How the “controversy” of four Greek industries with ETVA VI.PE. brought the Commission’s response

By Giorgos Lampiris

Prevalence at the European level, with the seal of the Commission and the European Competition Authority, is for ETVA Industrial Areas (ETVA VI.PE.), against industrial companies that had appealed to the European authority, the recent decision of Brussels issued on August 10 . According to information obtained from a Capital.gr report, against ETVA VI.PE. the paper mill of Komotini ELINA, the furniture company of Serres Dromeas ABEEA, the Larissai By-Products Industry of Slaughterhouses (LAVYS ABEE) as well as another industry based in the Industrial Area of ​​Sindos had appealed. The appeal was carried out jointly with the Panhellenic Association of Industrial Area Businesses (PASEVI).

The allegation of monopoly

The object of the appeal to the Commission concerned the claim that ETVA VI.PE. is a business with a monopoly character and exploits the benefits that derive from this fact. We remind you that ETVA VI.PE. was created in 2003 with the spin-off of the industrial areas sector from ETVA bank and its share capital is 65% owned by Piraeus Bank and 35% by the State, a percentage controlled by the Super Fund. Its activity is the management of business and industrial parks nationwide.

In the same appeal, the aforementioned companies noted, among other things, that they are deprived of the possibility to do business with an alternative provider instead of ETVA VI.PE.

The case has been ongoing since 2019

The tangle of this case began to unravel in 2019, when the European Commission received a complaint from the aforementioned companies, which operate in industrial park facilities managed by ETVA BIPE in our country.

Among their claims were that certain measures taken by the Greek government constituted illegal state aid in favor of ETVA VI.PE. In particular, the complainants challenged the compatibility with state aid rules of the Greek authorities’ decisions on:

-to allow the application of certain operating conditions (e.g. management fee and reserve fund) in the industrial parks where the complainants are established

-rejection of the application of certain companies that wanted to take over the management of a building block located in one of the industrial parks.

The decision of the Commission

Examining the provisions of European legislation, the Commission found that the possibility of ETVA VIPE to charge companies established in the industrial parks it manages with a management fee and with a fee for setting up a reserve fund per industrial park, does not constitute state aid, as the fees do not come from state resources. In particular, in this particular case the Commission considered that the charges are made by a private company such as ETVA, which offers services at a reasonable profit, the margin of which amounts to 20%.

“Yes” to the possibility of stopping the water supply for those who are inconsistent

At the same time, it ruled that ETVA VIPE’s ability to impose sanctions (e.g. interruption of access to water) to companies located in the industrial parks it manages, when the established industries appear inconsistent in their obligations, does not entail the transfer of State funds and therefore does not constitute State aid. The Commission considers in this case that the interruption of the water supply is reasonable as it is a remunerative service, for which the receiver should consistently pay the relevant consumption bill.

At the same time, the Commission was positioned, citing in its decision that the possibility of ETVA VIPE to charge the companies established in the industrial parks it manages, for common costs beyond their actual consumption and to calculate its management fee as a percentage of the common costs , does not constitute State aid, as it cannot be considered an advantage granted by the State.

Regarding the rejection by the Greek authorities of the request of certain companies to take over the management of a building block located in one of the industrial parks managed by ETVA VIPE, it does not imply, according to the Commission, the possibility of exploiting public resources and therefore does not constitute State aid.

The decision of the Greek Competition Commission is also pending

According to the Capital.gr report, the decision of the domestic Competition Commission is also pending, given that there is a similar appeal from the above companies and to the Greek Authority against ETVA VI.PE.

The development plan of ETVA VI.PE.

Regarding planning for the development of new industrial parks and areas by ETVA VIPE, the company currently maintains a fund that, according to sources close to it, exceeds 50 million euros (55 million euros in the last published 2020 balance sheet). The aim, according to the same sources, is to raise capital for investments either from the Recovery Fund, the SDAM (Just Development Transition Plan), or from private placement, or through development. We will remind you that the Just Development Transition Plan concerns areas with energy dependence on fossil fuels such as Megalopolis, Kozani, Florina.

At the moment, however, a discussion is underway with the Ministries of Finance and Development, as to the maximum amount from which ETVA could draw to subsidize investments from the above financial instruments.

The development of industrial parks in areas such as Megalopolis, Velestino, Ptolemaida, Attiki is under planning and study, but no decision has been made on definitive moves at the moment. At the same time, Malevizi in Heraklion, Crete is also being considered, as well as the upgrading of infrastructure in specific industrial areas. As far as Sindo is concerned, ETVA VI.PE. is studying the expansion of the industrial area in neighboring areas, while negotiating with EYATH to take over the management of the water and sewage networks and the waste treatment unit in the entire BI.PE. Sindou.