Brussels, 03/01/2008 (Agence Europe) - On 21 December 2007, the European Commission published draft guidelines on state aid to railway undertakings (see EUROPE 9479). The draft is open for consultation by Member States and stakeholders and may allow certain railway company debts to be absorbed by the state. The Commission aims to adopt these Community Guidelines during the first six months of 2008.
Renewal of rolling stock for passenger transport. The guidelines published on Friday would allow the granting of regional aid for the purchase and renewal of the rolling stock for passenger transport by removing a prohibition included in the guidelines regarding regional aid for the period 2007-2013. The Commission comments that 'such aid could favour the modernisation of the railway transport, in particular in the new Member States'.
Restructuring rail companies. The guidelines suggest that restructuring aid could be granted for firms in difficulty in the event that a freight division of a railway undertaking faces severe economic difficulties and cannot be restructured with the help of the railway undertaking in question. Account would also be taken of the situation of freight railway undertakings which have recently been hived off within larger railway groups. The proposed text includes certain conditions under which debt write-off can be considered compatible with the common market.
Aid for transport coordination. The draft guidelines propose a methodology to assess the compatibility of aid favouring the use of railway infrastructure, the reduction of external costs, interoperability, security and research in the railway sector. In addition, the text codifies the Commission's practice concerning possible elements of aid in public service contract, for the transition period until the entry into force of the PSO (Public Service Obligation) Regulation, adopted in October 2007 (see EUROPE 9505).
Finally, the guidelines address the issue of the guarantee which railway undertaking still benefit from in several Member States. In general, unlimited state guarantees constitute state aid and are not compatible with the EU Treaty - the guidelines put forward an agenda to abolish unlimited state guarantees in the railway industry by January 1 2010. The Commission will now undertake consultations with Member States and stakeholders, which have until 25 January 2008 to provide the Commission with their comments. The draft guidelines can be found in all official EU languages at: http: //ec.europa.eu/dgs/energy_transport/state_aid/consultation_ms_en.htm (A.By.)