EUROPE: The European Com­mission is to determine whether public service contracts concluded between the Ministry of Transport and national railway DSB for the periods 2000-04 and 2005-14 amount to state aid.

Many DSB services are operated on the basis of public service contracts agreed without tendering. DSB is required to meet certain service level obligations, and the government provides compensation for the costs incurred.

The Commission said on September 10 that it 'has a duty to ensure that public service contracts do not result in over-compensation for the rail company, which would amount to granting it state aid.’

This follows the Altmark judgement of 2003 which clarified that state aid is permitted to reimburse the costs of meeting public service obligations, but must not be used to give the recipient organisation a competitive advantage.