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17.8.2011 Official
Journal
of
the
European
Union L
210/1
II
(Non-legislative acts)
DECISIONS
COMMISSION DECISION
of 23 February 2011
on State aid C 58/06 (ex NN 98/05) implemented by Germany for Bahnen der Stadt Monheim (BSM)
and Rheinische Bahngesellschaft (RBG) in the Verkehrsverbund Rhein-Ruhr
(notified under document C(2011) 632)
(Only the German text is authentic)
(Text with EEA relevance)
(2011/501/EU)
THE EUROPEAN COMMISSION,
Bahnen der Stadt Monheim GmbH (‘BSM’) receive
compensation payments for public service obligations,
and requested Germany to submit its comments. At
Germany’s request, a meeting took place on 1 February
Having regard to the Treaty on the Functioning of the European
2007. Germany transmitted its comments on 18 April
Union, and in particular Article 108(2) thereof ( 1 ),
and 4 May 2007.
Having regard to the Agreement on the European Economic
Area, and in particular Article 62(1)(a) thereof,
(2) The
Commission’s
decision
to
open
the
formal
investi
gation procedure was published in the Official Journal of
the European Union on 31 March 2007
( 4 ). The
Commission invited interested parties to submit their
Having called on interested parties to submit their comments
comments on the measures in question within 1
pursuant to the above Articles (
month of the publication date.

2 ), and having regard to these
comments,
(3) The
Commission
received
comments
from
one
interested
Whereas:
party. It transmitted the comments to Germany by letter
dated 29 May 2007. Germany was given the opportunity
to respond to them within 1 month. The Commission
received Germany’s observations by letter dated 29 June
1. PROCEDURE
2007.
(1) By
letter
dated
21
December
2006,
the
Commission
informed Germany of its decision to consider that the
‘old financing system’ of the Verkehrsverbund Rhein-
Ruhr (Rhine-Ruhr Transport Network – ‘VRR’)
(4) At
Germany’s
request,
an
additional
meeting
took
place
constituted existing aid and to open the procedure
on 31 January 2008. This meeting was followed by the
provided for in Article 108(2) TFEU in respect of the
dispatch of additional information by Germany, as
‘new financing system’ (
requested by the Commission, on 5 May and 3 July

3 ) of VRR, on the basis of
which Rheinische Bahngesellschaft AG (‘RBG’) and
2008.
( 1 ) With effect from 1 December 2009, Articles 87 and 88 of the EC
Treaty have become Articles 107 and 108, respectively, of the TFEU.
The two sets of provisions are, in substance, identical. For the
(5) By
letters
dated
2
October
2007,
30
January
2008
and
purposes of this Decision, references to Articles 107 and 108 of
4 April 2008, the interested party provided further clari
the TFEU should be understood as references to Articles 87 and 88,
fications with regard to its initial observations.
respectively, of the EC Treaty, where appropriate.
( 2 ) OJ C 74, 31.3.2007, p. 18.
( 3 ) See Section 4.2.
( 4 ) See footnote 2.

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L 210/2
EN
Official Journal of the European Union
17.8.2011
(6) By
letter
dated
10
July
2008
the
Commission
requested
the compensation of public service obligations. The legal
further clarifications from Germany with regard to the
basis for the levies are paragraphs 19 to 20 of the
submitted information; Germany was also given the
ordinance of ZV VRR (Zweckverbandssatzung für den
opportunity to respond to the additional clarifications
Zweckverband Verkehrsverbund Rhein-Ruhr) of 21 June
provided by the interested party within 1 month.
2006, as amended on 10 December 2008 (‘the ZV
Germany responded by letters dated 5 August and
VRR ordinance’) ( 8 ).
30 September 2008.
(11) RBG
( 9 ) and BSM ( 10 ), the alleged beneficiaries of the
(7) By
letter
dated
16
December
2009
the
Commission
measures at issue, are both public transport undertakings
requested Germany and the interested party to provide
(bus, tram and railway) in the Düsseldorf area. The routes
by 10 January 2010 their observations on the compati
they operate form part of the public transport network
bility of the measures in question with Regulation (EC)
of VRR.
No 1370/2007 of the European Parliament and of the
Council of 23 October 2007 on public passenger
transport services by rail and by road and repealing
Council Regulations (EEC) No
1191/69 and (EEC)
(12) RBG
and
BSM
operate
their
public
passenger
transport
No 1107/70 ( 5 ). Germany and the interested party
routes on the basis of licences which they have been
requested prolongation of the deadline. The Commission
granted by the competent regional government of
prolonged the deadline for both parties until 12 January
Düsseldorf on the basis of the Passenger Transportation
2010. By letter dated 12 January 2010 the Commission
Act (Personenbefrderungsgesetz – ‘PBefG’), and more
received the observations from Germany. The interested
specifically paragraph 13 of the PBefG. The licences
party did not provide any observations within the
grant an exclusive operating right to the holder; in
deadline. By letter dated 13 January 2010 the interested
return, the undertaking which holds a licence has to
party informed the Commission that it was no longer
provide a public transport service in accordance with
interested in participating in the procedure.
the conditions set out in the licence, which indicates in
particular the frequency, kilometres operated and other
quality parameters.
(8) In
its
letter
of
12
January
2010,
Germany
informed
the
Commission as well that it had amended the acts of
entrustment for RBG and BSM and the new financing
3. DETAILED DESCRIPTION OF THE MEASURE
system of VRR, with a view to complying with Regu
lation (EC) No 1370/2007.
3.1. TITLE, BUDGET, DURATION
(13) Title:
Financial
support
for
BSM
and
RBG.
2. THE PARTIES
(9)
VRR was established by various cities and districts in the
(14) The
budget
is
annually
between
[…]
(*)
and
[…]
million
Rhine-Ruhr area as a vehicle to fulfil the cities’ and
euros for BSM and between […] and […] million euros
districts’ task to plan and organise local public
for RBG. The budget for compensation payments under
passenger transport within their respective territories,
financing guidelines and control and profit/loss transfer
and to disburse public service compensation payments
agreements stems from public resources. The financing
for the provision of public transport services. VRR
guidelines and the control and profit/loss transfer
consists of two legally distinct bodies governed by
agreements are of unlimited duration.
public law, namely the Zweckverband Verkehrsverbund
Rhein-Ruhr (‘ZV VRR’) ( 6 ) and the Verkehrsverbund
(
Rhein-Ruhr AR (‘VRR AR’) (

8 ) The latest version of the ZV VRR ordinance is available online at

7 ).
http://www.vrr.de/imperia/md/content/vrrstartseite/satzung_zv.pdf.
( 9 ) RBG, which was renamed ‘Rheinbahn AG’ as from 29 April 2005,
is held by the city of Düsseldorf (5 %) and by ‘Holding der Land
eshauptstadt Düsseldorf GmbH’ (95 %), which is in turn wholly
(10) ZV VRR is entitled to levy contributions from the cities
owned by the city of Düsseldorf and was named ‘Düsseldorfer
and districts which are its members in order to finance
Stadtwerke Gesellschaft für Beteiligungen mbH’ until 18 June
2007. According to the website of the city of Düsseldorf
(http://www.duesseldorf.de/finanzen/beteiligungsberichte/2006_pdf/
( 5 ) OJ L 315, 3.12.2007, p. 1.
anlagen/orga.pdf), Holding der Landeshauptstadt Düsseldorf GmbH
( 6 ) ZV VRR was established by the cities and districts concerned under
also holds a share of 25,05 % in ‘Stadtwerke Düsseldorf AG’, 100 %
the terms of the Law on Communal Cooperation of North Rhine-
of the shares in ‘Bdergesellschaft Düsseldorf mbH’ and a share of
Westphalia (Gesetz über kommunale Gemeinschaftsarbeit).
50 % in ‘Flughafen Düsseldorf GmbH’ (all figures as of
( 7 ) VRR AR was founded by ZV VRR in September 2004. Since June
31 December 2006).
2007, VRR AR is the common institution for the common exercise
( 10 ) BSM is wholly owned by ‘Monheimer Versorgungs- und Verkehrs-
of functions in local public transport by the cities not only in the
GmbH’, itself wholly owned by the city of Monheim. Besides BSM,
territory of the ZV VRR, but also of the neighbouring territory of
Monheimer Versorgungs- und Verkehrs-GmbH also holds 49,9 % of
the ‘Nahverkehrs-Zweckverband Niederrhein’. As ZV VRR has
the shares in ‘MEGA Monheimer Elektrizitts- und Gasversorgungs
delegated its management and its tasks, including most notably
GmbH’, 99 % of the shares in ‘Allwetterbad der Stadt Monheim am
the financing of public service obligations to VRR AR, no
Rhein GmbH’ and 100 % of the shares in ‘Stadtentwicklungs
difference will be made between ZV VRR and VRR AR in what
gesellschaft Monheim am Rhein mbH’.
follows; they will be referred to jointly hereinafter as ‘VRR’.
(*) Covered by the obligation of professional secrecy.

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17.8.2011 Official
Journal
of
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European
Union L
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3.2. RECIPIENTS AND OBJECTIVE
RBG and BSM and the municipal holding companies of
the cities of Düsseldorf and Monheim.
(15) The
recipients
of
the
compensation
payments
at
issue
are
the two companies RBG and BSM.
4.2.1. THE FINANCING OF RBG AND BSM BY VRR
(16) The objective of the measures is to provide the popu
(21) VRR
makes
payments
to
the
undertakings
which
operate
lation with proportionate public passenger transport. The
public transport services within its territory in order to
cooperation between the Land of North Rhine-West
cover part of their costs. By decision of 28 June 2005,
phalia, VRR and the transport providers aims, through
the financing system which had applied since 1990 (the
coordinated planning and a coordinated transport
‘old financing system’) was replaced by a new,
system, by uniform and user-friendly tariffs, through
substantially modified system (the ‘new financing
coordinated information of passengers – also taking
system’).
into account the needs of handicapped persons – and
through uniform quality standards, to increase the
attractiveness of public passenger transport, as set out
in paragraph 4 of the ZV VRR ordinance.
(22) The new financing system was last modified on
10 September 2009 in order to adapt it to the entry
into force of Regulation (EC) No
1370/2007 on
3 December 2009.
4. GROUNDS FOR OPENING THE PROCEDURE
4.1. SCOPE OF THE PROCEDURE
(23) The reform of VRR’s financing system of 28 June 2005
(17) The decision
to open the procedure concerns only
was brought about by the desire to bring the financing
compensation payments to RBG and BSM based on the
system into line with the Altmark ruling of the Court of
new financing system put in place by Decision of VRR of
Justice (
28 June 2005 and related to public service obligations in

12 ). Points 5.4.3 to 5.4.5 of the Financing
Guidelines specify how the Altmark ruling, in particular
the bus and tram transport services. Therefore, the scope
the fourth criterion, has to be implemented. Point 5.4.3
of this final Decision is also limited to those compen
provides that the amount of subsidies is defined on the
sation payments for RBG and BSM.
basis of an analysis of the costs of a typical undertaking,
well run and adequately provided with means of
transport to be able to meet the imposed public service
obligations. Point 5.4.4 provides that, on the basis of this
4.2. THE NEW FINANCING SYSTEM
analysis, VRR will develop parameters for calculating the
(18) The
Commission
identified
the
following
two
sets
of
compensation payments for each of the four categories
financing measures in respect of RBG and BSM in its
described below on a yearly basis; a method for the
decision to open the formal investigation procedure:
updating (or indexation) of these parameters is laid
down in Annex 9 to the Financing Guidelines. Point
5.4.5 provides that the subsidies for each undertaking
are limited to the actual costs incurred by the under
— the financing of transport undertakings in the Rhine-
taking in the discharge of its public service obligations
Ruhr area, such as RBG and BSM, by VRR, and,
taking into account the relevant receipts and that the
parameters for the calculation of the compensation
payments have to be examined and verified by an
auditor at regular intervals.
— the cross subsidisation of RBG and BSM by the
municipal holding companies of the city of
Düsseldorf and the city of Monheim.
(24) The new financing system is described in detail in the
Financing Guidelines and the annexes thereto.
(19) The legal basis for both sets of measures is the Financing
Guidelines for public transport in the VRR (Richtlinie zur
Finanzierung des SPV im Verkehrsverbund Rhein-Ruhr –
(25) According to point 2.1 of the Financing Guidelines, VRR
‘the Financing Guidelines’), adopted on 28 June 2005,
finances the discharge of public service obligations within
and the annexes thereto (
its territory. Points 2.2.1 to 2.2.4 define the four different

11 ).
categories of costs which can be the subject of financing
by VRR. These categories are then described in more
detail in Annex 1 to the Financing Guidelines. The four
(20) For
the
second
set
of
financing
measures,
the
legal
basis
categories are as follows (the abbreviations used
is to be found in addition in bilateral contracts between
correspond to the numbering of the cost categories in
the Financing Guidelines):
( 11 ) The latest version of the Financing Guidelines is published on
VRR’s website, see http://www.vrr.de/imperia/md/content/
( 12 ) Judgment in Case C-280/00 Altmark Trans GmbH and Regierungs
vrrstartseite/finanzierungsrichtlinie.pdf
prsidium Magdeburg [2003] ECR I-7747 (‘Altmark’).

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L 210/4
EN
Official Journal of the European Union
17.8.2011
(26) (a)
Infrastructure
provision (hereinafter
referred
to as
(30) According
to
the
Financing
Guidelines
public
transport
‘cost category 1’): This category contains the costs
operators may apply for compensation for discharging
resulting from the construction and maintenance of
public transport services. The application needs to
fixed installations, as well as the safety and navigation
contain the mandatory elements as described in
systems associated with those fixed installations.
Sections 5, 7 and 8 of the Financing Guidelines such
‘Infrastructure’ includes tram tracks, bus lanes, park
as the underlying calculations for discharging the public
and ride stations, bus stops, stations, garages and
service obligation and possible payments from third
maintenance stations, and navigation and safety
parties. Transport undertakings need to submit their
systems. This category also includes the costs of the
application for compensation at the latest on 31
personnel required for carrying out these tasks.
October of the year that precedes the year for which
they request compensation.
(27) (b)
Management
and
marketing
tasks
imposed
by
VRR
or the competent local authority (hereinafter referred
(31) On the basis of the information submitted by the
to as ‘cost category 2’): This category contains all the
transport undertakings pursuant to point 5.4.2 of, and
additional costs resulting for transport undertakings
Annex 2 to, the Financing Guidelines, VRR calculates the
from their participation in VRR. The additional costs
compensation, which must reflect the costs which an
result from centralised planning and coordination,
average, well-run undertaking would have incurred in
marketing and financial management, product sales
discharging the same obligations. VRR then issues a
and control of operations.
financing notice (Finanzierungsbescheid). This legally
binding act confirms the entrustment and establishes
the compensation payments for each of the four
categories of financing. At the end of each year the
(28) (c)
Vehicle
quality
standards
imposed
by
VRR
or
the
public service operator has to prove in writing its
competent local authority (hereinafter referred to as
income and costs for discharging the public service obli
‘cost category 3’): This category contains all the addi
gations. This is examined by VRR. A second binding
tional costs due to vehicle and rolling stock
administrative decision will be then issued which estab
requirements. The transport undertakings can apply
lishes the precise sum the operator will receive as
for reimbursement of additional expenditure resulting
compensation.
from the purchase of vehicles with air conditioning,
video surveillance, a low floor, a gas engine, a lift for
handicapped persons or a more environmentally
friendly engine.
4.2.2. THE FINANCING OF RBG AND BSM THROUGH
CROSS-SUBSIDISATION
(32) The
ZV
VRR
ordinance
provides
for
the
possibility
that
(29) (d) Additional transport services or other services in
cities and districts which own a transport undertaking
connection with the operation imposed by VRR or
compensate directly their transport undertaking and
the competent local authority. This category has three
deduct the corresponding amount from their levy due
subcategories:
to ZV VRR.
I. additional costs of unprofitable services in off-
(33) Paragraph
19
of
the
ZV
VRR
ordinance
envisages
five
peak periods imposed directly by the competent
different forms of such direct payments, namely:
local authority or by VRR (hereinafter referred to
as ‘cost category 4a’);
— voluntary direct and indirect contributions by the city
II. social obligations in connection with the activities
or district, including dividend payments on shares
imposed by the shareholder
(
which the city or district places with the transport

13 ) (hereinafter
referred to as ‘cost category 4b’); and
undertaking;
III. requirements in connection with the operation or
— voluntary contributions by third parties;
requirements inherent in the system imposed by
the competent local authority or VRR which are
justified individually and lead to an economic
disadvantage (hereinafter referred to as ‘cost
— cross-subsidies in the form of a control and
category 4c’).
profit/loss transfer agreement, in situations where
the transport undertaking forms part of a holding
company and its losses are covered by the profits
( 13 ) This concerns the obligation to apply the collective agreement
concluded by the Municipal Employers Association of North
of other undertakings, for instance electricity and
Rhine-Westphalia (see paragraph 52).
gas companies;

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— dividend payments from undertakings in which the
VRR. The German authorities further stated that the
transport undertaking holds participations or shares;
dividends from the shareholdings in RWE are paid to
the budget of the city and not transferred to RBG.
— the difference between the levy and the total losses of
the transport undertaking.
(39) The cross-subsidisation of BSM: According to the
information provided by the initial complainant, on the
basis of a contract between Monheimer Versorgungs-
und Verkehrs-GmbH and Elektrizittswerke der Stadt
(34) The
sums
paid
under
the
provisions
of
paragraph
19
of
Monheim GmbH the profits of the latter are used to
the ZV VRR ordinance are taken into account in the
finance BSM’s annual losses. BSM is a wholly-owned
calculation of the compensation that VRR pays to the
subsidiary of Monheimer Versorgungs- und Verkehrs-
transport undertakings. Point 8 of the Financing
GmbH ( 14 ).
Guidelines provides that an application by a transport
undertaking for financing by VRR must be rejected
where the (municipal) shareholder has made use of one
(40) In
its
reply
to
the
opening
decision,
Germany
stated
that
or more of the options provided for by paragraph 19 of
a control and profit/loss transfer agreement was
the ZV VRR ordinance. This sum will be deducted from
concluded between BSM and Monheimer Versorgungs-
the payments to which the transport undertaking is
und Verkehrs-GmbH on 27 October 1987 and entered
entitled under the Financing Guidelines.
into force on 1 January 1988. Under the terms of
paragraph 4(1) of this agreement, all profits made by
BSM are to be transferred to Monheimer Versorgungs-
und Verkehrs-GmbH and, conversely, the latter is to
(35) Both the city of Düsseldorf and the city of Monheim
compensate all losses incurred by BSM.
have made use of the possibilities offered by paragraph
19 of the ZV VRR ordinance, concluding agreements
with RBG and BSM respectively. These are described in
the following recitals.
4.3. DOUBTS EXPRESSED BY THE COMMISSION AS
REGARDS COMPENSATION PAYMENTS TO RBG AND BSM
BASED ON THE NEW FINANCING SYSTEM
(36) The alleged cross-subsidisation of RBG by Düsseldorfer
4.3.1. EXISTENCE OF AID
Stadtwerke Gesellschaft für Beteiligungen mbH:
According to the information provided by the initial
(41) With regard to the existence of State aid, the
complainant, it appeared that on the basis of profit
Commission concluded in opening the formal investi
and loss transfer agreements Düsseldorfer Stadtwerke
gation procedure that both of the measures in question
Gesellschaft für Beteiligungen mbH transfers the profits
involved state resources and were imputable to the State.
made by its profitable holdings – Stadtwerke Düsseldorf
AG and Umschlagsgesellschaft für Kraftwerkbrennstoffe
mbH – to its loss-making subsidiaries RBG and Bderge
(42) In the decision opening the investigation, the
sellschaft Düsseldorf.
Commission explained that Germany was of the
opinion that the financing measures in question did
not confer a selective economic advantage as they met
all four Altmark criteria and as they were not likely to
(37) The alleged cross-subsidisation of RBG by the City of
distort competition and affect trade between Member
Düsseldorf: In addition, according to the information
States. However, on the basis of the information
provided by the initial complainant, the Commission
provided by Germany in the course of the preliminary
also made reference to directly granted subsidies from
examination, the Commission expressed the following
the city of Düsseldorf to RBG. It appeared that these
doubts in this regard:
subsidies were granted from the dividends which
Düsseldorf received from its 1,1 % shareholdings in
RWE AG.
(43) With regard to the first Altmark criterion, the
Commission came to the preliminary conclusion that
undertakings operating in VRR did have a public
(38) Yearly
payments
from
Düsseldorf
to
RBG: Germany stated in
service obligation imposed by the means of licences for
its reply to the opening decision that there has never
operating bus and tram routes, which were granted to
been a control and profit/loss transfer agreement
them by the relevant regional authority.
between Stadtwerke Düsseldorf AG and Düsseldorfer
Stadtwerke Gesellschaft für Beteiligungen mbH (as of
( 14 ) Germany provided the following details of the various share
18 June 2007: Holding der Landeshauptstadt Düsseldorf
holdings of Monheimer Versorgungs- und Verkehrs-GmbH
GmbH – ‘the holding company’). However, yearly
(wholly-owned by the city of Monheim):
payments to RBG were made by the holding company
— 100 % Bahnen der Stadt Monheim GmbH (BSM),
for the provision of the public service obligation, and
— 100 % Allwetterbad der Stadt Monheim GmbH,
— 100 % Stadtentwicklungs GmbH,
such payments are taken into account for the calculation
— 50,1 % MEGA Monheimer Elektrizitts und Gas GmbH,
of compensation for the public service obligation by
— 36 % Wasser GmbH.

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Official Journal of the European Union
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(44) In relation to the second Altmark criterion, the
were considered to form the legal framework applicable
Commission expressed doubts as to whether all four
for the assessment of the compatibility of the public
cost categories themselves indeed constituted a public
service obligations.
service obligation, and whether the public service obli
gations had been clearly defined. It was also unclear as to
whether at least a part of the costs of the measures in
(50) The
Commission
considered
in
the
decision
opening
the
question should be paid by the undertakings in their own
procedure that Germany had excluded the relevant
commercial interest, and therefore should be covered
transport services from the scope of application of Regu
solely by ticket revenue. The Commission also noted
lation (EEC) No 1191/69, and that therefore only Regu
that Germany had not transmitted detailed information
lation (EEC) No
1107/70 was the applicable legal
on the parameters and method of calculating the
framework.
compensation.
(51) In relation to the compatibility of the aid on the basis of
Article 3(2) of Regulation (EEC) No 1107/70, the
(45) In the opening decision the Commission was not in a
position to exclude the possibility that the compensation
Commission expressed doubts as to whether the obli
might exceed what was necessary to cover all or part of
gations for which BSM and RBG received compensation
the costs incurred in discharging public service obli
constituted public service obligations and whether the
gations (third Altmark criterion).
amounts paid corresponded to the costs incurred in

discharging those obligations.
(46) As
the
licences
for
transport
undertakings
in
VRR
were
5. COMMENTS FROM GERMANY ( 18 )
awarded directly without a public tendering procedure,
the Commission expressed doubts as to whether the
5.1. SCOPE OF THE PROCEDURE
fourth Altmark criterion had been complied with. It did
(52) Germany
began its observations by providing back
not have sufficient information to be able to evaluate
ground information on the implementation of the new
whether the calculation of the compensation established
financing system. It indicated in particular that the old
on the basis of average costs of all undertakings subject
financing system had remained in force until the end of
to financing by VRR corresponded to the level of costs of
2005 (31 December 2005). The new financing system,
a typical well-run undertaking providing means of
which had been decided on 28 June 2005, had been put
transport.
into effect as from 1 January 2006.
(47) In the opening decision the Commission considered that
(53) Germany
emphasised
that
the
complaint
lodged
at
the
the financing of the measures in question might affect
beginning of the current procedure had been made by
inter-State trade and distort or threaten to distort
the city of Langenfeld by letter dated 27 January 1999
competition within the internal market.
and that it had been renewed on 21 January 2004.
Therefore, in Germany’s view, the Commission’s
procedure should relate only to the old financing
system which was in force until the end of 2005.
4.3.2. COMPATIBILITY OF THE AID WITH THE INTERNAL
Germany disputed the Commission’s decision to open
MARKET
the formal investigation procedure regarding the new
financing system. It argued that, in the absence of a
(48) Having
concluded
that
it
could
not
exclude
the
existence
complaint specifically pertaining to the new financing
of State aid, the Commission examined its possible
system applying from 2006 onwards, the Commission
compatibility with the internal market on the basis of
had not carried out a sufficiently detailed preliminary
Article 93 TFEU.
assessment and that, consequently, Germany had not
had the opportunity to clarify the questions that were
still open.
(49) According
to
the Altmark judgment, Article 93 TFEU
could not be applied directly but only through the
5.2. THE NEW FINANCING SYSTEM APPLYING FROM 2006
three Council Regulations adopted on the basis
ONWARDS
thereof ( 15 ). Accordingly, Council Regulation (EEC)
No 1191/69 of 26 June 1969 on action by Member
(54) Germany
explained
that
the
new
financing
system
was
States concerning the obligation inherent in the
designed to ensure that the four Altmark criteria were
concept of a public service in transport by rail, road
respected. In order to do this, all financial flows – be
and inland waterway ( 16 ) and Council Regulation (EEC)
they direct payments or cross-subsidies – were taken into
No 1107/70 of 4 June 1970 on the granting of aids
account in the calculation of the public service compen
for transport by rail, road and inland waterway ( 17 )
sation payments to the transport undertakings
made by VRR.
( 15 ) Case C-280/00, cited above, paragraphs 101 and 105-107.
( 16 ) OJ L 156, 28.6.1969, p. 1.
( 18 ) Germany submitted comments it had received from VRR, RBG and
( 17 ) OJ L 130, 15.6.1970, p. 1.
BSM and made extensive reference to them in its comments.

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EN
17.8.2011 Official
Journal
of
the
European
Union L
210/7
5.3. DEFINITION OF THE PUBLIC SERVICE OBLIGATIONS
Schemes contain provisions on the network (services and
(FIRST ALTMARK CRITERION)
infrastructure) to be provided by RBG. RBG holds
licences under the PBefG for the bus and (overground
(55) Germany
replied
to
the
Commission’s
doubts
with
regard
and underground) tram routes operated by it.
to the definition of the public service obligations and the
act of entrustment (recital 61 of the opening decision),
and with regard to cost categories 1, 2, 3, and 4 (recitals
62 to 71 of the opening decision).
(58) In respect of BSM, the city council of Monheim and the
district council of Mettmann approved VRR’s new
financing system by decisions of 10 November and
19 December 2005, respectively. The latter decision
5.3.1. ACT OF ENTRUSTMENT
also provides that the Local Public Transport Scheme
for the district of Mettmann ( 22 ) is to be brought into
(56) With
regard
to
the
question
whether
transport
under
line with the new financing system. The Local Public
takings in VRR are actually required to discharge
Transport Scheme 2004 for the district of Mettmann
clearly defined public service obligations, Germany
contains provisions on the network (services and infra
stated that the licences ( 19 ) issued for the operation of
structure) to be provided by BSM. BSM holds licences
bus and tram routes under the terms of the Passenger
under the PBefG for the bus routes operated by it.
Transportation Act (Personenbefrderungsgesetz – PBefG)
are not the sole legal basis in this respect. In addition,
the respective Local Public Transport Scheme (Nahver
kehrsplan) ( 20 ) or, for a transitional period after the
entry into force of the new financing system ( 21 ),
5.3.2. COST CATEGORY 1: INFRASTRUCTURE PROVISION
decisions of the respective city and district councils,
and the respective financing notices by VRR based on
(59) Germany stated that, for the operation of public
VRR’s Financing Guidelines further clarify the public
transport services, an undertaking has to be equipped
service obligations. The public service obligations are
with vehicles. It emphasised that in Germany and all
therefore imposed by way of a threefold act of
other Member States the infrastructure used for the
entrustment (i.e. by means of licences, the Local Public
provision of public transport services is usually
Transport Schemes and the respective financing notice by
provided by the State. Therefore, Germany is of the
VRR based on VRR’s Financing Guidelines).
opinion that the provision of infrastructure does not
confer any economic advantage on the operators in
question. In addition, it emphasised that VRR is
financing only the maintenance and not the construction
of infrastructure. Moreover, VRR does not finance the full
maintenance costs, but only the fixed costs (the variable
(57) In respect of RBG, the city council of Düsseldorf
costs of infrastructure utilisation are not compensated).
approved VRR’s new financing system by decision of
Germany provided an analysis of the additional burden
15 December 2005 in which it also decided to base its
deriving from the public service obligation, taking into
Local Public Transport Scheme on the Financing
account several criteria, in particular the utilisation of the
Guidelines which are part of the new financing system.
capacity of the infrastructure. Any revenue deriving from
The Local Public Transport Scheme 2002-07 was decided
the use of the infrastructure (e.g. advertising) was
by the city council of Düsseldorf on 20 March 2003.
subtracted from the calculation of the additional costs.
RBG is also subject to the Local Public Transport
Schemes of neighbouring cities and districts (the Rhine
district in Neuss, the city of Neuss, the district of
Mettmann). All of these Local Public Transport
(60) Under
the
terms
of
the
PBefG
and
its
implementing
legis
( 19 ) A licence granted to a transport undertaking under the Passenger
lation ( 23 ), RBG and BSM are obliged to keep the infra
Transportation Act entails the obligations to operate the service in
structure necessary for the operation of the transport
question, to transport any passenger under the terms of the auth
services for which they hold licences ready for use
orised tariff and to respect the authorised timetable.
according to certain quality standards (most importantly
( 20 ) The Local Public Transport Scheme lays down the public transport
regarding the equipment of stops). They are both subject
routes to be operated during the period in question. It lays down
to additional requirements going beyond these legal
frequencies for the transport services, key figures on distances to be
travelled, minimum standards for the quality of the transport
requirements, which are contained in VRR’s guidelines
services and infrastructure (such as connectivity, standards for
on the equipment of stops (Richtlinie Haltestellenaus
connections, standards for operations including passenger
stattung im VRR 08/1991) and in the respectively
information, service, security and cleanliness) as well as an action
applicable Local Public Transport Schemes. For RBG,
plan (covering e.g. investment/maintenance measures in infra
structure and vehicles). The Local Public Transport Scheme
therefore provides the necessary basis for defining future
( 22 ) The Local Public Transport Scheme for the district of Mettmann
standards and quality benchmarks. Any reduction of the services
also applies to the territory of the city of Monheim, which does not
offered or the closure of routes by the transport operator requires
have its own Local Public Transport Scheme.
the formal agreement of the regional authority.
( 23 ) In particular the Decree on the Operation of Motor Vehicle Under
( 21 ) Germany estimates that, due to the necessary consultations, the
takings in Passenger Transport (Verordnung über den Betrieb von Kraft
adoption of a Local Public Transport Scheme takes at least 1 year
fahrunternehmen im Personenverkehr – ‘BOKraft’) and the Decree on
and that, therefore, there was a need to find a transitional
the Construction and Operation of Trams (Verordnung über den Bau
instrument.
und Betrieb der Straenbahnen – ‘BOStrab’).

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L 210/8
EN
Official Journal of the European Union
17.8.2011
this concerns for instance a dynamic passenger
5.3.5. COST CATEGORY 4: ADDITIONAL TRANSPORT
information system at 192 of the stops and a
SERVICES OR OTHER SERVICES IN CONNECTION
computerised operations control system. The additional
WITH OPERATION IMPOSED BY VRR OR THE
requirements for BSM pertain to safety, information at
COMPETENT LOCAL AUTHORITY
stops, comfort and cleanliness.
(65) Germany
stated
that
this
category
consists
of
three
clearly
defined subcategories:
5.3.3. COST CATEGORY 2: MANAGEMENT AND
MARKETING TASKS IMPOSED BY VRR OR THE
(66) (i) Cost category 4a: Additional costs of unprofitable services
COMPETENT LOCAL AUTHORITY
in off-peak periods imposed by the competent local
authority or by VRR: Germany explained that the
(61) Germany
provided
additional
clarifications
with
regard
to
public transport services provided during off-peak
this cost category, which contains in particular costs
periods ( 24 ) requested by the public authorities are
arising from retailing and marketing activities (e.g.
unprofitable. However, these services are required
support for ticket subscriptions, provision of facilities
by the public authorities (VRR or the respective
for commuters such as park and ride areas and their
cities and districts) for reasons of accessibility of
advertising, support for organisers of major events, call
transport services. The obligations of RBG to
centres), allocation of the revenues and further coor
provide transport services in off-peak periods are
dination tasks. In this cost category the revenue
laid down by the Local Public Transport Schemes
attributable is deducted in order to calculate the costs
of the city of Düsseldorf, the Rhine district of
related to the additional burden imposed by the public
Neuss and the district of Mettmann. BSM is obliged
authorities.
to provide off-peak transport services by virtue of the
licences granted to it and the Local Public Transport
Scheme of the district of Mettmann. The respective
financing notice by VRR is to be regarded as the last
(62) No
legal
requirements
pertain
to
this
category.
RBG
and
step of the act of entrustment.
BSM are required to discharge these tasks by virtue of a
cooperation agreement and an allocation of revenue
agreement which they have with VRR and which are a
(67) (ii) Cost category 4b: Social obligations in connection with
prerequisite for their participation in VRR’s financing
operation imposed by the shareholder: With regard to
system. Guidelines to the cooperation agreement
this category Germany explained that RBG and BSM
contain details of these tasks. Both RBG and BSM are
are obliged to apply the collective agreement
subject to further tasks in this category under the terms
concluded by the Municipal Employers Association
of the Local Public Transport Plan of the district of
of North Rhine-Westphalia (Kommunaler Arbeitgeber
Mettmann. The respective financing notice by VRR is
verband Nordrhein-Westfalen), which results in a
to be regarded as the last step of the act of entrustment.
higher average pay scale. The municipal undertakings
are also by virtue of collective agreements, which are
not normally concluded by private undertakings in
the sector, obliged to operate and/or contribute to
5.3.4. COST CATEGORY 3: VEHICLE QUALITY STANDARDS
company pension schemes. By virtue of its
IMPOSED BY VRR OR THE COMPETENT LOCAL
membership of a (public) supplementary pension
AUTHORITY
fund, RBG has to make contributions for its
employees to this fund. Equally, BSM is obliged to
(63) According
to
the
clarifications
provided
by
Germany,
the
operate a company pension scheme on the basis of
additional costs connected with vehicle quality standards
the specific collective agreement. The costs are
derive from requirements set by VRR and/or local
calculated as the difference between the reference
authorities. Such quality requirements are, for example,
pay scale (the pay scale contained in the collective
more environmentally friendly vehicles than legally
agreement TV-N, group V, step 2 usually applied by
necessary, or the use of air-conditioned or low-floor
private undertakings) and the actual pay which also
vehicles. These requirements can be set for the whole
includes the actual extra costs of the company
VRR area or at a local level by the respective cities or
pension scheme.
districts. The same principles as in the previous categories
apply to the calculation of the additional burden for the
public transport undertakings.
___________
( 24 ) The economically less favourable off-peak times (times outside peak
hours) are:
(64) The Local Public Transport Scheme of the city of
Public transport services outside
Düsseldorf obliges RBG to invest in low-floor vehicles
Days
Public transport services in city
areas
city areas
and enhanced environmentally friendly vehicles.
Furthermore, the city council of Düsseldorf has obliged
Monday–
0:00–6:00 and 19:00–0:00 00:00–6:00
and
18:00–0:00
RBG to install particulate filters in its diesel-engined
Friday
vehicles. Under the terms of the Local Public Transport
Saturday 0:00–6:00
and
16:00–0:00 all
day
Plan of the district of Mettmann, BSM is to invest in low-
floor vehicles.
Sunday all
day all
day

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EN
17.8.2011 Official
Journal
of
the
European
Union L
210/9
(68) (iii) Cost category 4c: Other requirements in connection with
(75) For the first subcategory, namely the additional costs of
operation or requirements inherent in the system imposed
unprofitable services in off-peak periods imposed by the
by the competent local authority or VRR which are justified
competent local authority or by VRR (cost category 4a),
individually and lead to an economic disadvantage:
VRR employs a parameter for the calculation of the
Germany explained that this is an open category
compensation which is based on the difference between
under which, on the basis of individual proof,
marginal revenue and marginal costs per kilometre. This
compensation can be granted for economic disad
is specific to each local network and to each mode of
vantages stemming from requirements regarding the
operation.
operations or requirements which pertain to the
operation of a public transport system (e.g. special
requirements with respect to environmental
protection and the offer of additional services for
(76) Regarding the second subcategory, the parameter consists
major public events). Germany pointed out that
in an amount which is established by comparing the
RBG and BSM are not subject to such requirements.
higher pay with the provisions of a certain collective
agreement (‘TV-N, group V, step 2’) (cost category 4b),
which is considered to contain almost the same pay
scales, and then determining an amount per driver
5.4. PARAMETERS ON THE BASIS OF WHICH THE
specific to each local network and each mode of
COMPENSATION IS CALCULATED (SECOND ALTMARK
operation.
CRITERION)
(69) Germany began its observations by providing
information on and describing the process for setting
the parameters for the calculation of the compensation.
(77) Finally,
according
to
Germany,
other
requirements
in
connection with the operation or requirements inherent
in the system imposed by the competent local authority
or VRR which are justified individually and lead to an
economic disadvantage (cost category 4c) are always
(70) In relation to the parameters applied for the calculation
calculated on an individual basis, provided they are
of the compensation, Germany made a distinction
duly documented.
between the different cost categories.
5.5. NO OVERCOMPENSATION (THIRD ALTMARK
(71) Regarding infrastructure provision (cost category 1), Germany
CRITERION)
stated that VRR uses a certain amount – specific to each
local network (Bedienungsgebiet) and to each mode of
(78) Germany
explained
that
all
transport
undertakings
in
operation (Betriebszweig) – per kilometre of track or
VRR are required by VRR to submit yearly reports on
road used for transport services as parameter for the
the expenditure of funds with a view to proving that no
calculation of the compensation.
overcompensation in respect of the public service obli
gations occurs.
(72) Regarding
the management and marketing tasks imposed by
VRR or the competent local authority (cost category 2), VRR
(79) These
reports
must
contain
the
actual
costs
(expenditure
uses – according to Germany – a certain amount of
minus earnings) incurred in the discharge of public
tariffs in relation to the net receipts of tariff increases
service obligations and are then checked by a chartered
which is specific to each local network and to each
accountant and VRR for accuracy and completeness.
mode of operation as parameter for the calculation of
Should VRR find out that, on the basis of these
the compensation.
reports, there is overcompensation, such overcompen
sation would, according to Germany, be recovered.
(73) Regarding
the vehicle quality standards imposed by VRR or
the competent local authority (cost category 3), Germany
(80) For
recovery, it is necessary to distinguish between
stated that the parameter for the calculation of the
compensation paid by VRR on the basis of an adminis
compensation consists of a certain amount based on a
trative decision and compensation paid directly to the
standard vehicle of minimum quality, the amount being
transport undertaking based on paragraph 19 of the
specific to each local network and to each mode of
ZV VRR ordinance.
operation.
(81) In the former case, the administrative decision is called a
(74) Regarding the additional transport services or other services in
‘positive financing notice’ (positiver Finanzierungsbescheid)
connection with operation imposed by VRR or the competent
pursuant to the Financing Guidelines. Pursuant to point
local authority (cost category 4), Germany made a
7.4.1 of the Financing Guidelines, VRR itself orders
distinction between the three subcategories.
recovery of any overcompensation.

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L 210/10
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Official Journal of the European Union
17.8.2011
(82) In the latter case, VRR initially issues a ‘negative
maintenance costs does not affect a distinct market open
financing notice’ (ablehnender Finanzierungsbescheid)
to competition, namely the local regional transport
pursuant to point 7.4.2 of the Financing Guidelines or
market, because VRR’s financing system prevents
a ‘binding notice on the amount of permissible compen
financing earmarked for infrastructure maintenance
sation’. In such a situation, point 8.3 of the Financing
costs (where the market is closed to competition) from
Guidelines stipulates that VRR is to inform the city or
being used by transport undertakings in the market open
district owning the transport undertaking that it is
to competition. Furthermore, public transport operators
obliged to recover the overcompensation.
are required to provide separate accounts for the different
cost categories.
5.6. TYPICAL UNDERTAKING, WELL RUN AND
ADEQUATELY PROVIDED WITH MEANS OF TRANSPORT
(FOURTH ALTMARK CRITERION)
5.8. COMPATIBILITY OF THE AID WITH THE INTERNAL
MARKET
(83) Germany stated that, contrary to the Commission’s
observation in the decision to open the formal investi
(87) Germany being of the opinion that there is no State aid
gation procedure, the parameters for the calculation of
in favour of RBG or BSM, it provided comments on the
the public service compensation are set out and take into
compatibility of the alleged aid only in respect of the
account all available information from public and private
second subcategory of the fourth category, namely the
transport undertakings within or outside the VRR area.
social obligations in connection with operation imposed
VRR has established the costs (i.e. the target data) which
by the shareholder ( 25 ). It argued that the compensation
result from activities discharging public service obli
of the higher pay scale is, in any case, compatible with
gations in the first three categories by a typical under
the internal market on the basis of Article 107(3)(c)
taking which is well run with the collaboration of their
TFEU.
own expert/auditor, Industrie- und Verkehrstreuhand
GmbH (‘IVT’ or ‘the expert’). IVT has at its disposal
comparative data on a large number of transport under
takings established in Germany and Austria stemming
from a comparative analysis. The target data were
5.9. COMPATIBILITY OF THE AID ON THE BASIS OF REGU
adjusted by VRR taking account of certain (e.g.
LATION (EC) No 1370/2007
regional) specificities. The target data for the fourth
category are established by reference to certain regional
(88) As
Regulation
(EC)
No
1370/2007
entered
into
force
on
market data.
3 December 2009, the Commission requested Germany
to provide its observations on the compatibility of the
new financing system with the internal market on the
basis of Regulation (EC) No 1370/2007.
(84) At
the
end
of
its
analysis
VRR
defines
a
margin
for
average market prices of the various cost categories.
These target data were established for the year 2003
and they are updated according to an index in
accordance with Annex 9 to the Financing Guidelines
(89) Germany was
in principle of the opinion that the
(provisions concerning the ‘evolution of the price level
Commission should assess the compatibility of the new
over time’) and according to volume increases/decreases
financing system on the basis of Regulation (EC)
and changes in structures.
No 1370/2007 only as from 3 December 2009.
(85) Germany emphasised in particular that, in its view, the
(90) Furthermore,
Germany
argued
that
the
new
financing
fact that an undertaking is discharging a public service
system – if it involves State aid – is also compatible
obligation (such as, for instance, paying employees higher
with the provisions of Regulation (EC) No 1370/2007.
than the normal rates due to social policy decisions) does
not make it possible to conclude that such an under
taking is not well run.
(91) Germany also informed the Commission of the following
adjustments to the new financing system in order to
5.7. DISTORTION OF COMPETITION AND EFFECT ON
comply with the requirements of Regulation (EC)
TRADE BETWEEN MEMBER STATES
No 1370/2007:
(86) Germany
expressed
the
opinion
that
the
public
financing
of infrastructure maintenance costs does not affect trade
( 25 ) It also provided comments on the compatibility on the basis of
between Member States because this infrastructure is
Article 107(3)(c) TFEU of aid for professional training which it
considers to fall under the third subcategory of the fourth
exclusively used by the beneficiary of such financing.
category. As no obligations were imposed on RBG and BSM in
Further, it argued that the financing of infrastructure
this category, these comments will not be mentioned in detail here.

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EN
17.8.2011 Official
Journal
of
the
European
Union L
210/11
(92) (a)
Entrustment
with
the
public
service
mission:
The
under the PBefG are generally not capable of being
imposed public service obligations for RBG
regarded as the imposition of a public service obligation
(decision of the competent authority dated 25 June
because they are granted on the initiative of the transport
2009) and BSM (decision of the competent authority
undertaking concerned, which therefore also defines the
dated 26 November 2009) have been summarised in
conditions of its service. In addition, the transport under
a single public service contract with a limited
taking itself can ask for a later adjustment of the licence.
duration of 10 years.
The third party also considered the Local Public
Transport Schemes not to be a suitable act of
entrustment as they do not impose any obligations but
rather only define – in a general manner – policy goals.
(93) (b)
Application of the Annex to Regulation (EC)
No 1370/2007: The net financial effect will be
calculated in line with the provisions of the Annex
to Regulation (EC) No 1370/2007.
(99) Regarding the infrastructure provision, the third party
submitted that no precise definition of the obligations
is given and that only a framework of measures
generally capable of being financed is spelled out.
Furthermore, the third party stated that the bulk of the
6. COMMENTS FROM THIRD PARTIES
investment in this category would normally be carried
(94) The
Commission
received
comments
from
one
interested
out by the transport undertakings in their own
party, which requested confidential treatment. The initial
economic interest.
complainant, the city of Langenfeld, did not submit any
observations.
(100) Regarding the management and marketing tasks imposed by
VRR or the competent local authority, the third party argued
that the management and marketing tasks connected
(95) The
interested
party
disputed
the
Commission’s
finding
that the old financing system is existing aid.
with participation in a transport association such as

VRR are an aspect of the general economic framework
in the sector. In practice, no transport undertaking
operates outside the system of a transport association.
Therefore, according to the third party, compliance
(96) As
regards
the
financing
by
cross-subsidisation,
the
third
with management and marketing tasks imposed by a
party submitted that this is a practice, usually termed
transport association is a necessary prerequisite to
‘kommunaler Querverbund’, common to a great number
obtaining a licence which otherwise would be refused
of municipal holding companies in Germany, which
by the competent authority. Finally, participation in a
according to the third party has been called into
transport association brings with it certain economic
question by a judgment of the German Federal Finance
benefits, e.g. economies of scale.
Court ( 26 ). In the third party’s opinion, where such cross-
subsidisation occurs by way of a control and profit/loss
transfer agreement, there is no way to prevent overcom
pensation in view of the automatic character of the
(101) In relation to the vehicle quality standards imposed by VRR
transfer. The third party contested that VRR actually
or the competent local authority, the third party submitted
takes account of the cross-subsidisation when it applies
that VRR’s new financing system does not define exactly
its financing system in practice and that VRR
which type of vehicle would be bought by the transport
consequently adjusts its financing amounts accordingly.
undertakings purely out of their own economic interest.
(97) As regards the financing by VRR, the third party argued
(102) Regarding the additional costs of unprofitable services in off-
that VRR’s new financing system is not applied in
peak periods imposed by the competent local authority or by
practice as it is formulated in the Financing Guidelines,
VRR, the third party stated that such services can be
for the following reasons:
operated at marginal cost when they are well planned,
a transport undertaking having in its opinion to calculate
its vehicle and personnel requirements according to peak-
hour demand.
(98) According to the third party the public service obli
gations are defined in a non-transparent way in collab
oration with the transport undertakings themselves. It
argued that a threefold act of entrustment needs to
(103) Regarding the social obligations in connection with the
comply with the requirement of clarity in the same
operation imposed by the shareholder, the third party
way as a single act. It considered that the licences
submitted that bearing higher personnel costs cannot
be regarded as a public service obligation or a service
( 26 ) Federal Finance Court, judgment of 14.7.2004 – I R 9/03 –, BFHE
of general economic interest as it does not relate to the
207, 142.
provision of transport services.

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L 210/12
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Official Journal of the European Union
17.8.2011
(104) Regarding the other requirements in connection with the
reasoning of the BVerwG, which has ruled in the
operation or requirements inherent in the system
opposite sense, is erroneous. In the third party’s view,
imposed by the competent local authority or VRR
the measures in question do not comply with the
which are justified individually and lead to an
provisions of Regulation (EEC) No 1191/69 and are
economic disadvantage, the third party argued that they
therefore not compatible with the internal market.
cannot be regarded as public service obligations and that
they are not in fact imposed on the transport under
takings.
(110) On a general note, the third party argued that VRR does
not have the necessary means at its disposal for moni
toring compliance with the provisions of the new
(105) Concerning the second Altmark criterion, the third party
financing system. VRR cannot therefore ensure
emphasised that no common system for the definition of
compliance with the fourth Altmark criterion.
the parameters applies to the second and third
subcategory of the fourth category of public service obli
gations in VRR’s new financing system. According to the
third party, the establishment of the parameters in all of
(111) Finally, the third party commented extensively, especially
the categories cannot be verified by competitors for their
in its later submissions, on the way in which VRR is
correctness as they are not published. Also, VRR’s budget
financed by the contributions it levies from its member
for 2006 was only voted on in February/March 2006.
cities and districts.
According to the third party, this indicates that the
parameters for 2006 were not established in advance.
7. COMMENTS FROM GERMANY ON THE THIRD
PARTY’S COMMENTS
(106) Concerning the third Altmark criterion, the third party
submitted that the public service obligations cannot be
(112) Germany began its observations by stating that it had
assessed completely separately from the commercial
provided the Commission with all necessary information
activities of the transport undertakings. Moreover, over
and that it was therefore not necessary to comment on
compensation must be assessed separately for every
the aspects raised by the third party in its comments. At
single category. In the third party’s opinion, the new
a later stage, Germany nevertheless replied to certain
financing system does not ensure that the relevant
comments made by the third party.
receipts or other economic advantages in relation to
the public service obligation are taken into account in
the various categories. The automatic character of the
cross-subsidisation mechanism makes it impossible to
prevent overcompensation in VRR’s financing system.
(113) Germany stated that VRR’s budget is of no importance

for the actual entrustment with public service obligations
or the definition of the parameters. It explained that
currently there is no obligation to publish data on the
establishment of the parameters for the calculation of
(107) Concerning the fourth Altmark criterion, the third party
compensation.
argued that, on the basis of the information at its
disposal, it was not in a position to evaluate the appro
priateness of the benchmarking method employed by
VRR. It submitted that the total number of undertakings
from which comparative data are examined is not
(114) Germany disputed the third party’s contention that off-
decisive in determining whether these comparative data
peak services can be operated at marginal cost. It further
reflect the costs of an average, well-run undertaking. In
disputed that participation in a transport association is a
its opinion, the correct selection of the undertakings and
general prerequisite for carrying on public transport
the correct weighting of the data stemming from
activities.
different kinds of undertaking are what matter.
(115) Germany emphasised that earnings connected with
(108) Regarding the effect on competition and on trade
activities discharging the public service obligations in
between Member States, the third party agreed with the
the different categories are indeed attributed correctly
Commission’s preliminary assessment and consequently
to the respective categories and that, in any case, VRR
considered that the measures constitute State aid within
would look into inappropriately high profits.
the meaning of Article 107(1) TFEU.
(116) Germany made clear that the entrustment with the obli
(109) In the third party’s opinion, Regulation (EEC)
gation to fulfil higher vehicle quality standards stems
No 1191/69 is applicable in the present case. Germany
from Local Public Transport Schemes, decisions by the
has not made use of the possibility of exempting the
competent city or district council and the VRR’s
services at issue from the scope of that Regulation. The
Financing Guidelines.

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EN
17.8.2011 Official
Journal
of
the
European
Union L
210/13
(117) Regarding cross-subsidisation, Germany emphasised that
decision of 20 December 2006, the old financing system
the automatic element in a profit and loss transfer is
is existing aid. Accordingly, the Commission will limit its
reflected only in the accounting and that actual
assessment to the period from 1 January 2006.
payment of the sums does not occur automatically.
(124) Germany has informed the Commission that the new
8. SCOPE OF THE PROCEDURE AND OF THE FINAL
financing system was modified in September 2009 in
DECISION
the light of the entry into force of Regulation (EC)
No 1370/2007. In particular, the acts of entrustment
(118) In the present case, Germany has argued that, because
and the rules for compensation in the Financing
the complaint of the City of Langenfeld related to the old
Guidelines were modified.
financing system, which was not subject to the formal
investigation procedure at issue, the Commission is not
entitled to issue a decision pursuant to Article 6(1) of
Council Regulation (EC) No 659/1999 of 22 March
1999 laying down detailed rules for the application of
(125) The Commission considers that it is not possible to take
Article 93 [now Article 108 TFEU] of the EC Treaty ( 27 ).
a final position on the existence of State aid and the
possible compatibility of the thus modified new
financing system with Regulation (EC) No 1370/2007
without first giving Germany the opportunity to
comment on possible concerns of the Commission
(119) The Commission notes that it has acted in line with the
with regard to the modifications.
provisions of Article 10(1) of Regulation (EC)
No
659/1999 as it is requested to examine any
information in its possession from whatever source
regarding alleged unlawful State aid. Furthermore, it has
also carried out a preliminary assessment according to
(126) Hence, without taking a view on the Financing
Guidelines as modified in 2009 in the light of Regulation
the requirements of Article 6(1) of Regulation (EC)
(EC) No 1370/2007 and the acts of entrustment as
No 659/1999.
modified in 2009 in the light of Regulation (EC)
No 1370/2007, the Commission limits this final
decision to compensation payments made to RBG and
BSM on the basis of the new financing system and the
revenue sharing agreements for the years 2006 to 2009.
(120) Hence the Commission is not precluded from taking a
The Commission reserves the right to assess the
decision in the present case to close the formal investi
Financing Guidelines as modified in 2009 in the light
gation procedure in respect of the new financing system.
of Regulation (EC) No 1370/2007 and the acts of
The Commission also points out that the present inves
entrustment as modified in 2009 in the light of Regu
tigation does not relate to the old financing system.
lation (EC) No 1370/2007 should doubts arise as to their
compliance with the EU State aid rules.
(121) With regard to the financing for discharging a public
service obligation, the Commission assumed in the
9. EXISTENCE OF STATE AID
opening decision that the new financing system entered
into force on 28 June 2005, i.e. the date on which the
(127) Article 107(1) TFEU provides that ‘any aid granted by a
decision to implement it was adopted.
Member State 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 Member States, be incompatible with the
(122) However, as Germany made clear during the formal
internal market’.
investigation procedure, the new financing system
entered into force, not when the decision was adopted
on 28 June 2005, but only on 1 January 2006.
9.1. STATE RESOURCES AND IMPUTABILITY TO THE STATE
(128) For the assessment of the presence of state resources and
their imputability it is necessary to distinguish between
(123) The Commission can conclude therefore that the old
the compensation payments made by VRR to transport
financing system remained in force until 31 December
undertakings on the basis of the Financing Guidelines, on
2005. As the Commission already explained in its
the one hand, and direct payments made to transport
undertakings on the basis of paragraph 19 of the ZV
( 27 ) OJ L 83, 27.3.1999, p. 1.
VRR ordinance, on the other.

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Payments under the Financing Guidelines
in question, to be considered imputable to the State. It is
also necessary to examine whether the public authorities
(129) With regard to the compensation payments made by
must be regarded as having been involved, in one way or
VRR to transport undertakings on the basis of the
another, in the adoption of these measures. On that
Financing Guidelines, the Commission observes that
point, the Court indicated that the imputability to the
VRR is a public body which is financed by contributions
State of a measure taken by a public undertaking may
levied from the cities and districts which are its members.
be inferred from a set of indicators arising from the
Therefore, the Commission concludes that these amounts
circumstances of the case and the context in which
are paid from state resources. VRR forms part of the
that measure was taken ( 29 ).
regional administration. Its financing decisions are
therefore also imputable to the State.
(134) Such indicators can be the integration of the undertaking
into the structures of the public administration, the
Payments under the control and profit/loss transfer
nature of its activities and the exercise of the latter on
agreements
the market in normal conditions of competition with
private operators, the legal status of the undertaking (in
(130) With regard to direct payments to transport undertakings
the sense of its being subject to public law or ordinary
on the basis of paragraph 19 of the ZV VRR ordinance
company law), the intensity of the supervision exercised
in conjunction with the revenue sharing agreements, the
by the public authorities over the management of the
Commission notes that all five options provided for by
undertaking, or any other indicator showing, in the
this rule originate from public undertakings or public
particular case, an involvement by the public authorities
bodies.
in the adoption of a measure or the unlikelihood of their
not being involved, having regard also to the compass of
the measure, its content or the conditions which it
contains ( 30 ).
(131) The Commission observes that the payments made to
RBG and BSM through revenue sharing agreements or
shareholder agreements also stem from public under
takings. The City of Düsseldorf holds 100 % of the
shares in Holding der Landeshauptstadt Düsseldorf
(135) The Commission first notes that, in general, as regards
GmbH and the City of Monheim holds 100 % of the
the operation of public transport services, these are
shares in Monheimer Versorgungs- und Verkehrs-
activities that play a fundamental role in several
GmbH. For this reason, irrespective of their corporate
policies: transport policy, regional economic devel
or other legal status, both are public undertakings
opment policy or town and country planning policy.
within the meaning of Article 2(b) of Commission
The public authorities are in general not ‘absent’ when
Directive 2006/111/EC of 16 November 2006 on the
decisions on the compensation of a public service obli
transparency of financial relations between Member
gation are taken.
States and public undertakings as well as financial trans
parency within certain undertakings ( 28 ).
(136) Second, as regards the supervision of the activities of
Holding der Landeshauptstadt Düsseldorf GmbH and
(132) The Commission concludes, therefore, that the funds
Monheimer Versorgungs- und Verkehrs-GmbH by the
paid to RBG and BSM through Holding der Land
State, the Commission observes that, according to the
eshaupstadt Düsseldorf GmbH and Monheimer
most recent information available, seven of the ten
Versorgungs- und Verkehrs-GmbH are financed from
members of the supervisory board of Holding der Land
state resources.
eshauptstadt Düsseldorf GmbH are members of
Düsseldorf city council ( 31 ) and that all seven members
of the supervisory board of Monheimer Versorgungs-
und Verkehrs-GmbH are members of Monheim city
council ( 32 ). In both cases, the mayor is one of these
(133) However, the Court of Justice has also ruled that, even if
members.
the State is in a position to control a public undertaking
and to exercise a dominant influence over its operations,
( 29 ) Judgment in Case C-482/99 France v Commission [2002] ECR I-
actual exercise of that control in a particular case cannot
4397, paragraphs 52 and 57 (‘Stardust Marine’).
be automatically presumed. A public undertaking may
( 30 ) Stardust Marine, paragraphs 55 and 56.
(
act with more or less independence, according to the

31 ) Landeshauptstadt Düsseldorf, Beteiligungsbericht 2006, Sheet
‘Holding der Landeshauptstadt Düsseldorf GmbH’ (available at:
degree of autonomy left to it by the State. Therefore,
http://www.duesseldorf.de/finanzen/beteiligungsberichte/2006_pdf/
the mere fact that a public undertaking is under state
beteiligungen/holding.pdf), p. 22.
control is not sufficient for measures taken by that
( 32 ) Bericht über die Beteiligungen der Stadt Monheim am Rhein an
undertaking, such as the financing to the undertakings
Unternehmen und Einrichtungen in der Rechtsform des privaten
Rechts (Beteiligungsbericht gem § 117 GO NW) 2007
(available at http://www.monheim.de/rathaus/bekanntmachungen/
( 28 ) OJ L 318, 17.11.2006, p. 17.
bekanntmachungen_2007/beteiligungen_bericht_2007.pdf), p. 1.

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(137) Third, the Commission further notes that the payments
is actually required to discharge public service obligations
disbursed through a control and profit/loss transfer
and (whether) those obligations have been clearly
agreement have been subject to the approval of the
defined’.
Supervisory Board of Monheimer Versorgungs- und
Verkehrs-GmbH. Equally, the capital transfers of
Holding der Landeshauptstadt Düsseldorf GmbH require
the approval of its Supervisory Board.
(144) In the present case, RBG and BSM are entrusted with
discharging public service obligations by virtue of a so-
called threefold act of entrustment, namely:
(138) In the light of the above, the Commission concludes that
the decisions to disburse payments to RBG and BSM by
the respective holding companies of the City of
Düsseldorf and the City of Monheim are imputable to
— the licences issued by the Düsseldorf Regional
the State.
Government;
(139) In the light of the above, the Commission concludes that
— the Local Public Transport Schemes of the cities of
the measures are financed through state resources and are
Düsseldorf and Neuss, the Rhine district of Neuss and
imputable to Germany.
the district of Mettmann; and,
9.2. SELECTIVE ECONOMIC ADVANTAGE
— the respective positive and negative financing notices
on the amount of permissible compensation, issued
(140) It must next be established whether the measures grant a
selective economic advantage to RBG and BSM.
by VRR on the basis of point 7.2 of the Financing

Guidelines.
(141) It follows from the Altmark judgment that ‘where a State
measure must be regarded as compensation for services
(145) The German authorities provided the Commission with
provided by the recipient undertakings in order to
copies of these acts.
discharge public service obligations, so that those
undertakings do not enjoy a real financial advantage
and the measure thus does not have the effect of
putting them in a more favourable competitive position
(146) In reply to the observations of the third party, the
than the undertakings competing with them, such a
Commission considers that, although it would increase
measure is not caught by Article 92(1) of the Treaty
transparency if the public service obligation had been
[now Article 107(1) TFEU]. However, for such compen
imposed by a single act, this is not strictly necessary in
sation to escape classification as State aid in a particular
order to fulfil the first Altmark criterion.
case, a number of conditions must be satisfied’ ( 33 ).
(147) In its decision to open the formal investigation
(142) In this regard, the German authorities claim that the
financing of RBG and BSM through the measures at
procedure, the Commission considered that in the
issue – both the financing provided through cross-subsi
present case the public service obligation comprises the
disation or directly by the public shareholders of under
provision of public passenger transport services by bus,
takings in question and the financing provided directly
tram and rail on the basis of the licences pursuant to
by VRR – respect the four criteria of the Altmark
paragraphs 8 and 13 of the PBefG which RBG and BSM
judgment and therefore cannot be regarded as aid
hold (see recital 61 of the opening decision).
within the meaning of Article 107(1) TFEU.
(148) In addition, the Commission notes that the public service
9.2.1. THE RECIPIENT UNDERTAKING IS ACTUALLY
obligation of RBG and BSM to provide passenger
REQUIRED TO DISCHARGE CLEARLY DEFINED
transport services derives from the licences obtained
PUBLIC SERVICE OBLIGATIONS
together with the requirement to comply with the
Local Public Transport Schemes as far as frequencies,
(143) Firstly, according to the above-mentioned judgment, it
routes served and other requirements are concerned;
has to be established whether ‘the recipient undertaking
the financing notices of VRR based on the Financing
Guidelines provide further details with regard to these
( 33 ) Case C-280/00, cited above, paragraphs 87 and 88.
conditions.

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L 210/16
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(149) The Commission concludes, therefore, that in the present
(155) The Commission first of all observes that the four cost
case the public service obligation comprises the entire
categories, contrary to the wording of the Financing
provision of public passenger transport services by bus,
Guidelines, do not themselves constitute public service
tram and rail on the basis of the licences pursuant to
obligations (see also the previous section on fulfilment
paragraphs 8 and 13 of the PBefG which RBG and BSM
of the first Altmark criterion) ( 34 ). They rather define cost
hold.
categories for which the transport undertakings can claim
compensation. These cost categories do not cover all cost
categories a transport undertaking has. In particular, they
exclude the basic provision of transport vehicles (only
additional quality requirements are covered) as well as
(150) This means that the public service obligations are not
competitive salaries paid during peak periods on routes
limited to the four cost categories for which transport
which are commercially viable. This point will also be
undertakings can claim compensation, but also include
elaborated further in the sections assessing the third and
the provision of transport services in peak periods. The
fourth Altmark criteria.
definition of the four cost categories for which transport
undertakings can claim compensation only comes into
play for the assessment of compliance with the second
Altmark criterion.
(156) The Commission further needs to analyse each of the
points on which it raised doubts, and assess them in
the light of the comments received. The doubts of the
Commission concerned the following points:
(151) Therefore, the Commission concludes that the threefold
act of entrustment clearly and specifically defines the
public service obligations which RBG and BSM are
required to discharge, namely all the transport services
defined in the licences and the local public transport
— Do the cost categories correspond to costs which are
schemes.
costs of discharging public service obligations?,
9.2.2. THE PARAMETERS ON WHICH THE COMPENSATION
— Is it possible to include, as the Financing Guidelines
IS CALCULATED HAVE BEEN ESTABLISHED
do, an ‘open cost category’?,
BEFOREHAND IN AN OBJECTIVE AND TRANSPARENT
MANNER
(152) Secondly, the Commission has to establish whether ‘the
parameters on the basis of which the compensation is
— Have the parameters on the basis of which the
calculated have been established beforehand in an
compensation is calculated been established
objective and transparent manner’.
beforehand in an objective and transparent manner?,
(153) The Commission notes that it is not necessary in order to
The cost categories correspond to costs of discharging
fulfil the second Altmark criterion that the exact overall
public service obligations
amount of compensation is determined beforehand as
long as the methodology and the relevant parameters
(157) Cost category 1: Infrastructure provision
for the calculation of that amount are established in
advance in a way that leaves no room for later discre
tionary adjustments.
(158) On the basis of the additional information provided by
Germany, the Commission can conclude that compen
sation paid under this heading is limited to infrastructure
(154) In its decision to open the formal investigation
which is necessary for the provision of public passenger
procedure, the Commission expressed doubts as to
transport services by bus, tram and rail on the basis of
whether all of the four cost categories for which the
the licences pursuant to paragraphs 8 and 13 of the
Financing Guidelines provide for compensation
PBefG which RBG and BSM hold. With regard to the
payments indeed relate to a public service obligation,
precise definition of the infrastructure, it observes that
whether they have been clearly defined, and whether at
the threefold act of entrustment clearly defines the infra
least a part of the costs covered by the cost categories
structure which the transport undertakings have to
should not be paid by the undertakings in their own
provide.
commercial interest (see recitals 61 to 75 of the
opening decision). The German authorities and the
( 34 ) It is for that reason that the Commission included, in its opening
third party have provided additional information on
decision, part of the assessment of the second Altmark criterion in
this point.
the section dealing with the first Altmark criterion.

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(159) The Commission had raised no doubts regarding cost
(cost category 1), for the calculation of costs for
category 2.
management and marketing tasks (cost category 2), for
the calculation of costs for additional vehicle quality
standards (cost category 3), for the calculation of costs
for off-peak period services (cost category 4a) and for
(160) Cost category 3: Vehicle quality standards imposed by VRR or
the calculation of costs for social obligations under
the competent local authority
collective agreements (cost category 4b).
(161) On this point, the Commission concludes that Germany
(168) The costs which the transport undertakings incur for
has demonstrated that the transport undertakings would
each of the possible measures accepted under the four
not buy vehicles with the required level of quality, as any
cost categories have to be allocated. Annex 2 defines the
additional income generated by the better service quality
applicable cost categories according to accounting
would not be sufficient to offset the additional costs.
standards and contains forms for the transport under
takings to report their current costs. It does not,
however, contain any precise parameters expressed in
terms of EUR. On the contrary, it stresses that the
(162) Cost category 4: Additional transport services or other services
in connection with operation imposed by VRR or the competent
parameters need to be set individually for each local
local authority
network and each mode of operation.


(163) On this point, the Commission concludes that, as far as
(169) For cost category 1, 2 and 3 the costs have to be
services during off-peak periods are concerned, Germany
calculated using accounting cost categories and costs
has demonstrated that the transport undertakings would
for material and energy, costs for rent or leasing,
not provide them in their own commercial interest.
overhead costs, depreciation and interest. For cost
category 4, first subcategory, VRR employs a parameter
for the calculation of the compensation which is based
on the difference between marginal revenue and marginal
No compensation of costs under the open cost category
costs per kilometre and which is specific to each local
in the case of BSM and RBG
network and to each mode of operation. For the second
subcategory of cost category 4, the social obligations
(164) The second doubt on this point concerned the fact that
imposed by the shareholder, the parameter consists of
the third subcategory of cost category 4 was an open
an amount which is established by comparing the
category which enabled transport undertakings to claim
higher pay with the provisions of a certain collective
compensation for any other requirements in connection
agreement (‘TV-N, group V, step 2’). This amount is
with operation or the system (imposed by the competent
calculated per driver (adjusted for services subcontracted
local authority or VRR) which are justified individually
to outside undertakings and for drivers hired after
and lead to an economic disadvantage.
1 January 2006 or after the TV-N first became
applicable) and is specific to each local network and to
each mode of operation, as the different public transport
undertakings have negotiated different collective
(165) The Commission observes in this regard that Germany
agreements and additional social advantages.
has informed the Commission that RBG and BSM have
not received any compensation payments under this
subcategory.
(170) The base line data stem from 2003 and are updated
according to an index in accordance with Annex 9 to
Parameters established beforehand in an objective and
the Financing Guidelines (provisions concerning
transparent manner
‘evolution of the price level over time’). Annex 9

contains a number of indexes, which are each linked to
(166) The method for calculating the compensation to which
a specific kind of cost and are chosen so that they reflect
an individual transport undertaking is entitled is
closely the average increase in prices for a given cost
described in Annexes 2 and 8 to the Financing
category.
Guidelines.
(171) Germany has transmitted to the Commission the
(167) Annex 2 contains a detailed description of the four cost
negative financing notices issued pursuant to point
categories, as well as forms to be filled in in order to
7.4.2 of the Financing Guidelines by VRR to RBG and
transmit to VRR the information on the basis of which
BSM. The financing notices contain for each cost
VRR calculates the compensation for each of the four
category the following information: parameter in EUR
cost categories concerning each of the services rendered
per cost unit; number of cost units; compensation
(bus, tram, railway). This includes a description of the
amount defined as the product of parameter per cost
information required for the infrastructure provided
unit and the number of cost units.

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(172) By way of illustration, in 2007 the parameters for RBG
(177) The Commission considers that, with regard to fulfilment
for operation of the ‘Stadtbahn’ (city railway) were as
of this criterion, it is appropriate to verify first whether
follows ( 35 ):
the negative financing notices issued by VRR to RBG and
BSM make it possible, taken on their own, to exclude any
overcompensation. Should this not be the case, the
Commission assesses in a second step whether
Germany has demonstrated that the concrete application
Parameter
Ausgleichs
for the years 2006 to 2009, in combination with the
Bedienungsgebiet Baustein
in EUR je Leistungs
Leistungs
einheit
betrag in
existing agreements between the undertakings and the
einheit
EUR
municipalities owning them, suffice to exclude any over
compensation for RBG and BSM.
Rheinbahn BS
1 […] […] […]
BS 2 […] […] […]
BS 3 […] […] […]
Financing Guidelines
(178) The Commission notes that Sections 5, 7 and 8 of the
BS 4a […] […] […]
Financing Guidelines describe in detail the procedure for
granting compensation. Transport undertakings need to
BS 4b […] […] […]
submit their application for compensation at the latest
on 31 October of the year that precedes the year for
BS 4c […] […] […]
which they request compensation. Point 5.4 of the
Financing Guidelines sets out the maximum amount of
Summe […] […] […]
compensation to which a transport undertaking is
entitled. For this purpose, it defines three different
[Bedienungsgebiet = Local network Baustein = Component Parameter in
EUR je Leistungseinheit = Parameter in EUR per cost unit Leistungseinheit
ceilings: the amount of compensation; the amount of
= Cost unit Ausgleichsbetrag in EUR = Amount of compensation in EUR
financing, and the available financial resources.
Summe = Sum]
(179) The amount of compensation is calculated based on the
information defined in Annex 2 to the Financing
(173) ‘BS 1-4c’ refers to each of the four cost categories. For
Guidelines for each of the four cost categories. On the
each of the four cost categories in each of the transport
basis of the information submitted by the transport
sectors (in this example, the Stadtbahn) carried out by
undertakings pursuant to Annex 2, VRR calculates
BSM and RBG a parameter in euro is established. The
parameters which must reflect the costs which an
parameter is then multiplied by the unit expected to be
average, well-run undertaking would have had to
spent. The sum arrived at is the sum which is established
discharge the same obligations, and which are recorded
as the ex ante amount of compensation.
in the financing notices.
(174) The Commission therefore concludes that the financing
(180) The amount of financing is defined as the amount of
notices issued by VRR to RBG and BSM contain a calcu
funds which are available for a given municipality.
lation of the compensation which is based on parameters
They are augmented by any profits of the transport
that have been established beforehand in an objective and
undertaking resulting from activities outside the four
transparent manner.
compensation categories.
(175) Therefore, the Commission concludes that the second
Altmark criterion is met.
(181) The available financial resources are defined as the
difference between the amount of compensation and
the amount of financing.
9.2.3. NO OVERCOMPENSATION
(176) The third condition mentioned in the Altmark judgment
(182) VRR takes a preliminary decision on the compensation
is that ‘the compensation does not exceed what is
to which a transport undertaking is entitled, and
necessary to cover all or part of the costs incurred in
disburses the compensation in four instalments on 15
discharging the public service obligations, taking into
February, 15 May, 15 August and 15 November. The
account the relevant receipts and a reasonable profit
disbursement of 15 February is based on the decision
for discharging those obligations’.
for the previous year; any changes are corrected in the
instalment paid on 15 May (see point 7.3 of the
( 35 ) Covered by the obligation of professional secrecy.
Financing Guidelines).

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(183) For undertakings such as RBG and BSM, which receive
Guidelines, the latter obtain complete coverage of
their compensation through a control and profit/loss
their costs. They are entitled to keep any difference
transfer agreement or through an agreement with their
between their actual losses and the amount to which
holding company, special rules apply. In these cases, VRR
they are entitled on the basis of the Financing
will take a decision refusing the compensation payment.
Guidelines, as there is no legally binding procedure
This decision states the compensation to which the
that would allow VRR to claw back the difference.
undertaking is entitled. As an alternative, the Financing
Guidelines provide that such undertakings can request a
binding communication setting out the compensation to
which they are entitled (see point 7.2 of the Financing
Guidelines).
Assessment of RBG and BSM
(187) The public service compensations in the present case can
be disbursed directly through contributions from the
(184) The Financing Guidelines state for this latter case as well
public shareholders of the undertakings in question, a
that, whenever the compensation constitutes State aid,
control and profit/loss transfer agreement and/or by
the recipient undertaking, together with the municipality
VRR. The Commission notes that, in order to fulfil the
owning it needs to take in advance measures to avoid
third Altmark criterion, there is no requirement according
overcompensation. As Germany considers that the
to which the payments have to be disbursed by the
present measure does not constitute State aid, no such
organising authority, such as VRR. However, it has to
preventive measures have been implemented so far.
be ensured that the annual compensation does not
exceed what is necessary to cover all actual costs in
relation to the public service obligation.
(185) The transport undertakings need to report each year the
actual costs they have encountered for discharging the
public service obligations. VRR verifies these reports and,
(188) The financing notices state that the amount which is
should the compensation calculated in advance exceed
established in them constitutes the maximum amount
the actual costs, orders the recovery of the amounts in
to be paid subject to an ex post examination of the
excess.
actual costs incurred. The maximum amount of
financing is defined as the amount of funds which are
available for a given municipality.
(186) The Commission considers that, as they are currently
worded, the Financing Guidelines are not sufficient to
guarantee, on their own, the absence of overcompen
sation for RBG and BSM, for the following reasons:
(189) The transport undertakings need to report each year the
actual costs that they have incurred in discharging the
public service obligations. The ex post assessment reflects
the actual costs incurred for each of the four categories
(a) No consideration of profits from economically viable
in each of the transport sectors. The sum of the ex post
transport services in peak periods: As they are
costs is then compared with the sum in the ex ante
currently worded, the Financing Guidelines consider
calculations. The ex post calculation is set out in a
as public service obligations only the obligations
financing notice having the same structure as the ex
imposed upon undertakings with respect to the
ante financing notices in order to enable a comparison.
four cost categories for which the Financing
According to Germany these financing notices are set up
Guidelines provide for compensation. The calculation
ex ante and ex post for RBG and BSM for each of the
of the compensation takes into account revenues
years under assessment. VRR verifies these reports and,
from services which are covered by the four cost
should the compensation calculated in advance exceed
categories, i.e. in particular services in off-peak
the actual costs, orders the recovery of the amounts in
periods and to remote areas, but they exclude
excess. However, the Financing Guidelines do not contain
profits from economically viable transport services
any detailed rules on overcompensation or the method of
provided in peak periods.
clawing back any overpayment.
(b) No claw-back mechanism for overcompensation
received under control and profit/loss transfer
(190) Therefore, for the period from 1 January 2006 until
agreements and shareholder agreements: In their
31 December 2009, the Commission needs to verify
current form, the Financing Guidelines treat
whether BSM and RBG received any overcompensation.
transport undertakings that receive compensation
Germany has provided the Commission with information
from VRR differently from transport undertakings
on the actual payments that BSM and RBG received. For
that receive compensation in the form of control
this purpose, it has transmitted to the Commission the
and profit/loss transfer agreements and shareholder
annual profit and loss statements of RBG and BSM.
agreements. Whereas the former have at their
Earnings and costs for each of the companies are
disposal only the amount corresponding to the
checked annually by certified public accountants who
compensation calculated according to the Financing
also certified the respective annual balance sheets.

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Official Journal of the European Union
17.8.2011
Payments under the Financing Guidelines and the
of the market for bus transport by several Member States
control and profit/loss transfer agreements
in 1995. As this market opening resulted from a spon
taneous decision of the Member States, the control and
(191) In 2006, RBG incurred losses of EUR 65 million ( 36 ). The
profit/loss transfer agreement – if it were to constitute
losses were covered by loss assumption by the Land of
aid ( 38 ) – has become existing aid pursuant to
North Rhine-Westphalia and VRR in the amount of
Article 1(b)(v) of the Procedural Regulation.
EUR 64,1 million. This is EUR 7 million less than what
RBG was entitled to according to VRR’s financing notice.
In 2007, the necessary overall compensation payments
to RBG by the Land of North Rhine-Westphalia and VRR
amounted to EUR 52,2 million. This is EUR 17,5 million
less than what RBG was entitled to according to VRR’s
(194) The Commission notes that the market for public
financing notice. RBG earned a net profit of zero in
passenger transport has been opened to competition by
2007. In 2008, RBG received compensation payments
EU law as of 3 December 2009, when Regulation (EC)
from the Land of North Rhine-Westphalia and VRR for
No 1370/2007 entered into force. Pursuant to
discharging public service obligations in the amount of
Article 1(b)(v) of Regulation (EC) No 659/1999, as a
EUR 41,9 million, which covered its losses so that RBG
result of the liberalisation of the activity by an act of
earned a net profit of zero. This is EUR 14,1 million less
the EU, all existing aid for public passenger transport
than what RBG was entitled to according to VRR’s
has therefore become new aid as of that day. For the
financing notice. In 2009, RBG received compensation
reasons set out above in recitals 114 to 124, the
payments from the Land of North Rhine-Westphalia and
present Decision covers only the period until the entry
VRR for discharging public service obligations in the
into force of Regulation (EC) No 1370/2007.
amount of EUR 45,3 million, which covered its losses
so that RBG earned a net profit of zero. This is
EUR 11,4 million less than what RBG was entitled to
according to VRR’s financing notice.
(195) In view of the above, the Commission can conclude that,
for the period 2006 to 2009, BSM and RBG have not
received any overcompensation based on the new
financing system, and the third Altmark criterion is thus
fulfilled with regard to payments based on the new
(192) In the years 2006-09, BSM each year incurred the
financing system.
following losses in the public passenger transport
sector: EUR […] (2006), EUR […] (2007), EUR
[…] ( 37 ) (2008) and EUR […] (2009). When comparing
these losses with the amounts established in the
financing notices, the Commission has found that the
9.2.4. TYPICAL UNDERTAKING, WELL RUN AND
losses incurred by BSM in the public passenger
ADEQUATELY PROVIDED WITH MEANS OF
transport exceeded the amounts established in the
TRANSPORT
financing notices. The total losses, that is the sum of
the amounts authorised in the financing notices and
(196) Lastly, the Altmark judgment states that ‘where the under
the additional losses, were covered by loss assumption
taking which is to discharge public service obligations …
through the existing control and profit/loss transfer
is not chosen pursuant to a public procurement
agreement with Monheimer Versorgungs- und Verkehrs-
procedure … the level of compensation needed must
GmbH leading to an annual profit/annual loss of zero.
be determined on the basis of an analysis of the costs
which a typical undertaking, well run and adequately
provided with means of transport so as to be able to
meet the necessary public service requirements, would
have incurred in discharging those obligations, taking
into account the relevant receipts and a reasonable
(193) With regard to the assumption of the additional losses,
profit for discharging the obligation’.
the Commission notes that it is based, not on the new
financing system, but solely on the control and
profit/loss transfer agreement. This control and profit/loss
transfer agreement was concluded prior to the opening
(197) Neither RBG nor BSM was entrusted with the public
( 36 ) See Beteiligungsbericht der Stadt Düsseldorf für das Jahr 2006 (for
service obligations at issue in the course of an open,
subsequent years see the corresponding link): http://www.
transparent and non-discriminatory tendering procedure.
duesseldorf.de/finanzen/beteiligungsberichte/2006_pdf/
Consequently, the Commission has to examine the
beteiligungen/rbg.pdf.
second alternative stipulated in the fourth Altmark
( 37 ) This amount covers the losses incurred in the public passenger
transport sector and the rail transport of goods sector. The
criterion, which provides that the level of compensation
Commission notes that, as explained in recitals 114 to 124, the
must be determined on the basis of an analysis of the
scope of the procedure was limited to compensation payments
costs of a typical, well run and adequately equipped
which BSM and VRR have received on the basis of the new
undertaking.
financing system of VRR for public passenger transport services.
Therefore, the compensation which BSM has received for rail
transport of goods is not covered by the scope of this Decision.
( 38 ) See recital 215.

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(198) Germany argues that the parameters on the basis of
applying a methodology based on a basket of goods
which the compensation is calculated are established on
used for the public transport service sector by the
the basis of the average costs of all the undertakings
German Association of Transport Enterprises (Verband
subject to VRR’s financing system.
deutscher Verkehrsunternehmen) using data of the
German Statistical Office. However, such an updating
procedure cannot fully reflect efficiency gains realised
in the meantime in the sector.
(199) During the formal investigation procedure Germany
submitted that VRR established the costs which are
incurred by a typical undertaking which is well run
and adequately provided with means of transport for
the discharge of the activities covered by the four cost
(204) Finally, the Commission observes that very existence of
categories, on the basis of statistical data elaborated by its
cost category 4b of the Financing Guidelines (which
expert. These data were then adjusted by VRR taking
allows for the compensation of additional costs
account of certain (e.g. regional) specificities. At the
resulting from the politically induced application of pay
end of the analysis VRR establishes a margin for
scales which are above the pay scales normally observed
average market prices in the various cost categories.
in the market) indicates that transport undertakings in
VRR pay salaries which are above the salaries that are
usually observed in the market. Germany has confirmed
that RBG and BSM pay such salaries and receive compen
sation payments under cost category 4b.
(200) In this context, the Commission firstly notes that the use
of statistical data aims at ensuring that the compensation
was established with reference to the costs of a typical
undertaking.
(205) In conclusion, the evidence which the Commission has
received does not show that the level of compensation
has been calculated by comparing the costs incurred by
(201) Secondly, all the operators which provide public
RBG and BSM with a well run undertaking. The level of
transport services have a licence and/or a public service
compensation therefore has not been calculated with
contract and must fulfil certain requirements imposed on
reference to a well run undertaking.
them by the licences and/or public service contracts
(e.g. they must have been adequately provided with
means of transport to meet the necessary quality
requirements).
(206) The Commission therefore concludes that the fourth
Altmark criterion is not satisfied in respect of the
payments made to RBG and BSM as compensation for
(202) However, as mentioned in the decision to open the
the discharge of public service obligations.
procedure, the use of the statistical transport cost
cannot per se lead to the conclusion that operators who
have agreed to provide services under these parameters
should be considered well managed carriers. The stat
istical data which served as the basis for establishing
9.2.5. CONCLUSION
this amount concern only the actual costs of transport
services in the different regions (Germany and Austria) in
(207) As the fourth Altmark criterion is not fulfilled, the
2003. Therefore, there is no proof that an average of
Commission considers that the financing system in
these costs represents the costs of an efficient under
question has granted an economic advantage to RBG
taking. The Commission also came to this conclusion
and BSM.
in its final decisions in case C 3/08 Southern Moravia
Bus Companies ( 39 ) and case C 16/07 Postbus AG ( 40 ).
The reasons set out in recitals 85 and 86 of the latter
Decision are also valid for the present Decision.
9.3. DISTORTION OF COMPETITION
(208) The financing system might lead to a distortion of
competition since the public financing strengthens the
(203) Furthermore, the Commission observes that the statistical
position of the operators entrusted with the public
data were established for the year 2003 and then
service obligation and allows them to use these
updated annually according to an index in accordance
advantages for a prolongation of the entrustment
with Annex 9 to the Financing Guidelines and
whereas competitors could not use these advantages
according to volume increases/decreases and changes in
when applying for an entrustment. The fact that the
structures. The index uses a statistical price index by
companies may be qualified as in-house companies
does not impede a possible effect on competition since
( 39 ) Decision of 26 November 2008 (OJ L 97, 16.4.2009, p. 14).
these companies act in a market together with other
( 40 ) Decision of 26 November 2008 (OJ L 306, 20.11.2009, p. 26).
public and private companies.

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Official Journal of the European Union
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(209) In addition, the operators which receive financing might
(214) The Commission further observes that the public
use these advantages in order to compete with other
financing granted to the transport undertakings RBG
companies in other markets.
and BSM by VRR, which constitutes an economic
advantage for them, strengthens their financial situation.
This strengthened financial situation allows them to
maintain the supply of transport services. It also has
9.4. EFFECT ON TRADE BETWEEN MEMBER STATES
the result that other undertakings from Germany as
well as from other Member States have less chance of
(210) According to settled case law, trade between the Member
providing their transport services in the market served by
States must be regarded as affected when a measure
these two transport undertakings (the Düsseldorf area),
constituting an advantage strengthens the position of
although it is legally possible for them to do so.
an undertaking compared with other undertakings
competing in intra-Union trade ( 41 ). Such strengthening
of the position of the recipient undertaking compared
with other competing undertakings in intra-Union trade
will therefore not only (threaten to) distort competition
(215) Therefore, the Commission concludes that the financing
of public service compensation for RBG and BSM
but also affect trade between the Member States ( 42 ).
strengthens their position compared with other under
takings competing in intra-Union trade and that it
therefore affects trade between the Member States.
(211) It is consequently necessary to assess whether the
financing granted to the transport undertakings RBG
and BSM by VRR constitutes an economic advantage
which strengthens the position of these undertakings
9.5. CONCLUSION
compared with other undertakings competing in intra-
Union trade.
(216) For the reasons set out above, the Commission concludes

that the financing granted to RBG and BSM by VRR for
discharging the public service obligation constitutes State
aid within the meaning of Article 107(1) TFEU.
(212) At the outset of the analysis, the Commission recalls that
the market for the provision of local public transport
services in Germany in which these undertakings are
operating is a market opened up to competition from
10. COMPATIBILITY OF THE AID WITH THE INTERNAL
undertakings established in other Member States (
MARKET

43 ).
(217) Article 93 TFEU envisages conditions of compatibility of
aid granted in the field of coordination of transport and
public service obligation in transport.
(213) Further, the Court of Justice stated in its Altmark
judgment:
(218) The Commission notes that, as Article 93 constitutes a
‘77. In this respect it must be observed, first, that it is
lex specialis with regard to Article 106(2), Article 106(2)
not impossible that a public subsidy granted to an
cannot therefore be applied to the public transport
undertaking which provides only local or regional
undertakings in question ( 45 ).
transport services and does not provide any
transport services outside its State of origin may
none the less have an effect on trade between
Member States.
(219) According to the Altmark judgment ( 46 ), Article 93 TFEU
could not be applied directly but only by virtue of
Council Regulations, in particular Regulation (EEC)
No 1191/69 or Regulation (EEC) No 1107/70.
78. Where a Member State grants a public subsidy to
an undertaking, the supply of transport services by
that undertaking may for that reason be maintained
or increased with the result that undertakings estab
(220) On 3 December 2009, Regulation (EC) No 1370/2007
lished in other Member States have less chance of
entered into force. This Regulation also repealed Regu
providing their transport services in the market in
lations (EEC) No 1191/69 and (EEC) No 1107/70.
that Member State …’ ( 44 ).
( 45 ) See recital 17 of Commission Decision 2005/842/EC of
( 41 ) Case 730/79 Philip Morris v Commission [1980] ECR 2671,
28 November 2005 on the application of Article 106(2) TFEU to
paragraph 11; Case T-214/95 Het Vlaamse Gewest v Commission
State aid in the form of public service compensation granted to
[1998] ECR II-717, paragraph 50.
certain undertakings entrusted with the operation of services of
( 42 ) Case 730/79 Philip Morris v Commission [1980] ECR 2671,
general economic interest (OJ L 312, 29.11.2005, p. 67).
paragraph 12.
( 46 ) Case C-280/00, cited above, paragraph 107. See also Case T-
( 43 ) Case C-280/00 Altmark, cited above, paragraph 79.
157/01 Danske Busvognmnd v Commission [2004] ECR II-917,
( 44 ) Case C-280/00, cited above, paragraphs 77-78.
paragraph 100.

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(221) Regulation (EC) No 1370/2007 applies to the compen
exception to the application of Article 8(2) of the Regu
sation of public service obligations concerning public
lation, which concerns the application of the provisions
passenger transport services by rail and other track-
of Article 5 on the award of contracts. It should be noted
based modes and by road. Therefore, the Commission
that these exceptional transitional arrangements for the
has to assess the compatibility of the measures in the
award of contracts would not have been necessary if
present case with the internal market on the basis of
public service contracts awarded before the entry into
Regulation (EC) No 1370/2007, the instrument in force
force of the Regulation did not fall within its scope.
at the time of the Commission’s decision.
On the contrary, Article 8 thus confirms that the other
provisions of the Regulation apply to such contracts.
(222) Regulation (EC) No 1370/2007 lays down the conditions
under which competent authorities may compensate
(227) Thirdly, the Commission points out that its notice on the
determination of the applicable rules for the assessment
public service obligations for passenger transport
of unlawful State aid (
rendered through public service contracts. In the

47 ) is not applicable in the present
case. The notice states expressly that it is without
present case, the public service obligations have been
prejudice to the interpretation of Council and
imposed by the so-called threefold act of entrustment
Commission regulations in the field of State aid. And
(i.e. by means of licences, the Local Public Transport
Regulation (EC) No 1370/2007 specifically lays down
Schemes and the respective financing notice by VRR
rules for its temporal application.
based on VRR’s Financing Guidelines).


(228) Fourthly, the Commission points out that the Court of
(223) The Commission notes further that the interested party
Justice has confirmed the principle that new rules apply
has not contested the applicability of Regulation (EC)
immediately to the future effects of a situation which
No 1370/2007 in the present case. The Commission
arose under the old rule. The Court has also held that
also notes that Germany is of the opinion that Regu
the principle of legitimate expectations cannot be
lation (EC) No 1370/2007 should in principle apply
extended to the point of generally preventing a new
only to payments disbursed as from 3 December 2009.
rule from applying to the future effects of situations
which arose under the earlier rule ( 48 ).
(224) After examining the arguments advanced by Germany,
(229) Fifthly, the Court has held that the substantive rules of
the Commission has come to the conclusion, however,
Community law must be interpreted as applying to
that they do not call into question the ratione temporis
situations existing before their entry into force only in
application of the State aid rules, according to which the
so far as it clearly follows from their terms, their
Commission must base its reasoning on the law
objectives or their general scheme that such effect must
applicable at the time when it takes its decision. The
be given to them ( 49 ). As indicated in recital 228, this last
Commission considers that the public service contracts
condition is clearly fulfilled in the case of Regulation (EC)
must be examined on the basis of Regulation (EC)
No 1370/2007.
No 1370/2007 for the following reasons:
(230) Sixthly, the Commission points out that, in the same
(225) Firstly, the Commission points out that Regulation (EC)
judgment, the Court concluded that, where the law in
No 1370/2007 itself provides for the procedures
force at the date on which the notification of a
concerning its entry into force and its ratione temporis
Member State’s proposed aid scheme took place
application. Pursuant to its Article 12, Regulation (EC)
changes before the Commission takes its decision, the
No 1370/2007 entered into force on 3 December 2009.
Commission must decide on the basis of the new
By virtue of Article 10(1), Regulation (EEC) No 1191/69
rules ( 50 ). The Court has further held that the notification
was repealed on the same date. Hence the Commission
by a Member State of a proposed aid scheme does not
can no longer base its assessment on Regulation (EEC)
give rise to a definitively established legal situation or a
No 1191/69, as it was no longer in force at the time
legitimate expectation which requires the Commission to
when it adopted its decision; instead, it must base its
rule on the compatibility of the aid with the internal
assessment on Regulation (EC) No 1370/2007.
market by applying the rules in force at the date on
which that notification took place. Consequently, it
would be contradictory to allow a Member State which
has not complied with the obligation to notify to create a
definitively established legal situation by granting
(226) Secondly, the Commission points out that Regulation
unlawful aid.
(EC) No 1370/2007 contains no indication that it does
not apply to public service contracts concluded prior to
its entry into force. Article 8(3) of Regulation (EC)
( 47 ) OJ C 119, 22.5.2002, p. 22.
No 1370/2007 thus lays down transitional arrangements
( 48 ) See the judgment in Case C-334/07 P Commission v Freistaat Sachsen
[2008] ECR I-9465, paragraph 43.
for contracts which were awarded before the Regulation
( 49 ) Case C-334/07 P, cited above, paragraph 44.
entered into force. This provision is in reality an
( 50 ) Case C-334/07 P, cited above, paragraph 53.

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(231) Consequently, Regulation (EC) No 1370/2007 is
discharging the public service obligation in the negative
applicable in the present case ( 51 ).
financing notice, in an objective and transparent manner,
stating the maximum amount for each of the cost
categories concerning each transport area.
10.1. COMPATIBILITY OF THE AID WITH THE INTERNAL
MARKET ON THE BASIS OF REGULATION (EC) No
1370/2007
(238) Article 4(1)(c) and Article 4(2) – Arrangements with regard to
(232) According to Article 9(1) of Regulation (EC) No
the allocation of costs and revenues: On the basis of the
1370/2007 ‘public service compensation for the
parameters referred to above, there are clear
operation of public passenger transport services … paid
arrangements with regard to the allocation of costs and
in accordance with this Regulation shall be compatible
revenues that relate to the four cost categories for which
with the common market.’ In what follows, the
compensation is paid. For each of the four different
Commission will examine whether the Financing
categories of public service obligations costs and
Guidelines and the compensation paid on their basis to
revenues are allocated separately, in separate accounts,
RBG and BSM fulfil the requirements set out in Regu
using standard accounting principles applicable under
lation (EC) No 1370/2007.
German law, with an annual examination by certified
public accountants and VRR.
(233) Pursuant to Article 3(1) of Regulation (EC)
No 1370/2007, ‘where a competent authority decides
to grant the operator of its choice an exclusive right
(239) Article 4(3) – Duration of public service contracts shall be
and/or compensation, of whatever nature, in return for
limited to 10 years for bus and coach services and 15 years
the discharge of public service obligations, it shall do so
for passenger transport services by rail or other track-based
within the framework of a public service contract.’
modes: Originally, the public service obligations were

imposed by the so-called threefold act of entrustment
(i.e. by means of licences, the Local Public Transport
Schemes and the respective financing notice by VRR
based on VRR’s Financing Guidelines). Following the
(234) In the present case the public service obligations were
entry into force of Regulation (EC) No 1370/2007 they
imposed by the so-called threefold act of entrustment
have been summarised in a single public service contract
(i.e. by means of licences, the Local Public Transport
for each of the undertakings with a limited duration of
Schemes and the respective financing notice by VRR
10 years. For public service contracts which were already
based on VRR’s Financing Guidelines). The Commission
in place when Regulation (EC) No 1370/2007 entered
therefore concludes that Article 3 of Regulation (EC)
into force, transitional provisions apply. According to
No 1370/2007 is complied with.
Article 8(3)(d) of Regulation (EC) No 1370/2007, public
service contracts concluded as from 26 July 2000 and
before 3 December 2009 on the basis of a procedure
other than a fair competitive tendering procedure may
continue until they expire, provided they are of limited
(235) Article 4 of Regulation (EC) No 1370/2007 establishes
duration comparable to the durations specified in
the following mandatory content of public service
Article 4. In the present case, the contract was
contracts:
concluded in the period mentioned in Article 8(3)(d)
without a tendering procedure. Therefore, the limited
duration as set out in Article 4 applies. The duration
of the contract is now limited to 10 years; it therefore
(236) Article 4(1)(a) – Clearly defined public service obligation: As
complies with the requirements of Article 4(3).
indicated in Section 8.2.1, RBG and BSM were entrusted
with a clearly defined public service obligation.
(240) Article 4(5) – The requirement to comply with certain social
standards: The applicable collective agreements are
(237) Article 4(1)(b) – The parameters on the basis of which the
indicated in the respective acts since RBG and BSM are
compensation is calculated has to be established in advance in
obliged to apply the collective agreement concluded by
an objective and transparent manner in a way that prevents
the Municipal Employers Association of North Rhine-
overcompensation: As indicated in Section 9.2.2, the
Westphalia.
parameters for compensation are set out before
( 51 ) This corresponds also to the established decision-making practice of
the Commission (see Decision C 41/2008, Danske Statsbaner, final
decision of 24.2.2010, paragraphs 303-313) and of the EFTA
(241) Article 4(6) – The requirement to comply with certain quality
Surveillance Authority (see Decision 254/10/COL, AS Oslo
Sporveier and AS Sporveisbussene, decision of 21.6.2010, pp. 17
standards: Provisions on the quality standards are
and 18).
indicated in the respective acts of entrustment.

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(242) In the light of the considerations set out in recitals 54 et
incurred a deficit in discharging the public service obli
seq., the Commission considers that the threefold act of
gation. This deficit was in each of the years 2006-2009
entrustment includes all mandatory provisions provided
covered by compensation payments which led to a net
for by Article 4 of Regulation (EC) No 1370/2007.
profit of zero.
(243) Article 5 of Regulation (EC) No 1370/2007 contains
(249) The Commission further observes that in the present case
provisions on the award of public service contracts.
the undertakings in question do not receive a reasonable
However, according to the transitional provisions in
profit. The costs and revenues attributed to the public
Article 8(2) of Regulation (EC) No 1370/2007 the
service obligation are also audited so that they comply
award of public service contracts by rail and by road
with the accounting and tax rules in force. For trans
must comply with Article 5 only as from 3 December
parency reasons the undertakings in question have
2019. Thus, the provisions of Article 5 of Regulation
separate accounts for activities which fall within the
(EC) No 1370/2007 are not applicable in the present
public service obligation and for those which are
case.
outside the scope of the public service obligation.
(250) In view of the above, the Commission concludes that the
(244) The Commission would remind Germany that during
public service compensation avoids any overcompen
this transitional period Member States must take
sation and is in line with the requirements of Articles
measures to gradually comply with Article 5 of Regu
4 and 6 of Regulation (EC) No 1370/2007 and of the
lation (EC) No 1370/2007.
Annex to that Regulation.
(245) According to Article 6(1) of Regulation (EC)
(251) The Commission is therefore of the opinion that the
No 1370/2007, all compensation must comply with
general principles governing the assessment of compati
the provisions laid down in Article 4 and in the Annex
bility of the aid are complied with in the present case.
to the Regulation.
The Commission further notes that an assessment of the
public service compensation in favour of RBG and BSM
under Regulation (EC) No 1107/70 would lead to the
same conclusion.
(246) First, the Commission recalls that, as explained above, all
the provisions laid down in Article 4 were complied with
in the present case.
(252) Consequently, the Commission concludes that the aid in
favour of RBG and BSM is compatible with the internal
market under Article 93 TFEU and Article 9(1) of Regu
lation (EC) No 1370/2007.
(247) The Annex to Regulation (EC) No 1370/2007 provides
that the compensation may not exceed an amount corre
sponding to the financial amount composed of the
following factors: costs incurred in relation to the
public service obligation minus ticket revenue, minus
11. CONCLUSION
any positive financial effects generated within the
(253) The Commission finds that the aid is compatible with the
network operated under the public service obligation,
internal market under Article 9(1) of Regulation (EC)
plus a reasonable profit. In addition, the Annex
No 1370/2007 and Article 93 TFEU. The Commission
requires that costs and revenue be calculated in
points out that this Decision concerns the compatibility
accordance with the accounting and tax rules in force.
of the measures with the internal market as State aid and
Furthermore, for transparency reasons, there should be a
that this assessment does not prejudge the analysis by the
separation of accounts.
Commission of the application in this case of the Union
legislation on public contracts and concessions.
(248) In the present case, the Commission notes that the public
service compensation is calculated in line with the
(254) The Commission points out that, according to the settled
requirements of the Annex as described above in
case law of the Court of Justice, it can assess the
Section 9.2.3, and that the compensation payments did
compatibility of State aid with the internal market inde
not lead to any overcompensation. After calculating
pendently of any infringement of another provision of
receipts from tariffs, revenues, other positive financial
Union law provided that the latter is not so indissolubly
effects and the costs connected with the public service
linked to the object of the aid that it is impossible to
obligation, the outcome was that BSM and RBG annually
evaluate them separately.

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(255) In the present case, the Commission notes that any
Verkehrsverbund Rhein-Ruhr is compatible with the internal
infringement of the provisions on public contracts and
market under Article 9(1) of Regulation (EC) No 1370/2007
concessions such as the granting of the licences at issue
and Article 93 of the Treaty on the Functioning of the
to BSM and RBG would not necessarily have a distorting
European Union.
effect on competition which further increases the
distortion of competition resulting from the aid. This
Decision therefore confines itself to examining the State
Article 2
aid,
This Decision is addressed to the Federal Republic of Germany.
HAS ADOPTED THIS DECISION:
Done at Brussels, 23 February 2011.
Article 1
For the Commission
The State aid which Germany has implemented for Rheinbahn
AG and Bahnen der Stadt Monheim in the years 2006-2009 on
Joaquín ALMUNIA
the basis of the Richtlinie zur Finanzierung des SPV im
Vice-President

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