EU probes Spain’s high-speed rail test site for state aid conflict

9 Apr 15

The European Commission has opened an in-depth investigation to examine whether the public financing of a test centre for high-speed trains in Spain is compatible with European Union state aid rules.

In September 2013, the Spanish government informed the commission that it had plans to support the construction of a railroad circuit near Malaga where engineers and manufacturers could test high-speed trains and related equipment at speeds of up to 520 km/h.
The project, called the Centro de Ensayos de Alta Tecnología Ferroviaria (CEATF), would allow research on high-speed rail technology, approval and tuning of mobile rail equipment, infrastructure and superstructure elements.
A public tender organised by the Spanish government in 2013 to select an operator for the centre for 25 years failed as no bidder expressed an interest.
Under Spain’s current plans, the project costs of €358.6m would be fully financed by the EU Regional Development Fund (ERDF) and Spain, but the commission says it has ‘doubts’ that the CEATF pursues a genuine objective of common interest.
The commission has assessed the project under its state aid rules, which allows public support for research, development and innovation projects and research infrastructures. This initial investigation found that demand for such a railway test centre seemed low and public opposition, especially on environmental grounds, appeared quite strong.
‘It is therefore doubtful that the project would further an objective of common interest. The commission also has concerns that the measure might give a selective advantage to CEATF as compared to other high speed railway testing facilities in the EU that operate without state support,’ the commission noted.
It added that the information provided by Spain so far was not sufficient to verify that the CEATF facility would be available to all potential users in the EU under open and non-discriminatory terms.
Financial projections also indicated that the project would remain vastly loss making, and it was doubtful that the public financing of the CEATF project would incentivise private investors to co-fund and share the risks of the project.
  • Judith Ugwumadu
    Judith Ugwumadu

    Judith writes about public finance, public services and economics across Public Finance International and Public Finance. She previously undertook reporting stints at Financial Adviser, Global Security Finance and The Sunday Express.

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