IP/06/1387

Brussels, 13 October 2006

Commission approves a prolongation of UK aid encouraging movement of intermodal containers by rail

The European Commission authorised today a prolongation of an aid scheme to support the movement of intermodal containers by rail in Great Britain. The aid promotes the transfer of traffic flows from road to rail. It is in line with the objectives of the Commission’s transport policy which encourages the development of rail and other environmentally friendly modes of transport as competitive alternatives to road haulage.

The objective of the aid scheme is to support the movement of intermodal containers by rail in the United Kingdom (Great Britain only). The grant will provide continued support for deep-sea, short-sea and domestic intermodal container business that currently uses rail. The aid should contribute to securing growth in this sector.

The “Rail Environmental Benefit Procurement Scheme” will replace two existing aid schemes, already approved by the Commission[1], and provides fixed grant rates which are payable in arrears for each container moved. For the purposes of the scheme, Great Britain is divided into 18 regions, each of which having its own region-to-region fixed grant rate. As a general rule, the grant will not exceed 30% of the total door-to-door rail-based costs.

Any company, whether or not owned or controlled by UK nationals, can apply for revenue support under the scheme if it is acting as operator or contractor of an eligible rail service. The allocated budget is GBP 20 million (€ 29 million) a year and the total amount of the budget is GBP 60 million (€ 87 million).

The notified scheme is limited to a three year period starting the 1st April 2007. Before the end of this period, an evaluation report will be submitted to the Commission to assess the prolongation of the scheme.

The Commission is of the opinion that the aid scheme fulfils all the requirements of EU legislation and is therefore compatible with the smooth functioning of the internal market.

^[1] Company Neutral Revenue Scheme (CNRS) was approved by the Commission on 16 December 2003, N 464/2003 and Access Grant scheme (TAG) was approved by the Commission in June 1993, N 162/93.