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State Aid

PR(07)34: ESA opens formal investigation concerning the establishment of the state owned road construction company Mesta AS

18.7.2007

The Authority has decided to open the formal investigation procedure in a case concerning   the establishment of the 100% state owned company, Mesta AS, by the Norwegian Road Administration. Mesta AS was established on 1 January 2003 in order to take over the road construction activities previously carried out within the “Production Department” of the Public Road Administration in Norway. The case was opened on the basis of a complaint alleging that Mesta AS has received state aid, by means of funding to cover restructuring costs, in the value assessment of assets, the transfer of transitional contracts to Mesta AS, and excemption of paying document duties and registration fee. 

The Authority has concerns that an exemption granted to Mesta AS from paying document duty and registration fee in respect of transfer of real estate involves state aid. Further, the Authority is in doubt whether state aid is involved in a low assessment of assets transferred to Mesta AS and in the prices at which service contracts were transferred from the previous Production Department to Mesta AS

In the opening decision, the Authority has also raised doubts as to whether state aid is involved in the amount of NOK 993.6 millionwhich Mesta AS received from the State in order to cover the costs of various pension packages in favour of employees transferred to Mesta AS as well as other restructuring costs related to moving, commuting and machine renovation. Finally, the Authority doubts whether state aid is involved in an injection of equity of NOK 512 million to cover costs for offering “compensation for salary” measures to civil servants.

The Norwegian authorities have been invited to supply the Authority with further information in respect of all of the abovementioned measures.

For further information, please contact:

Mr. Amund Utne
Director, Competition and State aid
Tel. (+32)(0)2 286 18 50; or

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

18 July 2007




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