EC to investigate "illegal" Danish subsidy

International Railway Journal, Oct, 2008

AN investigation has been launched by the European Commission (EC) following accusations that Danish State Railways (DSB) has received illegal subsidies from the country's Transport Ministry.

Arriva and Connex have filed a complaint through Danish Collective Transport alleging that DSB has been exempted from a tax based on wage costs applied to companies that do not have to pay sales tax. This concerns the ministry's 2000-04 contract with DSB, as well as the current contract, which expires in 2015. The exemption is worth around DKr 100 million ($US 19 million) per year to DSB.

Questions were raised about the tax in parliament as long ago as November 2005, although the government took no further action on the issue until it received the EC's complaint last month.