Margrethe Vestager derails Spain’s plan for high-speed trains

Commission says there is no market for super-high-speed trains and orders €141 million be recouped.

Margrethe Vestager on Monday ordered the Spanish government to scrap plans for a testing center for high-speed trains and to recoup €141 million of covert state aid that it had already paid out.

According to the competition commissioner: “There does not appear to be any interest in the market to develop products that run at such high speeds,” adding that public funding would “create a distortion of competition by subsidizing a new entrant in the market.”

Europe’s state aid regulator rubbished the Spanish government’s arguments that the investment — an estimated €357 million — would stimulate employment and economic development in Andalucia, one of Europe’s poorest regions. The project “would only have had limited short-term effects by creating temporary jobs in the construction sector,” it said.

The Commission added that the €141 million of state aid already paid out was only uncovered following an inquiry.

The Spanish authorities have been given a hard time by EU regulators of late.

Last month Vestager said Spain had to recover millions that had been illegally channeled to football teams including Real Madrid, Barcelona and Valencia. Spain has also had to claw back money handed to its largest companies through tax breaks, as well as subsidies channeled to its shipyards and even a film-making hub near Alicante.

The Spanish government informed the Commission in 2013 that it planned to draw on national and EU funds to build a test center for trains running up to 520 kilometers per hour. It omitted to mention that it had already started funding the project via the national railway infrastructure company.

The market for such trains does not exist, the Commission said, saying market operators did not consider trains traveling at more than 350 kph to be commercially viable.

The Commission’s competition and state aid regulators are carefully scrutinizing Europe’s railway sector, with ongoing probes into the Lithuanian, Czech and Portuguese incumbents.

Click Here: habitat tord boontje