Decision 2005/842 - 2005/842/EC: Commission Decision of 28 November 2005 on the application of Article 86(2) of the EC Treaty to State aid in the form of public service compensation granted to certain undertakings entrusted with the operation of services of general economic interest (notified under document number C(2005) 2673)

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1.

Current status

This decision was in effect from December 19, 2005 until January 30, 2012.

2.

Key information

official title

2005/842/EC: Commission Decision of 28 November 2005 on the application of Article 86(2) of the EC Treaty to State aid in the form of public service compensation granted to certain undertakings entrusted with the operation of services of general economic interest (notified under document number C(2005) 2673)
 
Legal instrument Decision
Number legal act Decision 2005/842
CELEX number i 32005D0842

3.

Key dates

Document 28-11-2005
Publication in Official Journal 29-11-2005; Special edition in Bulgarian: Chapter 08 Volume 002,Special edition in Romanian: Chapter 08 Volume 002,OJ L 327M , 5.12.2008,OJ L 312, 29.11.2005
Effect 19-12-2005; Entry into force See Art 10
29-11-2006; Partial application See Art 10
End of validity 30-01-2012; Repealed by 32012D0021
Notification 29-11-2005; {titleAndReference.draft.disclaimer.new|http://publications.europa.eu/resource/authority/fd_365/titleAndReference.draft.disclaimer.new}

4.

Legislative text

29.11.2005   

EN

Official Journal of the European Union

L 312/67

 

COMMISSION DECISION

of 28 November 2005

on the application of Article 86(2) of the EC Treaty to State aid in the form of public service compensation granted to certain undertakings entrusted with the operation of services of general economic interest

(notified under document number C(2005) 2673)

(2005/842/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community, and in particular Article 86(3) thereof,

Whereas:

 

(1)

Article 16 of the Treaty requires the Community, without prejudice to Articles 73, 86 and 87, to use its powers in such a way as to make sure that services of general economic interest operate on the basis of principles and conditions which enable them to fulfil their missions.

 

(2)

For certain services of general economic interest to operate on the basis of principles and under conditions that enable them to fulfil their missions, financial support from the State intended to cover some or all of the specific costs resulting from the public service obligations may prove necessary. In accordance with Article 295 of the Treaty, as interpreted by the case-law of the Court of Justice and Court of First Instance of the European Communities, it is irrelevant from the viewpoint of Community law whether such services of general economic interest are operated by public or private undertakings.

 

(3)

Article 86(2) of the Treaty states in this respect that undertakings entrusted with the operation of services of general economic interest or having the character of a revenue-producing monopoly are subject to the rules contained in the Treaty, in particular to the rules on competition. However, Article 86(2) allows an exception from the rules contained in the Treaty, provided that a number of criteria are met. Firstly, there must be an act of entrustment, whereby the State confers responsibility for the execution of a certain task to an undertaking. Secondly, the entrustment must relate to a service of general economic interest. Thirdly, the exception has to be necessary for the performance of the tasks assigned and proportional to that end (hereinafter the necessity requirement). Finally, the development of trade must not be affected to such an extent as would be contrary to the interests of the Community.

 

(4)

In its judgment in the case of Altmark Trans GmbH and Regierungspräsidium Magdeburg v Nahverkehrsgesellschaft Altmark GmbH  (1) (Altmark), the Court of Justice held that public service compensation does not constitute State aid within the meaning of Article 87 of the Treaty provided that four cumulative criteria are met. First, the recipient undertaking must actually have public service obligations to discharge, and the obligations must be clearly defined. Second, the parameters on the basis of which the compensation is calculated must be established in advance in an objective and transparent manner. Third, the compensation cannot exceed what is necessary to cover all or part of the costs incurred in the discharge of the public service obligations, taking into account the relevant receipts and a reasonable profit. Finally, where the undertaking which is to discharge public service obligations, in a specific case, is not chosen pursuant to a public procurement procedure which would allow for the selection of the tenderer capable of providing those services at the least cost to the community, the level of compensation needed must be determined on the basis of an analysis of the costs which a typical undertaking, well run and adequately provided with means of transport, would have incurred.

 

(5)

Where those four criteria are met, public service compensation does not constitute State aid, and Articles 87 and 88 of the Treaty do not apply. If the Member...


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