17.10.2013

EN

Official Journal of the European Union

L 276/8

(1)

By letter dated 11 August 2006, the Authority received a complaint (‘渢he complaint‘� from Konkurrenten.no AS (‘渢he complainant‘� alleging that the Norwegian authorities had granted state aid to AS Oslo Sporveier and AS Sporveisbussene. The letter was registered by the Authority on 16 August 2006 (Event No 384017). By letter dated 17 August 2006 to the complainant, the Authority acknowledged the receipt of the complaint (Event No 384134).

(2)

By letter dated 7 September 2006, the Authority forwarded the complaint to the Norwegian authorities and invited them to comment (Event No 387163). By letter dated 11 October 2006, the Norwegian authorities replied to the information request. The letter was registered by the Authority on 19 October 2006 (Event No 392725).

(3)

By letter dated 20 October 2006, the complainant submitted further comments. The letter was registered by the Authority on 23 October 2006 (Event No 394520).

(4)

By letter dated 29 November 2006, the Authority requested further information from the Norwegian authorities (Event No 394397). The Norwegian authorities replied by letter dated 11 January 2007. The letter was registered by the Authority on 12 January 2007 (Event No 406541).

(5)

By letter dated 19 June 2007, the Authority requested further information from the Norwegian authorities (Event No 425271). The Norwegian authorities replied by letter submitted electronically on 16 August 2007 (Event No 434326).

(6)

By e-mail dated 20 February 2008, the complainant submitted further information (Event No 466226).

(7)

By letter submitted electronically on 2 April 2008, the Authority requested yet further information from the Norwegian authorities (Event No 471926). The Norwegian authorities replied by letter submitted electronically on 29 April 2008 (Event No 475480).

(8)

The complainant submitted further information by e-mails dated 25 May 2008 (Event No 478132), 2 June 2008 (Event No 479743), 9 July 2008 (Events No 489623 and 489626), 14 August 2008 (Event No 489591), 15 August 2008 (Event No 488527), 20 January 2009 (Event No 505210) and 22 January 2009 (Event No 505503).

(9)

During the beginning of 2010, the Authority and the Norwegian authorities had informal contact both via telephone and e-mail regarding the case. Information received by the Authority in this context was consolidated in a letter submitted to the Authority electronically on 21 April 2010 by the Norwegian authorities (Event No 554417).

(10)

On 21 June 2010, the Authority adopted Decision No 254/10/COL closing the case on the grounds that the aid involved existing aid that had ceased. By letters dated 21 June 2010, the Authority forwarded copies of Decision No 254/10/COL to the Norwegian authorities (Event No 558824) and the complainant (Event No 561949).

(11)

By application lodged at the Registry of the EFTA Court on 2 September 2010, the complainant brought an action for annulment of the Authority‘檚 Decision No 254/10/COL.

(12)

On 22 August 2011, the EFTA Court rendered its judgment in Case E-14/10 Konkurrenten.no AS v EFTA Surveillance Authority, annulling Decision No 254/10/COL in its entirety, for the following reasons.

(13)

Firstly, the EFTA Court found that the Decision was inadequately reasoned, in that the Authority had failed to explain how the renewal of the concession, as of 1 January 2000, could be classified as part of an existing aid scheme, or why it could not be considered to be a relevant alteration of that aid scheme (2).

(14)

Secondly, the EFTA Court held that the Authority had infringed its obligation to open the formal investigation procedure in respect of aid granted during the period 1997 ‘�2000. It found that the Authority could not exclude the possibility that AS Oslo Sporveier and AS Sporveisbussene had received aid in excess of the losses associated with discharging the public service obligations, and that the Authority indeed considered that such overcompensation could have possibly occurred in the past. Thus, the EFTA Court concluded that the Authority should have opened the formal investigation procedure in order to become, to the extent possible, fully informed of the facts. The applicant‘檚 plea addressing the same issues with regard to the period 2000 ‘�2008 was also declared well founded (3).

(15)

Thirdly, the EFTA Court held that the Authority had failed to identify whether the capital injection only concerned unfunded pension liabilities that arose in connection with the discharge of public service obligations, or also covered other activities. As the EFTA Court could not review the Decision in relation to the applicant‘檚 claim that the capital injection did not correspond to a payment for transport services provided, this amounted to a lack of reasoning (4).

(16)

The complainant has alleged that the following measures may involve unlawful state aid:

(17)

The Authority commenced a reassessment of the complaint, and by e-mail dated 25 October 2011 to the Norwegian authorities (Event No 613053) requested additional information. The Norwegian authorities responded in a telephone conference on 28 October 2011. Additionally, the Norwegian authorities provided further information in meetings in Oslo on 29 November 2011 and in Brussels on 9 December 2011 and 17 January 2012. By e-mails of 13 December 2011 (Event No 621639) and 20 January 2012 (Event No 622816), the Norwegian authorities submitted further information.

(18)

By letter dated 27 January 2012 (Event No 622888), the Authority requested further information from the Norwegian authorities (6). The Norwegian authorities responded by letter dated 22 February 2012 (Events No 625908, 625916, 625949, 626065 and 626066) and e-mails of 5 March 2012 (Events No 627096 and 627097).

(19)

By Decision No 123/12/COL of 28 March 2012 (‘渢he opening decision‘� the Authority initiated the formal investigation procedure laid down in Article 1(2) of Part I of Protocol 3 in respect of the potential aid to AS Oslo Sporveier and AS Sporveisbussene. By letter of the same date (Event No 627869), the Authority informed the Norwegian authorities of its decision and invited them to submit comments.

(20)

By letter dated 4 June 2012 (Event No 636738), the Norwegian authorities submitted comments to the opening decision. By e-mail of 28 June 2012 (Event No 639422), the Authority requested further information. By e-mail of 7 September 2012 (Event No 645982), the Norwegian authorities responded. By e-mails exchanged between 9 and 23 November 2012 (Events No 653229, 653257, 653526, 654300, 654332, 654345 and 654470), the Authority requested and received, from the Norwegian authorities, further information.

(21)

The opening decision was published in the Official Journal of the European Union and the EEA Supplement to it (7). The Authority called on interested parties to submit their comments on the opening decision. The Authority received comments from two interested parties. By letter dated 2 August 2012 (Event No 643450), the Authority received comments from the complainant, Konkurrenten.no AS. By letter dated 6 August 2012 (Event No 643459), the Authority received comments from Risdal Touring AS, a sister company of the complainant. By letter dated 4 September 2012 (Event No 645575), the Authority forwarded those comments to the Norwegian authorities. By letter dated 3 October 2012 (Event No 648581), the Norwegian authorities informed the Authority that they had no comments to the observations from the two interested parties.

(22)

The Norwegian authorities confirmed that AS Oslo Sporveier had not granted any guarantees (8). Therefore, the Authority concluded that the allegation of the complainant concerning the guarantees were without object (9).

(23)

The Authority did however have doubts concerning the remaining measures covered by the complaint. Therefore, it decided to initiate the formal investigation procedure with regard to the following three measures:

(24)

At present, the local bus transport sector is regulated by the Commercial Transport Act of 2002 (the ‘淐TA‘� (10) and the Commercial Transport Regulation of 2003 (the ‘淐TR‘� (11). The CTA repealed and replaced the Transport Act of 1976 (12). The CTR repealed and replaced two regulations (13).

(25)

The Norwegian authorities have confirmed that the relevant provisions have not been significantly altered since the entry into force of the EEA Agreement in 1994.

(26)

In Norway, the responsibility for providing local public transport services is conferred on the counties. However, the counties are not under any obligation to offer such services.

(27)

The counties can either administer local bus transport services through their own organisation or through an administrative company (14) set up by the county. The CTA provides that when the county sets up an administrative company, the funds intended for the financing of the local bus transport services will be allocated to that company (15). The administrative companies can either obtain the bus transport services from a third party, or provide the services themselves.

(28)

The counties partly finance the local transport services with tax revenue. In addition, under the CTA the counties receive state funding by way of annual block grants (16). The amount of the grants is determined on the basis of the extent to which the counties need contributions from the State. Therefore the counties have to provide the Ministry of Transport with budgets, accounts and other relevant information necessary to assess the need for contributions (17). The Norwegian authorities have stated that in the event that a county reduced the amount of the block grant used for the financing of local scheduled transport costs, this would have consequences for future grants.

(29)

Under the CTA, concessions are required to carry out passenger transport services by bus for remuneration (i.e. for payment by the users (the passengers) of the transport services) (18).

(30)

Both a general and a special concession are needed for operators of scheduled passenger transport services by bus for remuneration.

(31)

Undertakings providing passenger transport services for remuneration must have a general concession (19). In order to obtain a general concession, the applicant must (i) provide a certificate of good conduct, (ii) have satisfactory financial means and abilities, and (iii) have satisfactory professional qualifications (20). General concessions are not time limited (21).

(32)

In addition to the general concession, any undertaking wishing to carry out scheduled passenger transport for remuneration must have a special concession (22). There are two types of special concessions: (i) area concessions, and (ii) route specific concessions. The area concession is of a residual nature, in that it permits its holder to operate scheduled bus transport services in the entire area covered, in so far as other route specific concessions have not been granted in the area. The holder of a route specific concession is the sole entity entitled to operate scheduled bus transport on that route.

(33)

The special concession confers upon the concessionaire both a right and a duty to carry out the transport service as set out in the concession (23). When applying for a special concession, a proposal for a transportation schedule and tariffs must be submitted (24). Schedules and tariffs are subject to the control of the counties (25). The counties can order changes in the schedules and tariffs (26).

(34)

The special concessions can either be awarded (i) through tender procedures (granted for the period determined in the tender procedure (27), which in any event will not be for a longer period than 10 years (28)), or (ii) directly without the use of a tender (granted for a 10 year period) (29).

(35)

The concessionaires must deploy ticketing systems approved by the counties (30).

(36)

To complement the concessions, the counties may enter into contracts with the concessionaires about the provision of the public service. The counties are free to determine the form of these contracts (31).

(37)

The counties are responsible for compensating the concessionaires (32). Compensation is only granted to undertakings that operate unprofitable routes (i.e. where the revenue generated from the sale of tickets does not cover the cost of operating the service).

(38)

According to the Norwegian authorities, under Article 22 CTA the county is under the obligation to compensate the operators for the provision of the transport service on unprofitable routes it wishes to establish or maintain within its region (33). The counties are free to determine the manner in which the concessionaires are to be compensated; the CTA and the CTR do not have any particular provisions on how the compensation is to be provided.

(39)

The Authority understands that Article 22 CTA is read as allowing for compensation to cover the cost of the public service (including a reasonable profit) minus the ticket revenues, and that compensation beyond that could not be based on the CTA.

(40)

In response to the opening decision, the Norwegian authorities have provided more information on the history of the system of compensation for local scheduled transport services.

(41)

The Norwegian authorities have explained that the State (the Ministry of Transport) at the time of the entry into force of the Transport Act of 1976 (34) was responsible for local scheduled transport services. State transport agencies managed the local scheduled transport in each county.

(42)

Shortly after the entry into force of the Transport Act of 1976, a de-centralisation process was initiated. From 1 January 1979, the powers of the Ministry of Transport could be delegated to the county. At the same time, the State transport agencies were turned into county administrative bodies.

(43)

In 1981, with the introduction of Article 24a to the Transport Act of 1976, by providing funding to the counties, the State could confer the responsibility for financing local scheduled transport to the counties (35). In Oslo, Article 24a became applicable in 1983, when Oslo Municipality (which is also a county) (36) first received such funding.

(44)

Another important element of the de-centralisation process was the Regulation of 19 December 1980 on compensation for providing local scheduled transport (‘渢he 1980 Regulation‘�. Article 1 of the 1980 Regulation states that the county has the responsibility to finance local scheduled transport. Pursuant to Article 3, the amount of the compensation shall be decided on an annual basis, based on the difference between estimated income according to the decided tariffs and discounts, and reasonable costs.

(45)

The 1980 Regulation also contains rules on control and access to information and clarifies the roles of, on the one hand, the Ministry of Transport and, on the other, the counties. Article 7 provides the legal basis for the Ministry to issue further rules and guidelines for the compensation of local scheduled transport.

(46)

On 1 January 1983, the 1980 Regulation was replaced by the entry into force of a new regulation ‘�Regulation of 2 December 1982 on compensation for providing local scheduled transport (‘渢he 1982 Regulation‘�. Article 4 of the 1982 Regulation imposes the obligation on the counties to enter into agreements with the concessionaires on the compensation for the provision of the scheduled public transport. On this basis, the organisation KS (the Norwegian Association of Local and Regional Authorities) and the Norwegian Association of Bus Companies (‘渢he NABC‘� (37), concluded a standard main agreement (‘渢he KS and NABC Standard Main Agreement‘� and a standard yearly compensation agreement to be used by each county when concluding agreements for the provision of scheduled bus transport services. As regards the calculation of the compensation, the standard agreement was based on the same principles as Article 3 of the 1980 Regulation. The standard main agreement also provided for a separation of costs between the public transport services and other commercial services.

(47)

With the adoption of a new income system for the counties, a new Regulation on Compensation for Local Transport was adopted in 1985 (‘渢he 1985 Regulation‘�. The new income system for the counties (and municipalities) entailed that the central contribution for local transport was given as a lump sum. The main focus of the 1985 Regulation was the relationship between the Ministry of Transport and the counties. The 1985 Regulation was repealed on 1 January 1987.

(48)

As noted above, the responsibility for providing local scheduled public transport services is conferred on the counties.

(49)

Before 1994, all public transport administration in Oslo was carried out by AS Oslo Sporveier (38), as Oslo Municipality has delegated to the company the task of planning and administering public transport in Oslo (39). At the same time, AS Oslo Sporveier operated an in-house department (40) carrying out most (41) of the scheduled bus transport in Oslo. This activity was carried out on the basis of an area concession awarded on 16 November 1992, permitting AS Oslo Sporveier to operate scheduled bus transport services in the entire Oslo grid, in so far as other route specific concessions had not been granted.

(50)

The concession was granted for a 10-year period, with retroactive effect from 1 January 1990.

(51)

Additionally, since 1994, AS Oslo Sporveier operated small-scale tour bus services outside its public service remit.

(52)

On 23 April 1997, the bus department, including the small tour bus division, separated from AS Oslo Sporveier and transferred to a newly established company, AS Sporveisbussene. Since then AS Sporveisbussene carried out the scheduled local bus transport in accordance with the concession awarded to AS Oslo Sporveier.

(53)

The companies entered into a Transport Agreement, signed on 23 April 1997, with retroactive effect from 1 January 1997 (‘渢he Transport Agreement‘�. The Transport Agreement was due to expire at the date of expiry of the existing concession (i.e. 31 December 1999), but it would be prolonged automatically for one year at a time as long as AS Oslo Sporveier‘檚 area concession would be renewed. Under this Transport Agreement, AS Sporveierbussene assumed the public service activities of AS Oslo Sporveier and received the annual compensation directly from AS Oslo Sporveier for these services.

(54)

The area concession was renewed for another 10 years on 20 September 2001, with retroactive effect from 1 January 2000.

(55)

In 2001, Oslo Municipality decided that all scheduled bus transport in Oslo should be tendered out. On this basis, scheduled bus transport was gradually put up for public tender in five lots during the period 2003‘�008. The respective contracts entered into force the year following that in which they had been tendered out. The last lot was tendered in 2007, and the last contract entered into force on 30 March 2008.

(56)

Due to its residual nature, the scope of the area concession would be reduced in accordance with the gradual tendering of the routes that once were covered by the area concession. Thus, the area concession awarded to AS Oslo Sporveier expired on 30 March 2008 (when all scheduled bus transport in Oslo had been tendered out). As the concession lapsed, so did the Transport Agreement.

(57)

As set out above, in 1997 AS Sporveisbussene took over the small tour bus division from AS Oslo Sporveier.

(58)

In 2003, AS Sporveisbussene established a subsidiary, Nexus Trafikk AS, in order to participate in tenders for operating scheduled bus transport routes in Oslo. In 2005, AS Sporveisbussene acquired the company Arctic Express AS and its subsidiary Lavprisexpressen.no, engaged in airport express services and regional bus transport. In 2006, the tour bus division was separated from AS Sporveisbussene into a newly established company, Sporveisbussenes Turbiler AS, owned 100 % by AS Sporveisbussene.

(59)

From 1 July 2006 to 1 January 2007, the administration of the public transport in Oslo was reorganised. A new company was established under the name AS Oslo Sporveier (the ‘渘ew AS Oslo Sporveier‘�. The former AS Oslo Sporveier changed its name to Kollektivtransportproduksjon AS (‘淜TP‘�. The administrative functions of the former AS Oslo Sporveier were transferred to the new AS Oslo Sporveier.

(60)

KTP retained the operative part of AS Oslo Sporveier and the ownership of AS Sporveisbussene. The latter turned into a parent company with three subsidiaries. The subsidiaries were renamed (from Nexus Trafikk AS to Unibuss AS; Sporveisbussenes Turbiler AS to Unibuss Tur AS; and Arctic Express AS to Unibuss Ekspress AS).

(61)

AS Sporveisbussene merged with Unibuss AS in 2009. That company kept the name Unibuss AS and took over as the parent company retaining ownership of Unibuss Tur AS and Unibuss Ekspress AS.

(62)

As noted above, Oslo Municipality is responsible for compensating operators of public services it wishes to establish or maintain within its region (42).

(63)

In Oslo, there is a common ticketing system that applies to all operators for bus, tram, underground and ferry. The public service operators are not responsible for the ticketing system. The ticketing system is the responsibility of KTP (formerly AS Oslo Sporveier), and the ticket prices are subject to the control of Oslo Municipality.

(64)

The concessionaire is allowed to keep the ticket income generated by the operation of the scheduled bus transport (43). When the ticket income is not sufficient to cover the cost of the operations, the concessionaire is eligible to receive public service compensation from Oslo Municipality.

(65)

In Oslo, since the 1980s, and until the contracts were tendered out, the compensation under the directly awarded contracts was determined in accordance with the procedure described in the following. In essence, a lump sum that covered the difference between the estimated costs of operating the public service in question and the income from sale of tickets was determined by Oslo Municipality and the concessionaire (44). This was done as part of the general budget process in Oslo Municipality. According to the Norwegian authorities, the budget process can be outlined as follows:

(66)

Based on the budget proposals (and possible amendments during the budget discussions in the City Council), the compensation was granted by budget decisions within certain assumptions that were specified in each decision, i.e. to achieve certain efficiency gains and maintain the preceding year‘檚 transport services to the public. The decisions also contained certain goals with respect to, inter alia, the volume of produced transportation services and costs per travel.

(67)

The assessment of the amount of compensation was based on the costs incurred in the preceding years, corrected for efficiency gains, the development of the Norwegian consumer price index, salaries, taxes, and laws and regulations that would affect the costs.

(68)

According to the Norwegian authorities, separate accounts were kept for the public service and commercial activities (i.e. the tour bus service) carried out by AS Oslo Sporveier. Also, the cost of the commercial activities of AS Oslo Sporveier was not taken into account for the calculation of the annual compensation for public services.

(69)

According to the Norwegian authorities, under the Transport Agreement concluded in 1997, which lapsed on 30 March 2008 when all public service contracts had been tendered out and the area concession itself lapsed, the calculation of the compensation was carried out on an annual basis in accordance with the principles described above.

(70)

Thus, the public service compensation was determined in accordance with the same procedure. The amount was calculated on the basis of the difference between cost and revenue on the public service and adjusted in accordance with the same correction factors throughout the entire period under assessment. Separate accounts were kept for the public service activities and the commercial activities.

(71)

According to an overview of the annual results of the bus activities of AS Oslo Sporveier and AS Sporveisbussene submitted by the Norwegian authorities, the average annual profit of the companies was 0,49 % in the period from 1994 to 2008. This figure, however, includes revenues from commercial activities from 2005 onwards. The average annual return for the period 1994 to 2005, for which the data submitted by the Norwegian authorities relates exclusively to the public service, was 1,98 % (45).

(72)

As explained above, in 1997 AS Sporveisbussene started providing local scheduled bus transport services in Oslo in accordance with the concession awarded to AS Oslo Sporveier. Moreover, the Transport Agreement between AS Oslo Sporveier and AS Sporveisbussene was concluded. The Norwegian authorities have explained that the Transport Agreement introduced the concept of a model, to be defined by AS Oslo Sporveier, under which the quality of the bus services should be measured. The intention was to find a model to incentivise AS Sporveisbussene to provide quality bus transport services. The Transport Agreement provided that the system should be in place 1 January 2008 at the latest.

(73)

In 2004, the specific model of a bonus/malus system was agreed on (46). According to that system, the performance of AS Sporveisbussene is assessed in accordance with the following criteria: (i) total customer satisfaction, (ii) punctuality, (iii) level of safety and comfort, and (iv) the driver being forthcoming. Customer satisfaction is measured on the basis of surveys. Punctuality is measured on the basis of objective data.

(74)

AS Oslo Sporveier granted a quality bonus to AS Sporveisbussene of NOK 3,9 million in 2004. This represents 0,8 % of the revenue of AS Sporveisbussene that year (NOK 483,5 million). The Norwegian authorities have explained that they view the quality bonus as a part of the reasonable profit. The Norwegian authorities have not informed the Authority of any other quality bonuses being granted.

(75)

According to the Norwegian authorities, the commercial bus services operated by AS Sporveisbussene have only to a limited extent required services from AS Oslo Sporveier. Mostly such intra-group services have been exchanged between the subsidiaries in the Oslo Sporveier Group.

(76)

Since 1994, intra-group services were exchanged primarily on the basis of agreements between the companies of the group. The costs of the services were based on market prices, if external companies were involved in the provision of the services. Examples of such services with external providers included indicatively: joint purchase of diesel oil, motor oil or frost fluids, sublease of busses, lease of property from private companies etc. For these services the internal price included also a proportional share of fixed costs, as well as additional costs to cover administration fees, where relevant.

(77)

As regards intra-group services provided by AS Oslo Sporveier to AS Sporveisbussene and its subsidiaries or amongst the subsidiaries, the Norwegian authorities have explained that the prices paid for such services were based on the actual costs (e.g. rent of buses and drivers on specific occasions, cleaning of buses) or on the volume used (e.g. issuing of ID-cards) or even per hour according to the complexity of the service rendered. The actual price included the cost of the service, meaning marginal costs, external/efficiency effects, as well as a proportional share of fixed costs and profit. The Norwegian authorities have explained that such cost-based prices equal the market prices.

(78)

As explained above, AS Sporveisbussene established a subsidiary in 2003, Nexus Trafikk AS, in order to participate in tenders for operating scheduled bus transport services in Oslo. The establishment of the subsidiary created a situation where the companies (AS Sporveisbussene and Nexus Trafikk AS), due to the fact that they both provided bus services, shared certain common costs. The Norwegian authorities explained that this led the companies to establish a new system for allocating (the new) common costs. The new system applied from 2004 onwards. According to the new system, common costs such as IT and communication infrastructure, general PR costs, certain corporate staff, consultancy services related to general contracts, audit, pension, insurance, accounting and salary services were covered by all relevant companies of the group with a certain percentage of each company‘檚 turnover. The method to calculate those overhead rates is based on the identification of all common costs through the budget process each year. The amount of those costs is then summed up and the general overhead rate is estimated by dividing the identified common costs on the total turnover of AS Sporveisbussene and its subsidiaries. The sum of budgeted overhead costs for each company shall cover the common costs included in the total budget. The rate was [‘ (47) % for 2004, [‘ (48) % for 2005 and 2006, and [‘ (49) % for 2007 and 2008.

(79)

The complainant states that AS Oslo Sporveier transferred NOK 41 499 000 in new equity to AS Sporveisbussene in 2004, and alleges that this transaction may have involved state aid as no private market investor would have injected capital in a loss-making company. The complainant furthermore questions whether capital has been injected in order to fund new activities taking place in a market exposed to competition.

(80)

The Norwegian authorities have confirmed that Oslo Municipality injected new capital into the Oslo Sporveier Group on 2 April 2004, and that this measure related to a one-time contribution to the pension fund of the Group (Oslo Sporveiers Pensjonskasse) (50) to cover an accumulated shortage of funds in the existing pension fund accounts. The amount of this capital injection allocated to AS Sporveisbussene was NOK 111 760 000. The Norwegian authorities have furthermore explained that at the same time as the capital injection took place, AS Sporveisbussene changed accounting principles for estimating future pension obligations with the result that from 2004 onwards such obligations were recognized in their accounts (51).

(81)

In light of the information submitted by the Norwegian authorities, the Authority can only understand that the complainant, when referring to the transfer of NOK 41 499 000 in its correspondence with the Authority, has compared the 2003 and 2004 accounts of AS Sporveisbussene, and deducted NOK 39 501 000 (total equity in 2003) from NOK 81 million (total equity in 2004). In this Decision, the Authority will assess the actual capital injection of NOK 111 760 000, which is the amount allocated to cover the pension obligations of AS Sporveisbussene (as opposed to NOK 41 499 000 referred to by the complainant).

(82)

The Norwegian authorities have submitted explanations regarding the rationale for this capital injection, which relates to the pension liabilities of AS Sporveisbussene. These are summarised in the following.

(83)

The Norwegian local authorities ‘�and companies owned or controlled by them ‘�were obliged to provide their employees with an indexed pension equal to 70 % or 66 % of their final salary upon retirement at the age of 67 (52).

(84)

By the mid-1990s, it had become clear that the pension fund of the Oslo Sporveier Group was underfunded. The underfunding had accumulated over several years as the payments of premiums to the pension fund did not take adequate account of increased pension obligations resulting from factors such as increases in the employees‘�salaries, longer life expectancy, changes in expected rates of disability etc. According to the Financial Supervisory Authority of Norway (Kredittilsynet), the pension fund of AS Oslo Sporveier had coverage of only 46,9 % per 31 December 1995. Municipal pension funds with coverage below 95 % must be increased with a minimum of 1,5 % per year (53). Oslo Municipality, as its owner, was therefore obliged by law to cover the underfunding of the Oslo Sporveier Group (54). Thus, as resolved by decision of 23 December 1996, AS Oslo Sporveier had to submit a plan on how to make up for the shortfall. Consequently, a payment plan to eliminate the shortfall by 2020 was laid down. This plan was approved by the Financial Supervisory Authority on 9 July 1997.

(85)

In accordance with the payment plan, Oslo Municipality adjusted upwards the annual public service compensation so as to cover the increased pension premiums.

(86)

According to the Norwegian authorities, Oslo Municipality decided in 2003 to cover the pension fund shortfall at the Oslo Sporveier Group with a one-time payment. As a result, on 2 April 2004, AS Oslo Sporveier injected NOK 802,5 million (55) in Oslo Sporveiers Pensjonskasse to cover the current total shortfall (56). The capital injection covered the underfunding of the pension liabilities relating to the employees of Oslo Sporvognsdrift AS, Oslo T-banedrift AS, AS Oslo Sporveier and AS Sporveisbussene.

(87)

The Norwegian authorities explained that although Oslo Municipality was obliged by law to cover the underfunding of Oslo Sporveier Group, it was not required to do so by a one-time payment: it chose to do so as this solution would be more cost efficient than adhering to the existing amortisation plan. The annual amortised amount to service the underfunding was higher than the finance costs needed to service a bank loan of the same size. Moreover, a one-time payment was estimated to provide savings in the operating budget of approximately NOK 160 million, and reduce the Group‘檚 annual pension costs by NOK 60 million.

(88)

Of the NOK 802,5 million, NOK 111 760 000 covered the pension obligations of AS Sporveisbussene. According to the Norwegian authorities the full amount was paid directly from AS Oslo Sporveier to the Oslo Sporveiers Pensjonskasse and was not transferred as cash to AS Sporveisbussene. In the annual accounts of AS Sporveisbussene for 2004, the pension contribution of NOK 111 760 000 was recorded as an injection of new share capital.

(89)

According to the Norwegian authorities, a part of the capital injection transferred to AS Sporveisbussene covered pension liabilities for employees in the tour bus operation for the period 1994 (when the tour bus operations commenced) until 1 January 1997.

(90)

The Norwegian authorities have submitted calculations according to which approximately NOK 430 300 of the total capital injection was related to pension liability underfunding in the tour bus division.

(91)

The payment of NOK 111 760 000 also enabled AS Sporveisbussene to transfer its pension fund from Oslo Sporveiers Pensjonskasse to Vital Forsikring ASA, a life insurance company. The change took effect on 1 June 2004. Under the then applicable Norwegian law, all premiums intended to cover the shortfall had to be paid in full, before AS Sporveisbussene could transfer its pension obligations from one fund to another (57).

(92)

According to the complainant, AS Oslo Sporveier‘檚 negative tax position has been used to reduce the tax burden on AS Sporveisbussene. Favourable tax conditions in the Oslo Sporveier Group could possibly have been used to avoid payment of tax on profits made in a market wholly or partially exposed to competition. The basis for this complaint seems to be that AS Sporveisbussene in the period 2000‘�004, while having a profit before tax of approximately NOK 54 796 000, only reported a taxable income of NOK 2 027 000.

(93)

According to the Norwegian authorities, and in the Authority‘檚 view, it appears that the complainant refers to the tax rules regarding contributions between companies belonging to the same group (group contributions). AS Sporveisbussene has apparently transferred parts of its profits, thus avoiding the payment of income tax on the amount transferred.

(94)

According to the Norwegian Tax Act (58), companies within a group shall be taxed as single entities; there is, at the outset, no consolidation of groups of companies for tax purposes, which means that a company may only deduct its own losses and is liable to pay tax only on its own profits.

(95)

However, under certain conditions, the tax rules permit a company to deduct from its taxable income a unilateral contribution of capital made to another company within its group as a so called ‘済roup contribution‘�

(96)

Group contributions are allowed (59) when the granting company and the receiving company are limited liability companies (60) and belong to the same group (61). In addition, the parent company has to own more than 90 % of the subsidiary, as well as hold an equivalent share of the votes (62). The Norwegian authorities have explained that these requirements must be met at the end of the relevant financial year in which the group contribution is made.

(97)

The granting and the receiving companies must, as part of their annual tax return, disclose the contributions to the tax authorities by submitting complete information on designated forms.

(98)

A group contribution may consist of money, working capital or other financial contributions (63).

(99)

A group contribution is deductible for the granting company to the extent that the contribution is covered by its taxable income (64). When a company grants a group contribution exceeding its taxable income, it cannot deduct the excess amount (65). The receiving company, on the other hand, is liable for paying taxes on the group contribution (66), but the excess, non-deductible amount does not constitute a taxable income on the hand of the recipient company. The contribution is considered as income for the receiving company in the same year as the granting company deducts the contribution in its tax assessment. Provided that the recipient suffers a deficit, the contribution may be set off against any losses, also those incurred in previous years. Moreover, the requirements related to a limited liability company‘檚 distribution of dividends must be met (67).

(100)

The Norwegian authorities have explained that the group contribution rules apply indiscriminately to all corporate entities that are subject to Norwegian income tax. The application of the rules does not require any form of government permit, licence or similar consent by any public authority. The rules apply regardless of who controls the group, whether it is of domestic or foreign origin, or privately or publicly owned.

(101)

The Norwegian authorities have explained that the purpose of the rules is to establish similar tax treatment and tax neutrality between (i) companies organised as a group structure and (ii) companies that operate several businesses as a single company. This purpose is attained by allowing groups of companies to offset the losses made by one (or several) of its companies against profits made by other companies in the same group, thus in effect allowing the taxation of the group on the basis of its consolidated net taxable profits. The Norwegian authorities have explained that the purpose or aim of the group contribution rules has never been to provide benefits to particular businesses on the basis of who owns the companies or what kind of business the companies engage in.

(102)

The Norwegian authorities have explained that AS Sporveisbussene granted NOK 4 068 000 in group contributions in 2000 and NOK 8 365 000 in 2001 to AS Oslo Sporveier, whereas there were no contributions in the years 2002‘�004 due to tax losses (68).

(103)

In their comments to the opening decision the Norwegian authorities provided more factual information relevant for the assessment of the measures subject to the formal investigation. This information has been incorporated in the sections above.

(104)

In addition to those facts, the Norwegian authorities have provided the Authority with a report dated 25 May 2012 on the efficiency of AS Sporveisbussene for the years 1999 and 2002 commissioned by the Norwegian authorities from an independent consultant by the name of Asplan Viak AS (‘渢he Asplan Viak Report‘� (69). In the report, Asplan Viak AS compared the costs of AS Sporveisbussene to the costs of other scheduled bus operators in Norway. The report concludes that for the years 1999 and 2002, the costs of AS Sporveisbussene were at the level of, or below, the costs of a typical well run and adequately equipped provider of scheduled bus transport services in Norway (70).

(105)

The Norwegian authorities have provided the Authority with information about the financial viability of the commercial bus operations. Except for a minor deficit of NOK 29 000 in 1998, the operations had run with a profit since the start up in 1994. The Norwegian authorities have furthermore provided the Authority with a strategy document from 2003 for the commercial bus operations run by AS Sporveisbussene (‘渢he 2003 strategy document‘�, where the stated goal for 2003 was to generate a gross profit of NOK 1,5 million (before overhead costs) and a turnover of NOK 14,1 million.

(106)

The Norwegian authorities maintain that the financing of local scheduled bus transport in Oslo has been carried out on the basis of an aid scheme based on the CTA and the CTR.

(107)

They firstly stress that the purpose for which grants under Article 22 CTA can be given is clearly defined ‘�compensation can only be awarded to cover the loss incurred on operating scheduled transport services that the county commissions. In that regard, the Norwegian authorities argue that the measure at hand differs from the Finnish measure assessed by the European Commission in 脜land Industrihus (71).

(108)

Secondly, they stress that the discretion of Oslo Municipality in calculating the public service compensation is limited by the national guidelines under the CTR. The Norwegian authorities‘�reasoning is that this limitation of county discretion by the government supports the conclusion that the compensation is granted on the basis of an aid scheme. The compensation to a large extent stems from State (as opposed to county) funds, and the Ministry of Transport (i) has the power to give guidelines on the content and publication of route schedules, (ii) has the power to approve tariffs, (iii) sets national rebates, (iv) can give guidelines for the use of ticketing systems, and (v) has the authority to approve general terms and conditions for scheduled transport.

(109)

Finally they argue that the consistent administrative practice in Oslo demonstrates that the aid has been disbursed on the basis of a scheme.

(110)

The Norwegian authorities argue that the quality bonus/malus system is part of the general public service compensation for the provision of local scheduled bus transport in Oslo, and that consequently, it is an integrated part of the aid scheme. They add that the bonus payment of 2004 amounted to NOK 3,9 million, which represents 0,8 % of the revenue of AS Sporveisbussene that year (NOK 483,5 million). It is additionally argued that this, in any event, represents a part of the reasonable profit on the hand of AS Sporveisbussene.

(111)

The Authority understands that, on the basis of the information provided, the Norwegian authorities claim that there is no state aid involved as regards the allocation of common costs and the payment of intra-group services, given that the transactions between the companies of the group and to a lesser extent between companies of the group and AS Oslo Sporveier are based on normal commercial terms and principles.

(112)

The Norwegian authorities argue that the approximate NOK 430 300 part of the 2004 capital injection that went to cover the pension costs related to purely commercial activities outside the public service remit (the commercial activities capital injection), does not represent state aid, but rather an investment on market terms in accordance with the market economy investor principle (‘淢EIP‘�. Within that context, they stress that, contrary to the presentation of the facts in the opening decision (72), Oslo Municipality had actually become the sole owner of AS Oslo Sporveier in 2002, before the capital injection was carried out in 2004. In addition, the Norwegian authorities have provided the Authority with information about the financial viability of the commercial bus operations. Except for a minor deficit of NOK 29 000 in 1998, the operations had run with a profit since the start up in 1994. According to the 2003 strategy document for the commercial bus operations, the goal for 2003 was to generate a gross profit of NOK 1,5 million (before overhead costs) and a turnover of NOK 14,1 million. On this basis, and with reference to the market economy investor test as drawn up by the Authority in the opening decision (73), the Norwegian authorities argue that the commercial activities capital injection was globally more profitable than liquidating the company and investing the same amount elsewhere, given the high costs involved in such liquidation that would well exceed the cost of the capital injection.

(113)

In their observations to the opening decision, the Norwegian authorities furthermore explain that both the employees engaged with the public service activities and the ones engaged with the commercial activities were employed in the same legal entity and were members of the same pension fund. Also, under Norwegian law, it is not allowed to exclude certain members of a pension fund when covering the deficit in that fund. According to the Norwegian authorities, this substantiates that a private investor in the same situation would have had to implement the same capital increase.

(114)

The Norwegian authorities furthermore argue that the capital injection for the commercial activities does not constitute state aid as it falls below the de minimis threshold.

(115)

It is inferred from the comments submitted by the Norwegian authorities that the group contribution rules exclude any state aid, due to the fact that these rules apply to all companies that have their residence in Norway and aim to achieve tax consolidation within the group.

(116)

The Norwegian authorities argue that the compensation granted for the provision of the public service has not led to overcompensation and is therefore compatible under Article 49 of the EEA Agreement.

(117)

The Authority received comments from two interested parties, the complainant (Konkurrenten.no AS) and Risdal Touring AS, a sister company of the complainant.

(118)

The complainant refers to a series of documents submitted to the Authority and the EFTA Court in which it has explained its position on the case at hand. The complainant objects to the Authority, (i) relying almost exclusively on information provided by the Norwegian authorities, provided in an informal manner, (ii) separating the measures identified by the complainant in two different cases, and (iii) allegedly rejecting the complainant public access to the case file. The complainant calls into question the Authority‘檚 willingness to conduct an impartial and exhaustive investigation.

(119)

Risdal Touring AS is part of the same corporate group as the complainant. It accedes to the concerns raised by the complainant. In particular, the company expresses its regret concerning the Authority‘檚 alleged decision to deny public access to the case file and the length of the proceedings in the case at hand. The company stresses that these circumstances call into question the Authority‘檚 ability and willingness to conduct an impartial and exhaustive investigation.

(120)

Article 61(1) of the EEA Agreement reads as follows:

‘淪ave as otherwise provided in this Agreement, any aid granted by EC Member States, EFTA States or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Contracting Parties, be incompatible with the functioning of this Agreement.‘�/p>

(121)

Firstly, the Authority assesses whether the group taxation measure involves state aid.

(122)

Secondly, the Authority assesses the state aid nature of the commercial activities capital injection. As explained above, this is a part of a larger measure (the 2004 capital injection that was injected to remedy the underfunding of the pension accounts). However, in contrast to the rest of the 2004 capital injection, the commercial activities capital injection went to cover non-public service costs, namely the underfunding of the pension accounts of the employees in the commercial arm of AS Sporveisbussene. For the purposes of assessing the state aid nature of both parts of the 2004 capital injection, a distinction needs to be drawn between them, given the different legal bases they have to be assessed on. Thus, whilst public service compensation measures are assessed on the basis of the principles drawn up by the European Court of Justice (the ‘淐ourt of Justice‘� in the Altmark judgment (74), the assessment of measures that do not constitute public service compensation is not based on those principles.

(123)

Thirdly, the Authority assesses whether the annual compensation and the public service capital injection constitute state aid.

(124)

The complainant has argued that AS Oslo Sporveier‘檚 negative tax position has been used to reduce the tax burden on AS Sporveisbussene. It appears to the Authority that the complainant refers to the taxation rules regarding contributions between companies belonging to the same corporate group (‘済roup contributions‘�.

(125)

The Authority observes that these rules are applicable to AS Oslo Sporveier and AS Sporveisbussene, as the latter is a wholly-owned subsidiary of the former. Thus, AS Oslo Sporveier or any of its subsidiaries could in principle offset taxable profits by distributing contributions within the group.

(126)

The Authority points out that the complainant seems to have taken issue with what appears to be an application of the general Norwegian rules on corporate taxation. The Authority notes that the complainant has neither alleged, nor submitted any information sustaining that the relevant tax rules are drafted in a manner which could lead to state aid being granted to specific companies.

(127)

According to established case law, in order to determine whether a measure is selective, it is appropriate to examine whether, within the context of a particular legal system, that measure confers an advantage to certain undertakings in comparison with others that are in a comparable legal and factual situation (75). It may thus be the case that a particular national taxation system does not involve state aid even though is does not correspond to the general system of corporate taxation in a given EEA State.

(128)

With respect to the contributions concerned, companies within a group are not in a legal and factual situation comparable to that of companies outside a group. When a parent company grants a contribution to a subsidiary and thereby reduces its taxable income, this contribution does not aim to maximise profits for one party at the expense of the other but merely allows for similar tax treatment, as that of a single company that operates several businesses, and ensures tax neutrality between the companies organised as a group and the single company operating several businesses.

(129)

As underlined at section 3.1 of the Authority‘檚 Guidelines on the application of state aid rules to measures relating to direct business taxation, state aid rules do not restrict the power of EFTA States to decide on the economic policy which they consider most appropriate and, in particular, to spread the tax burden as they see fit across the different factors of production.

(130)

The Authority agrees with the Norwegian authorities that the measure is genuinely open to any undertaking resident in Norway that is subject to corporate income tax, including thus foreign companies with subsidiaries in Norway. The statutory capital requirement for the establishment of a limited liability company, namely NOK 100 000 during the period of investigation, allowed an individual company to create a second company in Norway, and hence a group. As a result, the formation of a group could have been made by an individual company without requiring significant capital resources. The scope of potential beneficiaries of such a scheme is thus broad; and its purpose is to ensure similar tax treatment regardless of company size or structure.

(131)

In view of the above, the Authority considers that the offsetting of taxable income by making a group contribution would not confer an economic advantage on AS Sporveisbussene when it, as a condition for benefitting from the tax deduction, was obliged to make the contribution to another company in the group, and at the same amount as the tax base reduction obtained in this manner. Thus, this tax treatment does not constitute state aid within the meaning of Article 61(1) of the EEA Agreement.

(132)

As set out above approximately NOK 430 300 of the 2004 capital injection appears to have been related to underfunding of pension accounts in the tour bus division. As this part of the injected capital does not relate to public service cost, it is not assessed on the basis of Altmark.

(133)

In addition, Commission Regulation (EC) No 1998/2006 of December 2006 on the application of Articles 87 (now 107 TFEU) and 88 (now 108 TFEU) of the EC Treaty to de minimis aid is not applicable in this particular case (76). The amount of approximately NOK 430 300 was part of the overall amount of NOK 111 760 000 that was paid to cover the cost of the public service and constitutes therefore an integral part of it. It cannot thus be considered as an individual measure that satisfies the conditions of the de minimis Regulation (77).

(134)

Furthermore, as the Regulation explicitly states in Article 2, paragraph 2, that ‘渨hen an overall aid amount provided under an aid measure exceeds this ceiling (of EUR 200 000 or EUR 100 000 in the road transport sector), that aid amount cannot benefit from this Regulation, even for a fraction not exceeding that ceiling. In such a case, the benefit of this Regulation cannot be claimed for this aid measure either at the time the aid is granted or at any subsequent time‘�a href="#ntr78-L_2013276EN.01000801-E0078" id="ntc78-L_2013276EN.01000801-E0078" shape="rect"> (78)