EU Agrees to Delivery Extension for Tankers

Thursday, September 08, 2005
The European Commission has decided to , allow an extension of the delivery date for two product/chemical tankers built at Estaleiros Navais de Viana do Castelo, Portugal in derogation from the EC Treaty state aid rules on shipbuilding. As a general rule, shipbuilding contracts signed before the abolition of operating aid in 2000 had to be executed at the latest by the end of 2003 in order to benefit from such aid, which could amount to up to 9% of the contract value, but derogations can be allowed under strict conditions. Due to the technical complexity of the construction of these two ships, the Commission decided that the strict conditions are met and approved an extension of the delivery dates.

Contract-related operating aid for shipbuilding was abolished in the EU in December 2000, but could still be paid for contracts signed at the latest by the end of December 2000 and executed before the end of December 2003. The Shipbuilding Regulation (Council Regulation 1540/98), which was in force at that time, stipulates that the Commission may grant an extension of the three-year delivery limit when this is found justified by the technical complexity of the individual shipbuilding project concerned or by delays resulting from unexpected disruptions of a substantial and defendable nature in the working programme of a yard due to unforeseen exceptional circumstances beyond the company’s control.

Portugal requested the Commission to grant an extension of the date for the delivery by Estaleiros Navais de Viana do Castelo of two product /chemical tankers. The vessels were originally due to be delivered in October and November 2003. On this basis, Estaleiros Navais de Viana do Castelo was awarded 9% contract-related operating aid by the Portuguese authorities for the building of the vessels.

The Commission’s investigation revealed that the technical complexity of the project justified the extension of the delivery deadline. Consequently, the Commission decided to authorise an extension of the delivery date, to 29 October 2004 for one tanker and to 5 February 2005 for the other.

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