State aid: Commission launches in-depth investigation into public service delegation contracts for maritime services to Corsica

The European Commission has launched an in-depth investigation to determine whether the public service delegation contracts for maritime services to Corsica awarded in June 2019 are in line with EU State aid rules.

Maritime services between Corsica and mainland France run between three mainland ports (Marseille, Toulon and Nice) and five ports in Corsica (Ajaccio, Bastia, Porto-Vecchio, Propriano and Ile Rousse). The French authorities awarded Corsica Linea three public service delegation contracts for the routes between Marseille and Ajaccio, Bastia and Ile Rousse, for the period from 1 October 2019 to 31 December 2020.

The Commission’s investigation

The Commission takes the preliminary view that these three contracts constitute State aid since, at this stage, they do not meet any of the cumulative criteria for excluding State aid set by the European Court of Justice in its judgment in the Altmark case.

Furthermore, the Commission has not yet ruled out that the public service compensation received by Corsica Linea may give it an undue advantage over its competitors, in breach of the EU rules on services of general economic interest (SGEI).

The Commission has doubts, in particular, with regard to:

• whether the scope of the three contracts awarded meets a genuine public service need. In particular, the Commission doubts the necessity of including passenger transport in the public service contracts, given the presence on the market of a significant source of commercial supply from the neighbouring port of Toulon.
• the obligations in the public service contract that do not appear to be necessary or proportionate to the provision of public maritime services: (i) the requirement for a specific type of fleet to be used on certain routes; (ii) the automatic exclusion of Toulon and Nice as possible mainland home ports for public service.
• whether the compensation parameters could lead to the over-compensation of Corsica Linea as a result of a misallocation of costs between the company’s public service and commercial activities.
• whether the award procedure for the three contracts complied with EU rules on public procurement, since France was able to apply selection criteria and technical specifications differently for the various tenderers.

The Commission now intends to investigate whether or not its initial concerns are justified. The launch of an in-depth investigation gives France and all interested parties the opportunity to put forward their comments on the measures in question.

Background

The compensation granted under public service contracts for maritime cabotage is assessed in the light of the EU rules on services of general economic interest (SGEI). These rules have been clarified by the two judgments of the General Court of the European Union of 1 March 2017 in cases T-366/13 (in French) and T-454/13 relating to public service compensation granted in respect of maritime services to Corsica for the 2007-2013 period.

The non-confidential version of the decision will be published under number SA.49207 in the State aid register on the Commission’s Competition website, once any confidentiality issues have been resolved. New publications of State aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.