Brussels, 14/11/2001 (Agence Europe) - The European Commission has decided to initiate detailed state aid investigation proceedings concerning aid amounting to EUR 18 million earmarked for the Renault plant in Valladolid. The planned aid was notified by Spain in December 2000 for investment in the Valladolid engine plant. The project involved investment totalling EUR 129 million for the installation of a new flexible line that can produce both petrol and diesel engines. The Spanish authorities claim that Renault could have chosen the Turkish site of Bursa instead of Valladolid for the investment. According to the rules on State aid to the motor vehicle industry, a cost-benefit-analysis must be carried out to compare, with regard to the "mobile" elements, the costs which an investor would bear in the region in question (Valladolid, in this case) with those it would bear for an identical project in a different location (Bursa), in order to determine and quantify the specific handicaps of the first location. Comparing the costs of investing in the Spanish and Romanian sites, the Spanish authorities claim that Valladolid would have a comparative disadvantage of 27.91%, and that this was sufficient to justify the planned regional aid which would amount to 14.31% of the eligible costs. However, the Spanish authorities have failed to provide sufficient evidence to convince the Commission that the investor really considered the Turkish site of Bursa as a viable alternative to Valladolid for the location of a highly automated engine construction plant. The Valladolid plant already produces engines, and the location of the additional line would benefit from relevant economies of scale and economies of skills. Moreover, at this stage the cost benefit analysis does not clearly establish the cost disadvantage of Valladolid compared to Mioveni.