State aid: Commission approves around €134 million of public support to promote rail transport interoperability in Czechia
The European Commission has approved, under EU State aid rules, around €134 million (CZK 3.4 billion) of additional public support to upgrade traffic management equipment for rail rolling stock in Czechia. The measure consists in the prolongation until 2022 (together with the granting of additional budget) of part of a scheme for the support of the furnishing of rolling stock with the newest European Rail Traffic Management System (ERTMS) on-board equipment, which was previously approved by the Commission. ERTMS is a safety system that ensures the compliance by trains with speed restrictions and signalling status. This system is expected to enable the creation of a seamless European railway system, and increase the safety and competitiveness of the European rail sector. As in the original scheme, the public support will take the form of direct grants to the owners or operators of railway vehicles, to be used for upgrading the existing equipment. The Commission assessed the measure under EU State aid rules, in particular the 2008 Commission Guidelines on State aid for railway undertakings. It found that the Czech measure is beneficial for the environment and for mobility as it supports rail transport, which is less polluting than road transport, while also decreasing road congestion. Furthermore, the measure is also proportionate and necessary to achieve the intended objectives, i.e. the promotion of interoperability of railway systems in the EU and supports the shift of freight transport from road to rail. Finally, the aid will have an “incentive effect” as the owners or operators of railway vehicles would not perform the necessary upgrade of their rolling stock in the absence of the public support. On this basis, the Commission concluded that the prolongation of the measure until 2022 and the additional public support are in line with EU State aid rules. More information will be available on the Commission’s competition website, in the public case register under case number SA.55861 once any confidentiality issues have been resolved.