EU probes aid for Polish Regional Railways

The EU’s executive said it was concerned that the company, in which Poland’s state-owned Industrial Development Agency acquired a majority stake in 2015, may already have received help from public coffers in the past.

EU rules allow a company to receive restructuring aid only once in ten years.

Competition concerns

EU Commissioner Margrethe Vestager, in charge of competition policy, said: "Polish Regional Railways has already benefitted from state support in the past. We need to assess whether the aid received is compatible with EU state aid rules and make sure that public support does not lead to distortions of competition in this market."

In September 2015, Poland notified the European Commission of restructuring aid granted to Polish Regional Railways (Przewozy Regionalne) worth PLN 770 million (around EUR 181 million), according to the EU’s executive.

‘One time, last time’

Under EU state aid rules, companies in financial difficulty can receive restructuring aid only once over a period of 10 years -- the so-called "one time, last time" principle.

The Commission says that the aim of the rules is to avoid a situation in which struggling firms rely on public funding to stay in business, instead of improving business performance and competing on their merits.

Polish Regional Railways is the largest passenger regional rail operator in Poland and the sole provider of public passenger rail transport in seven out of 16 regions, the European Commission noted.

“The company has been in financial difficulties for some time. In 2015, the state-owned Industrial Development Agency paid PLN 770 million to acquire a majority stake in Polish Regional Railways. Polish Regional Railways used the proceeds from this equity investment to repay its debts and finance restructuring,” the European Commission said.

(pk/gs)

Source: europa.eu/PAP