Spain ordered to recover incompatible state aid for high speed train test centre

08-spaniaThe European Commission has investigated in-depth Spanish plans to finance the full investment costs in the amount of EUR 358.6 million for the construction of a test centre for high-speed trains and related equipment near Malaga in Andalusia, CEATF. Under the plans notified by Spain to the Commission in September 2013, the public funding was to be awarded to the Spanish railway infrastructure operator, ADIF, which would own the CEATF.
The Commission’s investigation concluded that the project is not in line with EU state aid rules, because it does not meet a genuine objective of common interest. In the absence of demand for the centre’s services, the use of the CEATF facility would in practice have been limited to testing trains and equipment up to the commercially viable speeds of 320-350 km/h, for which testing centres already exist in the EU and tests are performed on commercial rail networks.
The Commission also found that, despite the public funding allocated, no private investor showed an interest in participating in the funding. In fact, the CEATF was expected to generate losses throughout its entire period of operation.
Moreover, the Commission found that the project does not contribute to the objective of promoting a sustainable development of the Andalusia region.
The public funding would thus create a distortion of competition by subsidising a new entrant in the market. On this basis, the Commission concluded that the aid was incompatible with the internal market and ordered Spain to recover from ADIF the funds which have already been disbursed to the company.

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