State aid - harbor beautification project
In practice, 5 conditions are derived, all of which must be met in order to constitute incompatible state aid:
- The support is provided through government/public funds.
- The grant is awarded to a beneficiary who is engaged in an economic activity/business.
- The support provides a financial benefit to the recipients.
- Support is selective,
- The aid distorts or threatens to distort competition in the market.
A project where the municipality bears the costs of beautifying the port's areas generally satisfies points 1 (public funds), 2 (the port as an economic enterprise) and 4 (selective, as the port is the only beneficiary besides the municipality).
However, it may seem more questionable whether a municipal beautification of a port area and the establishment of a marketplace and playground gives the port as a commercial port any economic advantage (point 3) or threatens to distort competition in the market (point 5).
The construction of a promenade, a playground and a marketplace hardly increases the value of the areas in question as port areas, as the port will in future be limited in exercising its economic port operations from these areas and using them for its statutory purpose of port-related activities, cf. section 6(2) of the Port Act.
A municipality's implementation of such a project would therefore immediately be a financial burden for the port in the form of reduced availability, reduced area rent and increased maintenance costs. The hypothetical benefit for the port in terms of potentially more guest sailors etc. does not immediately - either now or later - seem to exceed the economic disadvantages that will be associated with the project from the port's point of view. Thus, the crucial prerequisite of an economic benefit for the port does not seem to be met. Thus, on the face of it, there is more to suggest that the port's involvement will be "con amore" and without the prospect of achieving an economic benefit.
Furthermore, it is a requirement that the aid must distort competition in the market. In relation to the port's competition with other commercial ports/fishing ports, it must be assessed whether the project gives the port any competitive advantage. This does not seem to be the case in this specific case - on the contrary. In relation to other landlords, it may possibly be an advantage, but hardly of a significant nature when the economic disadvantages are taken into account.
In the specific case, it was therefore immediately assessed that the port did not receive state aid in connection with a beautification project.
The above is a concrete opinion and if concrete decisions are to be made, it will need to be investigated further.
