#StateAid: Operator of Polish A2 motorway ordered to repay ~€210 million of undue compensation to Polish State

On 25 August 2017, the Commission ordered the operator of the Polish A2 Świecko to Warsaw motorway, Autostrada Wielkopolska S.A. (AWSA), to repay PLN 895 million (approximately €210 million) of undue compensation to the Polish State.

 

Seasoned State Aid aficionados may well recall that this is not the first time that the Polish motorway network has featured in a European Commission State Aid investigation.

In December 2013, the Commission concluded that the compensation for the concession holder of the Polish A4 motorway Katowice – Krakow involved no State aid (case N 541/2010).  While the basic principles of the compensation mechanism were the same as in the present case, the Commission stressed in its press statement that its actual application did not raise any competition concerns in the case of the A4 motorway.

To unpick the threads of this decision, it is necessary to take ourselves back to findesiècle Brussels and the original so-called “Eurovignette” Directive 1999/62/EC on the charging of heavy goods vehicles for the use of transport infrastructure, notably roads.

In 2005, Poland brought its national law in line with the Directive by amending the national legislation on toll motorways by exempting heavy goods vehicles with a valid vignette from the obligation to pay motorway tolls, whereas previously they were subject to a double charge in paying toll and vignette fees.

The Polish authorities decided to compensate motorway operators for their resulting loss and agreed compensation for each operator on an individual basis. In AWSA’s case, instead of using the most up-to–date study from 2004, AWSA relied on a study from 1999. The 1999 study had estimated a significantly higher level of traffic and revenue and thus led to higher expected profitability.

The Commission’s in-depth investigation opened in June 2014 confirmed that AWSA was entitled to receive compensation under its concession agreement with Poland to restore its expected financial situation to just before the change of Polish law in 2005.

 

However reliance by the Polish authorities on an outdated study on traffic and revenues was used which led to an over-estimation of the revenues AWSA would have lost.  The difference between the compensation actually paid and the estimates based on the updated 2004 figures amounts to an undue economic advantage to AWSA, in breach of EU State aid rules.

This is because the financial compensation actually paid to AWSA went beyond the direct effects of the legislative change and improved its expected financial situation. Accordingly, the Commission has therefore ordered the undue compensation to be repaid amounting to PLN 895 million (around €210 million), plus interest.

The non-confidential version of the decision will be made available under the case number SA.35356 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved.