Authority
has no reason to question the truthfulness of these reports
on the basis of which the beneficiary undertakings were
granted the R&D aid amounts.

Although it could be argued in general that it might be
desirable to introduce certain controls during the develop­
ment of the research projects to verify the accuracy of these
costs reports, the Authority considers that the RCN has
properly applied the provisions of the 1994 R&D Guidelines
which do not require the carrying out of any further checks.

1.4. Conclusion

establish in the

the foregoing assessment,

the Authority
On the basis of
considers that
the granting of aid to the above mentioned
R&D projects was done in compliance with the provisions of
the existing aid scheme Industrial R&D Programmes, which was
in line with the applicable R&D Guidelines. The Authority could
not
investigation
procedure that the beneficiaries of R&D aid for Project 40049
‘Strategic activities within maritime transport and logistics’, Project
138811 ‘AlgOpt’, Project 144265 ‘Shiplog II’ and Project
144214 ‘Library
in
optimisation routines
shipping’ used the aid in contravention with the scheme or of
Article 61(3)(c) of the EEA Agreement.

course of

scheduling

formal

this

for

of

Since the projects received State aid within the framework of
the scheme Industrial R&D Programmes and not individual aid,
there is no need to assess whether the aid would have been
compatible if it was granted outside the scheme,

HAS ADOPTED THIS DECISION:

Article 1

The EFTA Surveillance Authority has decided to close the
formal investigation procedure pursuant to Article 1(2) in Part
I of Protocol 3 to the Surveillance and Court Agreement
regarding R&D aid granted by the Research Council of
Norway in connection with the development of the software
programme Turborouter because it was granted in accordance
with the existing aid scheme Industrial R&D Programmes in line
with Article 61(3)(c) of the EEA Agreement and the State Aid
Guidelines on Research and Development.

Article 2

This Decision is addressed to the Kingdom of Norway.

Article 3

Only the English version is authentic.

Done at Brussels, 18 April 2007.

For the EFTA Surveillance Authority

Bjørn T. GRYDELAND
President

Kurt JÄGER
College Member