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E.U. Commission Finds No Aid Given to Antwerp Terminal Operators

Antwerp Gateway
Antwerp Gateway

By MarEx 2018-11-24 23:43:07

The European Commission has concluded that reductions in compensation payments granted by the state-owned Port of Antwerp to two container terminal operators were granted on market terms and hence do not involve state aid within the meaning of E.U. rules.

The Port of Antwerp is managed by the Antwerp Port Authority, a public authority, which is fully-owned by the city of Antwerp. The Authority makes land available to companies to operate in the port area on the basis of concession agreements.

In 2004, the Authority concluded concession agreements with two container terminal operators, PSA Antwerp NV and Antwerp Gateway NV, for 42 years. The agreements are similar to the concession contracts awarded by the Authority to other container terminal operators and include a requirement that a minimum quantity of containers is handled in each terminal every year.

Between 2009 and 2012, PSA Antwerp NV and Antwerp Gateway NV did not to reach their yearly minimum tonnage requirements. As a result, under the concession agreements, they would have been expected to pay compensation to the Antwerp Port Authority. However, instead of collecting the compensation due from the two companies, in March 2013, the Authority retroactively revised downwards the minimum tonnage requirements for the two companies. This reduced by around 80 percent the amount of compensation due by each of the two operators.

Following a complaint from a competitor, in January 2016, the Commission opened an investigation to examine whether the compensation reductions were in line with E.U. State aid rules and whether a private operator would have accepted a similar reduction (the market economy operator principle).

The Commission investigation found that in the context of the economic crisis a certain adjustment of the minimum tonnage requirements was justifiable, as container volumes and traffic decreased in all major ports in Europe, including in the Port of Antwerp. For the same reason, the Authority also adjusted the minimum tonnage requirements of other terminal operators.

PSA Antwerp NV and Antwerp Gateway NV were in a very specific situation compared to other operators active in the Port. As the concessionaires of a new area of the port (Deurganckdok), they were still in a start-up phase when the economic crisis started. This put the two companies in an even more challenging situation in the context of the economic crisis and further justified the adjustment to their minimum tonnage requirements, the investigation found.
  
The Port Authority was concerned that forcing the two concessionaires to pay the full amount of compensation could have had such a negative effect that it would put their relationship with the port at risk.

The investigation concluded that the size of the reduction of the minimum tonnage requirements and the methodology applied by the Antwerp Port Authority to determine these adjustments for the two concessionaires were in line with what a private market operator would have used and applied.

Therefore, the Commission found that the Antwerp Port Authority acted in the same way as a private market operator an that it did not constitute State aid.

Earlier this month, DP World Antwerp, operator of the Antwerp Gateway, announced that it would invest 197 million euros ($223 million) in the further expansion of the capacity of its terminal. The existing container terminal needs to expand by more than a third in order to meet the expected growth prognoses. DP World Antwerp wants to evolve from the current 2.5 million containers to 3.4 million units by 2023.