The European Commission has opened an in-depth probe to verify whether direct grants of EUR 44 million (USD 48.8 million) from Italy to the Port Authority of Naples were in line with EU state aid rules.

The grants were used to renovate the dry-docks rented out by the Port Authority of Naples to Cantieri del Mediterraneo (CAMED), a ship building and ship repair company, on the basis of a 30-year concession.

“The Commission’s preliminary view is that besides the Port Authority, also CAMED may have benefitted from these grants via the concession agreement. Indeed, in the absence of a tender for the use of the dry-docks, CAMED may use the refurbished facilities to provide ship repair activities for a price potentially below market rates,” the European Commission said.

Furthermore, the Commission said that this may have given both companies an economic advantage over their competitors and therefore involve state aid within the meaning of the EU rules.

Such aid may be found compatible with EU state aid rules if it furthers an objective of common interest, however, at this stage, the Commission has doubts that the ship repair service can qualify as a Service of General Economic Interest (SGEI).