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An investigation by the European Commission concluded that the parent company of CRRC, which is supplying materials to Mota-Engil for the construction of the Violet Line, benefited from subsidies in China that allowed it to present more competitive prices.
The European Commission identified evidence considered “sufficient” that the company Portugal CRRC, supplier of rolling stock to the consortium led by Mota-Engil, indirectly benefited from foreign subsidies as part of the competition for the construction of the Violeta line of the Lisbon Metro.
The in-depth investigation was opened at the beginning of November, after Brussels concluded, in a preliminary analysis, that this aid may have distorted the European Union’s internal market, as reported by .
According to the Commission, one of the main signs concerns the supply of goods and services through public contracts awarded to the parent company of Portugal CRRC, CRRC Tangshan, in the People’s Republic of China. These contracts will have a potentially exceeding 36 billion euros in the three years prior to notification of the competition. Brussels emphasizes that it was not possible to confirm whether these contracts resulted from competitive, transparent and non-discriminatory procedures, and it cannot therefore be excluded that they conferred a direct advantage to CRRC and indirectly to its subsidiary in Portugal.
Other signs point to the awarding state subsidies direct payments to CRRC, worth approximately 471 million euros, as well as significant tax benefits, namely a 10 percentage point reduction in the corporate income tax rate, applied continuously for at least three years. According to the Commission, these financial advantages reinforce the company’s competitive position on the European market.
The competition in question refers to the construction of the Violeta linea light surface metro between Loures and Odivelas, whose base price is 600 million euros. The consortium formed by Mota-Engil, Zagope and Spie Batignolles presented the lowest bid. The tender documentation also provided for an additional threshold of 60 million euros for the supply and maintenance of rolling stock.
Although Portugal CRRC claimed to be only a supplier and not a direct economic operator in the tender, the European Commission considers it a “main subcontractor”, given that secures essential componentss of contract execution, such as the supply and maintenance of trains. For Brussels, there are indications that the subsidies identified allowed the consortium to present an unduly advantageous proposal, affecting competition in the internal market.
