BULGARIA: The European Commission has launched an in-depth investigation into whether a subsidiary of Chinese state-owned rolling stock group CRRC received unfair subsidy enabling it to submit a low bid for a contract.
The investigation announced on February 16 is the first under the Foreign Subsidies Regulation, which obliges companies to notify the Commission if the value of a public tender in the EU exceeds €250m, and the company was granted at least €4m in foreign financial contributions from at least one third country in the three years prior to notification.
Bulgaria’s Ministry of Transport & Communications is planning to award a contract for the supply and maintenance of 20 electric push-pull trainsets. In December Talgo submitted a bid of 1·22bn leva, while CRRC Qingdao Sifang Locomotive’s bid was much lower at 607m leva.
The Chinese company notified the Commission on January 22. Following a preliminary review, the Commission said ‘there are sufficient indications that this company has been granted a foreign subsidy that distorts the internal market’ by enabling it to submit an ‘unduly advantageous offer’.
The Commission has 110 working days — until July 2 — to take a final decision. It may then accept commitments proposed by the company to remedy any distortion, or it may prohibit the award of the contract. It also has the option to issue a no-objection decision.
‘European openness presupposes that everyone plays by the rules’, said Commissioner for Internal Market Thierry Breton. ‘Ensuring that our EU Single Market is not distorted by foreign subsidies to the detriment of competitive firms that play fair is vital for our competitiveness and economic security.’
