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State Aid

State Aid: The Authority approves the financing of Harpa

11.12.2013

PR(13)87

Today, the EFTA Surveillance Authority approved the public financing of the activities taking place in Harpa Concert Hall and Conference Centre in Reykjavik.

Harpa is fully owned by the Icelandic State and the City of Reykjavík, and its considerable annual deficit has been covered over the state and municipality budgets.

«ESA can approve state aid to Harpa because it has a cultural purpose. I welcome that the Icelandic authorities now have put in place measures to ensure that the aid does not subsidise the commercial parts of Harpa, with a full separation of accounts between the cultural activites and the conference centre.» Ms Oda Helen Sletnes, president of the EFTA Surveillance Authority, said.

Aid to promote culture
Harpa Concert Hall and Conference Centre was opened in 2011. It is a landmark in Reykjavik, accommodating various activities such as the Icelandic Symphony Orchestra and the Icelandic Opera as well as classical, pop and rock concerts with national and international performers.

Furthermore, Harpa is meant to be a forum for all kinds of conferences, meetings and gatherings, domestic and foreign, and to strengthen the position of Iceland as a venue for international conferences. Harpa provides Icelanders with facilities that were not available in the country before, and has won awards for its architecture and concert facilities.

Other activities such as catering, restaurants, a music shop and a furniture shop are operated by private companies who rent the facilities following public tenders.

Earlier this year, the Authority found that state aid appeared to be involved in the financing of Harpa. The Authority considered that the aid could be justified as aid to promote culture, but stressed that safeguards should be introduced in order not to distort competition on the market for hosting conferences and other commercial events.

Separated accounts and allocation of costs
Following the Authority´s finding, the owners of Harpa have introduced separate accounts and new methods for allocating costs and income. Special accounts are now kept for all cultural activities and tenants, as well as the conference operations.

Moreover, the Icelandic authorities have ensured that the conference department of Harpa will have to cover its share of the building's common costs and that it will be charged market rent for office space and other facilities. According to Harpa's preliminary accounts for 2013, the conference department is expected to deliver a marginal profit and it is projected that the conference operations will become gradually more profitable, thereby providing the owners of Harpa with a return on their investment in the next couple of years.

On the basis of the above, the Authority concluded that the financing of Harpa is compatible with the state aid rules of the EEA Agreement.

The Authority began looking into this matter in late 2011 following a complaint by an interested party.

 

A public version of today's decision will be published on the Authority's website, normally within a month.

 

For further information, please contact:

Mr. Andreas Kjeldsberg Pihl
Press & Information Officer
tel. (+32)(0)2 286 18 66
mob. (+32)(0)492 900 187




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