EFTA SURVEILLANCE AUTHORITY DECISION

No 205/11/COL

of 29 June 2011

on the Supplementary Agreement on the Hurtigruten service (Norway)

THE EFTA SURVEILLANCE AUTHORITY (‘楾HE AUTHORITY‘�,

HAVING REGARD to the Agreement on the European Economic Area (‘the EEA Agreement‘�, in particular to Articles 59(2), 61 and Protocol 26,

HAVING REGARD to the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice (‘the Surveillance and Court Agreement‘�, in particular to Article 24,

HAVING REGARD to Protocol 3 to the Surveillance and Court Agreement (‘Protocol 3‘�, in particular to Article 1(2) of Part I and Articles 7(5) and 14 of Part II,

HAVING REGARD to the consolidated version of the Authority‘檚 Decision No 195/04/COL of 14 July 2004 on the implementing provisions referred to under Article 27 of Part II of Protocol 3 (‘the Implementing Provisions Decision‘� (1),

HAVING called on interested parties to submit their comments pursuant to those provisions (2),

Whereas:

I. FACTS

1. PROCEDURE

By letter dated 28 November 2008 (Event No 500143), the Norwegian authorities informed the Authority about the renegotiation of the agreement between the Norwegian authorities and Hurtigruten ASA on acquisition of transport services between Bergen and Kirkenes in Norway.

After various exchanges of correspondence (3), by letter dated 14 July 2010 the Authority informed the Norwegian authorities that it had decided to initiate the formal investigation procedure laid down in Article 1(2) of Part I of Protocol 3 in respect of the additional payments to Hurtigruten in 2008.

The Authority‘檚 Decision No 325/10/COL to initiate the procedure (‘the opening decision‘� was published in the Official Journal of the European Union and the EEA Supplement to it (4). The Authority called on interested parties to submit their comments on the decision. The Authority did not receive any third party comments.

By letter dated 30 September 2010 (Event No 571486) the Norwegian authorities forwarded their comments on the opening decision (Event No 563570). Subsequent emails with additional information were sent by the Norwegian authorities on 20 April 2011 (Event No 595326), on 4 May 2011, (Event No 596802) and on 6 May 2011 (Event No 597151).

2. BACKGROUND ‘�THE HURTIGRUTEN AGREEMENT

Hurtigruten ASA operates maritime transport services consisting of the combined transport of persons and goods along the Norwegian coastal line from Bergen to Kirkenes, serving 34 ports of call on a daily basis throughout the year.

The operation of the service for the period 1 January 2005 to 31 December 2012 was the subject of a tender procedure initiated in June 2004. Ofotens og Vesteraalens Dampskipsselskap ASA and Troms Fylkes Dampskipsselskap (‘the Hurtigruten companies‘� (5) were the only bidders and signed a contract with the Norwegian authorities on 17 December 2004 (‘the Hurtigruten Agreement‘�. The two companies merged in March 2006 to form the entity now operating the service, Hurtigruten ASA (‘楬urtigruten‘�. The Hurtigruten Agreement signed in 2004 was not notified to the Authority and has not, as such, been subject to any assessment under the state aid rules of the EEA Agreement by the Authority.

Under the Hurtigruten Agreement, Hurtigruten provides for daily services at 34 predetermined ports of call throughout the year, based on a fixed schedule, capacity based on the requirement to operate the route with 11 vessels approved by the Norwegian authorities in advance and maximum prices as regards the distance passenger routes. Hurtigruten is free to set its prices for roundtrips, cabins, catering and the transport of cars and goods.

For the services covered by the Hurtigruten Agreement, the Norwegian authorities pay a total compensation of NOK 1 899,7 million for the eight years of duration of the agreement, expressed in 2005 prices:

The payments are adjusted according to a price index clause in Article 6.2 of the Hurtigruten Agreement, taking into account the price of marine gas oil, salary costs in the marine sector and NIBOR (6).

According to the Norwegian authorities, Hurtigruten is obliged to keep separate accounts for the company‘檚 services on the Bergen-Kirkenes route and for the activities that are not part of this route, but there is no obligation on Hurtigruten in the current agreement to keep separate accounts for the public service obligation part of the Bergen-Kirkenes route and the commercial part of the same route.

In addition to the service covered by the Hurtigruten Agreement, Hurtigruten is a commercial operator and offers round trips, excursions, and catering on the route Bergen-Kirkenes. Moreover, in connection with this route, Hurtigruten also provides transport services in the Geiranger fjord, outside the scope of the Hurtigruten Agreement. Furthermore, Hurtigruten operates a number of different cruises in different European states, Russia, Antarctica, Spitsbergen and Greenland.

On 30 June 2010, the Norwegian authorities initiated a tender procedure on the route between Bergen and Kirkenes for the period of eight years as of 1 January 2013 at the latest. The Norwegian authorities informed the Authority that a new contract for the provision of the service from 1 January 2012 to 31 December 2019 was signed on 13 April 2011 with Hurtigruten. This contract is not assessed in the current decision.

3. DESCRIPTION OF THE THREE MEASURES UNDER ASSESSMENT

3.1. The three measures

The Norwegian authorities have explained that on 27 October 2008, the Norwegian authorities and Hurtigruten concluded an agreement on the basis of which the state‘檚 payment for the provision of the transport services between Bergen and Kirkenes was increased as follows (hereinafter referred to collectively as ‘the three measures‘�:

3.2. The renegotiation of the Hurtigruten Agreement

3.2.1. The renegotiation clause

Article 8 of the Hurtigruten Agreement contains a revision clause, whereby both parties may initiate a renegotiation procedure. The revision clause reads as follows (translation by the Authority):