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State Aid

PR(09)67: The Authority concludes state aid investigation concerning the establishment of Mesta AS

7.10.2009

The Authority today closed the formal investigation procedure opened on the basis of a complaint on 18 July 2007 in respect of the establishment of Mesta AS.

Mesta AS is a fully state owned Norwegian road construction company which was established on 1 January 2003 for purposes of taking over the road construction activities previously carried out within the “Production Department” of the Public Road Administration in Norway. The Authority has investigated whether Mesta AS received state aid by means of (i) public funding for restructuring costs; (ii) a below market value assessment of assets; (iii) over-priced transitional contracts; and finally (iv) by means of an exemption from paying document and registration duties in relation to the transfer of ownership of real estate.

The Authority's decision entails that the Norwegian government should recover the part of the state aid which is not compatible with the EEA Agreement, i.e. parts of the restructuring costs, the over-compensation for the operation and maintenance contracts and the exemption from document duty and registration fee. It is for the Norwegian Government to calculate and recover the incompatible aid.

As regards the restructuring costs (i), the Authority concludes that the Norwegian State granted state aid worth NOK 993.6 million for costs consisting of early pension packages, temporary maintenance of the entitlements to civil servant pension and special (early) retirement age as well as a variety of other measures, such as employees' moving and commuting costs and the costs of transfer of archives. In addition to this, the Authority found that state aid worth NOK 150 million has been granted to Mesta AS in the form of equity as a means to finance the costs of offering “compensation for salary”. Except for certain costs relating to moving, commuting and transfer of archives, the Authority concludes that the restructuring aid is compatible with the EEA Agreement since the measures allowed for the opening up of the national road services market to competition.  

As regards the assessment of assets (ii), the Authority concludes that no state aid was involved. The Authority has thoroughly examined the auditor reports and has not found reason to doubt the method that was applied for the evalution of assets in the final opening balance of Mesta AS.

The transitional contracts (iii) transferred to Mesta AS were both construction contracts and operation and maintenance contracts for carrying out work on behalf of the Public Road Administration. As regards the construction contracts the Authority concludes that they were transferred to Mesta AS at market value. As regards the operation and maintenance contracts the Authority has found that Mesta AS was entrusted with a public service obligation within the meaning of Article 59(2) of the EEA Agreement. Following a verification of the level of the compensation to Mesta AS for the services provided, the Authority concludes, however, that Mesta AS was over-compensated with NOK 66.4 million.

Finally, the Authority concludes that the exemption granted to Mesta AS from paying document duty and registration fee in respect of the transfer of ownership of real estate involved state aid which cannot benefit from any of the exemptions in the EEA Agreement.

 For further information, please contact:

Per Andreas Bjørgan
Director, State aid and Competition Directorate
tel. (+32)(0)2 286 18 36,  or

Lena Sandberg-Mørch
Senior Officer, State aid and Competition Directorate
tel. (+32)(0)2 286 18 69

 

Brussels, 7 October 2009

 





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