EU ISSUES NEW GUIDELINES ON STATE AID FOR RAILWAY UNDERTAKINGS

On 30th April the European Commission issued new State Aid guidelines for rail operators. In relation to rolling stock, in principle the document rules out direct State Aid for freight railway undertakings and gives only limited licence for State Aid in connection with the acquisition of passenger rolling stock. Additional guidance is also given, particularly in relation to State guarantees for railway undertakings, which generally need to be removed within a defined period.

The result of this will be that, ultimately, all railways should be financing rolling stock on a commercial basis and this will make the introduction of the Luxembourg Rail Protocol in Europe particularly relevant – and helpful for all railway undertakings in Europe (whether State-owned or otherwise).