Article 4
This Decision is addressed to the French Republic. Done at Brussels, 30 October 2001. For the Commission Loyola de Palacio Vice-President (1) OJ C 117, 21.4.2001, p. 9. (2) OJ L 83, 27.3.1999, p. 1. (3) OJ L 364, 12.12.1992, p. 7. (4) OJ C 62, 4.3.1999, p. 9. (5) OJ C 117, 21.4.2001, p. 9. (6) The group is made up of the following companies: CGHT (100 % subsidiary), Sudcargos (50 %), Sara (89 %), Sotramat (100 %), Ferrytour (97 %), MCM (100 %), Cofremar (50 %), Corsica Marittima (95 %), SNCM Germany (50 %), Navitel (99 %), CMN (40 %), Someca (40 %), Sitec (35 %) and Esterel (13 %) (see the group's accounts). (7) For the purposes of this Decision, the term "SNCM" means the company which carries out these activities, while the term "SNCM-Ferryterranée" refers to the group, including all the subsidiaries mentioned in footnote 6. (8) In addition to the routes Genoa-Bastia and Livorno-Bastia, Corsica Marittima operated on the following routes: in 1997, Bastia-Island of Elba, Livorno-Porto-Vecchio, Bonifacio-S. Teresa (Sardinia), Genoa-Tunisia and, in 1998, Livorno-Porto-Vecchio, Genoa-Tunisia. (9) Report to the Office des transports de la Corse (OTC), Suivi de la dotation forfaitaire de continuité territoriale, May-July 2000. (10) Tourists constitute approximately 85 % of the maritime passenger traffic. Residents constitute the remaining 15 % (source: Direction régionale de l'équipement). (11) Law of 30 July 1982 conferring special status on the region of Corsica. (12) Law of 13 May 1991 conferring status on the territorial community of Corsica. (13) These are clauses and conditions which remain in force in the five-year agreements concluded by the OTC. (14) There is provision for stepping up the service in some periods (school holidays, long weekends). The agreement provides for a period for trying out high-speed vessels. Some services may be stepped up by additional connections according to the forecast demand. (15) The other crossings are provided by Compagnie méridionale de navigation. (16) The numbers of seats for passengers are not indicated in the agreements. The figures given here are an extrapolation taking into account the number of imposed crossings and the capacity of the vessels designated for the public service. (17) Source: SNCM's audited accounts. (18) Conditions governing the State's financial contribution, given in clause IV of the five-year agreement between SNCM and the OTC for the period 1996-2001. (19) Some of these ro-ro ferries can also transport passengers. (20) In addition to the Genoa-Bastia and Livorno-Bastia routes, Corsica Marittima was operating on the following routes: in 1997, Bastia-Island of Elba, Livorno-Porto-Vecchio, Bonifacio-S. Teresa (Sardinia), Genoa-Tunisia and, in 1998, Livorno-Porto-Vecchio, Genoa-Tunisia. (21) Decision No 4/98 of 6 November 1998 by the Management Board of the Office des transports de la Corse (OTC). (22) A file on "clandestine price-cutting by Corsica Marittima" was supplied to the Commission. (23) Agreement for the period 1991-1995, p. 20. (24) Hearing of Mr Piazza-Alessandrini, Chairman of the Office des transports de la Corse (OTC), by the national Parliament's fact-finding mission on Corsica on 21 April 1997. (25) See the report of the OTC inspector and the analysis made by Mr Ménestrier and contested by SNCM (see recital 46). The comments received refer in particular to the resale of the Esterel in 1997 and the indemnity paid by the insurance company following the total loss of the Monte Stello in 1994. (26) Whereas it can reach 100 % in the direction of Marseilles to Ajaccio during the first week of August. (27) Port limited to vessels less than 175 m long. (28) OJ L 378, 31.12.1986, p. 1. SNCM operations between Corsica and the French mainland within the context of the 1976 agreement are considered maritime cabotage. Scheduled passenger transport services and ferry transport along the French coasts have been open to all operators since 1 January 1999 pursuant to Regulation (EEC) No 3577/92. (29) OJ L 353, 17.12.1990, p. 16. (30) The countries concerned are Tunisia and Algeria, whose maritime relations with France have been governed for a long time by shared cargo agreements between the national maritime companies. These agreements were cancelled to make way for traffic liberalisation in 1987 in the case of Algeria and 1988 in the case of Tunisia. (31) See the judgment of the Court of First Instance of the European Communities of 27 February 1997, Fédération française des sociétés d'assurances (FFSA) et al. v. Commission, T-106/95, [1997] ECR, p. II-229, point 165. (32) See in particular the judgment of the Court of Justice of the European Communities of 22 June 2000, Aid to the Coopérative d'exportation du livre français (CELF), C-332/98, [2000] ECR, p. I-4833. (33) OJ C 74, 10.3.1998, p. 9. (34) See the abovementioned judgment "FFSA", point 173. (35) See the abovementioned judgment "FFSA", point 173, and the Judgment of the Court of Justice of 10 December 1991, Merci convenzionali porto di Genova, C-179/90, [1991] ECR, p. I-5889, point 26. (36) Judgment of the Court of Justice of 20 February 2001, Asociación Profesional de Empresas Navieras de Líneas Regulares (Analir) et al. v. Administración General del Estado, C-205/99, [2001] ECR, p. I-1271, point 34. (37) See the abovementioned judgment "Analir", point 27. (38) Including five from Marseilles (to Porto-Vecchio, Propriano, Bastia, Ajaccio and Balagne), three from Toulon (to Propriano, Bastia and Ajaccio) and three from Nice (to Bastia, Calvi and Ajaccio). (39) Évolution structurelle de l'offre "passagers" sur les lignes maritimes françaises, saison 2001 (document dated April 2001). (40) Particularly HSVs, with up to 1700 seats. (41) See recital 120. (42) See the third paragraph of Section 9 of the Community Guidelines on State aid to maritime transport and the Commission Decisions of 19 July 2000 in Case C-10/98 - Spain, New maritime public service contract (not yet published in the Official Journal) and of 6 August 1999 in Case C-64/99 - Italy, Gruppo Tirrenia di Navigazione (OJ C 306, 23.10.1999, p. 2). (43) PWC report entitled "Analysis of the profitability of some French cabotage lines". (44) Corsica Marittima has its own headquarters whose structural costs it sustains. Consignment expenses and other maritime expenses with regard to the vessels which it uses (i. e. direct costs, including port charges, fuel, etc.) are also borne directly by Corsica Marittima. (45) In accordance with the legislative and regulatory framework applicable in France (Law of 3 January 1985 and implementation decrees) and with the Order of 9 December 1986 issued following the opinion of the Conseil national de la comptabilité. (46) See the reports of the OTC auditor, the report of SNCM's auditors and the reports of the French Court of Auditors. Any use of the territorial continuity subsidy for purposes other than those of connections with Corsica would be contrary to French law. (47) Audited accounts, analytical accounts of SNCM, reports from SNCM to the OTC and Mr Ménestrier's reports to the OTC. (48) The 1991 agreement with the OTC set out the following formula: "the annual instalment for each of the vessels deployed on territorial continuity has been determined from the financial criteria habitually taken into account for long-term contracts. It is established on the basis of the true cost price of the vessel in francs, less a residual value of 10 % at the end of the period and by agreement includes a net interest rate of 7 % for the change in the market price of GDP. The duration is 16 years for ferries and 14 years for ro-ro ships". (49) The returns calculated on the GDP price variation index have been on average lower than the returns resulting from the rates applied on the capital markets during the years in question. (50) See the Ménestrier report, p. 179, and the PWC report, p. 19. (51) See the Ménestrier report, p. 179. (52) See the Ménestrier report, p. 179, and the PWC report, p. 19. (53) Subject to the reservation of recital 108. (54) See recital 102. (55) See the abovementioned "FFSA" judgment, point 192. (56) Their use is confined to the restricted time periods when vessels are available. (57) The French authorities have justified these differences by the nature of the vessels leased. They say that the HSVs correspond precisely to the demand expressed by Corsica Marittima. In the case of cargo vessels, on the other hand, only the passenger section (which is only accessory) is of commercial interest. Similarly, the capacity offered by SNCM's car ferries in the middle of the week is much greater than the ad hoc requirements of Corsica Marittima. (58) The crews of cargo ships that have stopped at the end of the week in Corsica do not go ashore for a day and the same applies to the crews of car ferries in the middle of the week. (59) Judgment of the Court of Justice of 11 July 1996, Syndicat français de l'Express international (SFEI) et al. v. La Poste et al., C-39/94, [1996] ECR, p. I-3547, point 62. (60) The analysis must be performed abstracting from the various privileges and aids, etc. of the service company. (61) See the judgment of the Court of First Instance of 14 December 2000, Union française de l'Express (Ufex) et al. v. Commission, T-613/97, [2000] ECR, p. II-4055, point 70. (62) These are, on the one hand, "bare boat" chartering of HSVs and cargo ferries in the high season for short periods in the Mediterranean (particularly in Greece, Italy, France, Spain and Tunisia) in recent years and, on the other hand, the costs of commissioning and equipping these ships. (63) The Commission's third report on the implementation of Regulation (EEC) No 3577/92 applying the principle of freedom to provide services to maritime transport within Member States (maritime cabotage) (1997-1998) (Document COM(2000) 99 final of 24.2.2000) notes that the costs of manning French vessels are among the highest in Europe. It turns out that the wage bill and taxes borne by SNCM (ships flying the French flag) are clearly higher than the corresponding costs of private shipowners who operate according to market conditions and whose vessels fly a cheaper flag. (64) In the case of HSVs, the market prices obtained are lower than the leasing price paid by Corsica Marittima. They amount to approximately 70-80 % of that price. The disparity is even more pronounced in the case of cargo ferries. (65) See the abovementioned "Ufex" judgment, point 75. (66) FRF 13,3 million in 1999. (67) OJ S 236, 8.12.2000. (68) See recital 77. (69) As already indicated in recital 100, the territorial continuity subsidies have permitted the partial financing of the fleet through financial charges related to the financing of vessels and related depreciation in the capital charges. According to these rules, ships are depreciated on a reducing-balance basis over the following periods: 12 years for conventional and ro-ro ferries, 20 years for the Napoléon Bonaparte and 10 years for high-speed vessels.