EMEA News
ECA Operators to Challenge EU Over Competition Distorting State Aid
Scandlines and Stena Line are preparing for a court battle that will argue that support provided by the European Union (EU) for an undersea tunnel planned to run between Denmark and Germany, the Fehmarn Belt Fixed Link (FBFL), poses unfair competition, the Financial Times reports.
"A fixed undersea tunnel link between Rødby and Puttgarden supported by unjustified state aid creates an un-level playing field and distorts competition with the well-functioning ferry services which have been provided for many years. It also goes against the principle of shifting transport away from road," asserted Carl-Johan Hagman, CEO of Stena Line.
The EU is reported to have committed to fund 5 to 10 percent of the project cost, Germany is said to be responsible for development of land-based facilities for the FBFL, and Denmark has committed to funding €8.71 billion ($9.31 billion) for the project, including the use of state-guaranteed loans.
While the two two ferry operators say they are not opposed to competition, they do oppose the unusually long 55 year period of state guarantees.
"The idea of open-ended state aid without time limits, for a project of this magnitude, simply makes no sense," added Hagman.
"This provides the operators of the tunnel with the ability to use the state aid to dump their state-subsidised prices, thereby squeezing out competitors such as ferry operators."
While the FBFL project is reported to be expected to cut travel time between Copenhagen to Hamburg in half, the Stena Line CEO argues that the market will be better served by existing ferries.
"The existence of nine ferry routes between 14 different ports is based on established interconnectivity needs and fair competition" said Hagman.
The two ferry companies say the state guarantees will enable Denmark-based Femern A/S, set to manage the tunnel, to artificially lower its toll rates in order to "kill off" competing ferry routes.
In September, Scandlines announced that it was expecting the EU to award the company €6.3 million ($7.11 million) for the company to install scrubbers and a hybrid system on two of its new vessels that cross between Rostock and Gedser, as well as to boost environmentally friendly infrastructure at both ports.
