UK state aid Channel Tunnel rail freight services
Brussel, BelgiÃ« – The European Commission approved today a state aid measure by the UK government in favour of the company English Welsh Scottish Railway International Ltd (EWSI), which currently provides cross-Channel rail freight services. The aid serves to compensate EWSI for infrastructure expenditure that other rail transport operators are not burdened with and is necessary to ensure the continued provision of rail freight services through the Channel Tunnel. The aid is therefore considered compatible with the EU state aid rules and promotes the broader European objective of developing a sustainable transport system with better performing rail services.
The aid is a time-limited extension of the financial arrangements available to EWSI for the payment of the â€œMinimum User Chargesâ€ to use the Channel Tunnel. Through these financial arrangements approved by the European Commission in 1998, the UK Strategic Rail Authority undertook to pay the Minimum User Charges on behalf of EWSI until 30 April 2005.
The Minimum User Charges are payable to Eurotunnel until 30 November 2006 irrespective of the actual use of the Tunnel. They were devised to contribute to the original project financing requirements for the Tunnel, in addition to recovering the direct infrastructure costs of running trains through it.
Today, the freight traffic through the Tunnel is not yet sufficient for EWSI to bear the cost of these charges, which for the period 1 May 2005 â€“ 30 November 2006 is estimated to be â‚¬ 60 million. Therefore, in order to ensure the continued operation of rail freight services through the Channel Tunnel, the UK authorities have agreed to pay the charges on behalf of EWSI until 30 November 2006. EWSI will use its best endeavours to keep the freight services at a level, at least broadly equivalent to that of today and will reduce entry barriers to cross-Channel freight services by making traction available to other rail operators at market rates.