Commission approves €1.5 billion Dutch scheme to compensate public transport companies for damages suffered due to coronavirus outbreak
The European Commission has approved, under EU State aid rules, a Dutch scheme of around €1.5 billion to compensate companies providing regional and long-distance public passenger transport services in the Netherlands for the damage suffered due to the coronavirus outbreak and the emergency containment measures introduced in the Netherlands to limit the spread of the virus.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “Continuing to provide transport services to citizens is essential during the coronavirus outbreak. This €1.5 billion scheme enables the Netherlands to compensate regional and long-distance public transport providers for the damage suffered due to the emergency measures put in place to limit the spread of the virus. We continue working with all Member States to ensure that national support measures can be put in place as quickly and effectively as possible, in line with EU rules. ”
The Dutch government has put in place emergency measures necessary to limit the spread of the coronavirus such as the closure of schools and childcare centres, the closing of various economic activities such as cafes and restaurants, extended home office arrangements, social distancing rules and restrictions on gatherings and events. This has severely affected regional and long-distance public transport services, as passenger numbers in local public transport fell to levels as low as 90% of 2019 numbers, resulting in a significant drop in revenues. At the same time, transport operators continued to incur various costs, as throughout the pandemic they provided a sufficient frequency of passenger transport services and thereby ensured mobility of people without access to alternative means of transport. The situation was exacerbated by additional costs incurred by transport operators in relation to measures aimed at containing the spread of the contagion, such as enhanced sanitary and hygiene measures. All of this led to serious liquidity problems, which risk driving many of the transport operators out of the market.
The Dutch scheme is designed to compensate each operator providing public transport services based on a contract with regional or national authorities for the damages suffered while fulfilling their contractual obligations under the circumstances determined by the coronavirus outbreak and the resulting containment measures. Under the scheme, transport companies will be entitled to compensation in the form of direct grants for damages incurred between 15 March and 31 August 2020. The Netherlands will ensure that no individual transport operator receives more in compensation than it suffered in damages and that any payment in excess of the actual damage is recovered.
The Commission assessed the measure under Article 107(2)(b) of the Treaty on the Functioning of the European Union (TFEU), which enables the Commission to approve State aid measures granted by Member States to compensate specific companies or specific sectors (in the form of schemes) for the damages directly caused by exceptional occurrences.
The Commission considers that the coronavirus outbreak qualifies as such an exceptional occurrence, as it is an extraordinary, unforeseeable event having a significant economic impact. As a result, exceptional interventions by the Member States to compensate for the damages linked to the outbreak are justified.
The Commission found that the Dutch aid scheme will compensate damages that are directly linked to the coronavirus outbreak. It also found that the measure is proportionate, as the envisaged compensation does not exceed what is necessary to make good the damage.
The Commission therefore concluded that the scheme is in line with EU State aid rules.