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Commission to rule on ‘illegal’ rail funding

Published on 27/04/2005

27 April 2005

BRUSSELS – A subsidiary of the Belgian rail company SNCB/NMBS is under investigation by the European Commission over allegations it received illegal state funding.

On Wednesday, Le Soir reported that the European Commission is looking into whether rules on fair competition have been broken by ABX, which specialises in freight travel by plane, road, air and rail.

If it is found guilty of the charges, ABX could be forced to repay almost EUR 1 billion in aid, which it received from SNCB between 1998 and 2001.

According to a confidential report leaked to Le Soir, the Commission is questioning the legality of SNCB’s purchase of the ABX network for EUR 433.8 million.

It has also asked experts to investigate EUR 512.2 million which SNCB gave the subsidiary to restructure the ailing company.

“The Commission has doubts about the compatibility of these measures with the common market,” stated the report which the Commission will consider on 3 May.

Question marks also hang over SNCB funding of EUR 157.4 million for ABX Germany, EUR 10.6 million for ABX Netherlands and EUR 220.5 million to allow the buyout of ABX France by its workers in January.

The Commission wants to know whether the injection of those funds “amounts to a normal transaction within a group”.

In total, EUR 949 million could eventually be judged to be illegal aid.

However, ABX spokesman Philippe Lantin played down the significance of the investigation, stating it was normal procedure for the Commission to check the legality of new funding.

SNCB/NMBS has already seen another of its subsidiaries ruled against by the Commission.

Back in October 2004, Sernam was ordered to pay back EUR 41 million in aid or sell the company to a private operator.

There is speculation that ABX may avoid a Commission ruling against it if it is bought out by the end of this year.

[Copyright Expatica 2005]

Subject: Belgian news