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European Commission opens investigation into Naples Port Authority and Italian shipyard Cantieri del Mediterraneo

The European Commission has opened an investigation into grants worth €44 million that were given to the Port of Naples by the Italian government.30 Jun 2016

The investigation will look into whether the grants were in line with EU state aid rules, the Commission said.

The money was used to renovate dry docks, which the port authority rented to shipbuilding and repair company Cantieri del Mediterraneo (CAMED) on a 30-year concession.

The Commission's preliminary view is that both the port authority and CAMED benefited from the grants, as there was no tender for the use of the dry dock and CAMED was able to use the facilities at a price that was potentially below market rates, it said.

"This may have given both companies an economic advantage over their competitors and therefore involve state aid within the meaning of the EU rules," the Commission said.

The aid may be found to be compatible with EU state aid rules if it "furthers an objective of common interest, such as the provision of quality public services at affordable prices, without unduly distorting competition in the single market", but at this stage the Commission "doubts that the ship repair service can qualify as a service of general economic interest", it said.

Competition law expert Neale McDonald of Pinsent Masons, the law firm behind Out-Law.com, said: "The opening of an in-depth investigation in this case emphasises the importance of assessing state aid risk with reference to all possible beneficiaries – which, in infrastructure projects, typically means the owner, the operator and the user of the asset."

The Commission opened an investigation in January into reductions in compensation payments that were granted by the port of Antwerp to two container terminal operators.

The Port of Antwerp is managed by the Antwerp Port Authority and fully-owned by the city of Antwerp. The authority makes land available to companies to operate in the port area through concession agreements, the Commission said at the time.

The concession agreements for two container terminal operators, PSA Antwerp and Antwerp Gateway included a minimum number of containers that must be handled each year. When the two companies did not reach this minimum between 2009 and 2012 they were due to pay compensation to the authority. However, the authority retroactively reduced the minimum requirement, thereby reducing the compensation to be paid, the Commission said.  

Following a complaint from a competitor, the Commission opened an in-depth investigation to examine whether a private investor would have reduced its compensation in this way.

In March, the Commission proposed to exempt state investment aid to port and airports from scrutiny under EU state aid rules, and asked for feedback on the extension of general block exemption regulation (GBER) to cover ports and airports, as part of the state aid modernisation (SAM) initiative. The consultation closed at the end of May.

SAM is designed to make it easier to grant aid that "contributes to a more dynamic and competitive single market", and the existing GBER allows EU countries to grant some aid without applying for authorisation. This "cuts red tape for projects that are unlikely to distort competition and allows for well-defined projects to go ahead as fast as possible. It also allows the Commission to focus its efforts on more distortive types of aid", the Commission said.