France aid granted to ALSTOM and RATP joint subsidiary METROLAB is in line with EU State aid rules

Brussels, Belgium, 20-11-2013 — /EuropaWire/ — The European Commission has decided that aid granted by France to ALSTOM and the Régie Autonome des Transports Parisiens (RATP) – through their joint subsidiary METROLAB – for the implementation of the research and development (R&D) project Métro du Futur (‘Metro of the Future’) was in line with EU State aid rules. The project aims to develop a fourth-generation automated metro system, i.e. one which is ‘fully automatic’ and driverless. The aid addresses a genuine market failure without giving rise to an undue distortion of competition.

Commission Vice-President in charge of competition policy, Joaquín Almunia, said: ‘With the ‘Metro of the Future’, users will have access to a more efficient, more attractive and more energy-efficient urban transport system. By encouraging the switch from private cars to public transport, the research project will contribute to the EU’s environmental and energy security objectives, while limiting the risk of distorting competition.’

When the ‘Metro of the Future’ project is completed, the manufacturer (ALSTOM) and the transport network operator (RATP) will offer large agglomerations a new generation technological solution to meet their urban transport needs: these new automatic metro lines will be totally automated, innovative, more environmentally-friendly and they will have the capacity to evolve over time. The rolling stock will consume less energy and emit fewer fine particles.

Each of the two partners will receive EUR 7.6 million in State aid, i.e. EUR 15.2 million in total granted to their joint R&D subsidiary, METROLAB, set up to carry out the project : EUR 5.0 million in grants for industrial research and EUR 10.2 million in recoverable advances for experimental development.

The Commission examined the compatibility of the aid in relation to the Guidelines for state aid for research and development and innovation (R&D&I guidelines, see IP/06/1600 and MEMO/06/441).

After scrutiny, the Commission concluded that the ‘Metro of the Future’ project suffered from market failures, in view of, among other things, information asymmetry and problems with coordination between R&D partners and with knowledge spillover. The research bodies involved in the project will make some of the research results freely available to the public through publications and academic training. The aid awarded is considered to be both necessary and sufficient to encourage the two partners to carry out an R&D project which they would not have launched spontaneously. Bringing together a manufacturer (ALSTOM) and an operator (RATP) of metro systems is in fact an unusual means of encouraging innovation in this particular sector. Without State aid, the project would have been less ambitious from a technical standpoint. Finally, the Commission was able to rule out the risk of distortion of competition, essentially in view of the small market shares in the international market in automatic metro systems held by the partners, both on the demand (RATP) and supply (ALSTOM) side.

Background

The idea behind the ‘ automation ‘ of a metro is to transfer responsibility for the operating process from a human driver to a computerised system . Varying degrees of automation are therefore possible, on a scale running from zero, corresponding to manual operation, up to 4, corresponding to complete unmonitored automation, in which case the system is able to deal with potential disruptions by itself. It is precisely this final step to complete the transition to ‘full automation’ which the ‘Metro of the Future’ intends to take. This is a huge technological leap compared with the current solutions, which were developed in the 1980s and brought into common usage from the year 2000.

ALSTOM and the RATP will manage the ‘Metro of the Future’ project in cooperation with a number of research bodies (in particular IFSTTAR, ENSAD and numerous CNRS laboratories in France, together with the TNO laboratory in the Netherlands). Some information on headway made by the project will be disseminated in scientific publications and through high level academic training, thereby helping to improve the European Union’s technological knowledge base.

The non-confidential version of today’s decision will be made available under case number SA.35092 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of State aid decisions on the Internet and in the Official Journal are listed in the ‘State aid Weekly e-News’.