ANNOUNCEMENT 01 Jan 2010In January 2010, the government of Latvia announced a change in private-sector financial support.
NUMBER OF INTERVENTIONS
the letter from the EC to Latvia - Brussels, 15/06/2011 C (2011) 3052 final. Available from : < http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_N44_2010 >
On 5 February 2010, the Latvian Republic notified a public financing measure within the project Development of infrastructure on Krievu Sala for reallocation of port activities out of the city centre. The notified measure aims to address this relocation and ensure that the Freeport of Riga maintains its competitiveness within the Baltic Sea.
The direct beneficiary of the public financing under scrutiny is Riga Freeport Authority.
The project will be developed in two phases:
(a) the first phase concerns the construction of 4 dry bulk cargo berths and will be completed by 2012 (hereinafter the first phase);
(b) the second phase concerns three additional berths, for the handling of general cargo, which will be constructed by 2015 (hereinafter the second phase).
The total eligible costs of the two phases amount to EUR 195 380 916. As far as first phase of the project is concerned, the eligible costs are to be financed by means of the Cohesion Fund contribution up to approximately 61.2%, i.e. EUR 91 325 093. The remaining will be ensured by means of own resources of the port authority. The eligible costs of the second phase amount to EUR 46 171 655, with a public financing up to EUR 28 062 565.
The commission found that the measure constitutes State aid within the meaning of Article 107 (1) TFEU and gave the following assessment:
Riga Freeport is currently one of the leading ports on the Baltic Sea. In terms of total throughput, Primorsk and St. Petersburg are the primary ports in the East Baltic Sea region, followed by Klaipeda, Tallinn and Ventspils. In terms of dry bulk and general cargo handling Riga Freeport's main competitors are Hamina, Helsinki, Kotka (Finland), Kaliningrad, St. Petersburg, Ust -Luga (Russia), Tallinn (Estonia), Ventspils and Liepaja (Latvia). Klaipeda (Lithuania), Gdansk, Gdynia (Poland). Of these Riga, St. Petersburg, Klaipeda, Ventspils and most recently Ust-Luga ports are the largest in terms of dry bulk cargo turnover.
According to the Latvian authorities, in terms of dry bulk cargo handling operations the FR is a leading port with a market share of 43%. At the same time, in terms of general cargo FR market share is rather small (5.2%) and in 2008 decreased by 14.5% in comparison with 2007. The Commission thus considers that the aid in question is capable of affecting competition and intra-Union trade.' (par. 79-81 of the letter from the EC to Latvia - Brussels, 15/06/2011 C (2011) 3052 final)
According to the Commission, the notified measure relating to financing of the project Development of infrastructure on Krievu Sala for relocation of port activities out of the city centre is compatible with the internal market under Article 107(3)(c) TFEU.
A state measure in the GTA database is assessed solely in terms of the extent to which its implementation affects the extent of discrimination against foreign commercial interests. On this metric, the state aid proposed here is discriminatory.