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Corsican court set to rule on bid to stop ferry concession
The administrative court in the Corsican city of Bastia will rule today on applications from Corsica Ferries and Compagnie Méridionale de Navigation to stop the award of the subsidised public service ferry concession for lines between Corsica and the French mainland.
The Corsican transport office is thought to be preparing to award the concession early next month, but Corsica Ferries and CMN are trying to have the award suspended or cancelled, arguing that it is biased in favour of their rival SNCM.
CMN told the court at a hearing on Friday that there was an "obvious understanding" between the French state, the Corsican authority and SNCM's new owners, Butler Capital Partners and Veolia Transport, over the concession.
Butler Capital Partners and Veolia Transport have escape clauses allowing them to withdraw from SNCM's capital if the company fails to obtain the new concession, which is due to come into force on January 1, 2007 and to run until 2012.
If this were to happen, the company would be unlikely to survive and CMN and Corsica Ferries claim that it is precisely for this reason that the French government and the Corsican authority are colluding to ensure that it does not.
In a surprise new move, however, Francis Lemor, chairman of CMN majority shareholder Stef-TFE, invited the Corsican authority to take a stake in CMN alongside his company. Although a court in Paris gave SNCM control of CMN last Tuesday, Mr Lemor is appealing against the decision and argues SNCM will in any case be ordered to give up its stake in CMN by the European Commission.
The Commission is investigating aid granted SNCM by the French government in recent years, including that granted in the course of the sale of a majority of the company's capital to Butler Capital Partners and Veolia Transport.
Mr Lemor believes that the Commission will order SNCM to sell certain assets to compensate for the aid it has received and that SNCM's stake in CMN is likely to be among those assets.
The Corsican transport office is thought to be preparing to award the concession early next month, but Corsica Ferries and CMN are trying to have the award suspended or cancelled, arguing that it is biased in favour of their rival SNCM.
CMN told the court at a hearing on Friday that there was an "obvious understanding" between the French state, the Corsican authority and SNCM's new owners, Butler Capital Partners and Veolia Transport, over the concession.
Butler Capital Partners and Veolia Transport have escape clauses allowing them to withdraw from SNCM's capital if the company fails to obtain the new concession, which is due to come into force on January 1, 2007 and to run until 2012.
If this were to happen, the company would be unlikely to survive and CMN and Corsica Ferries claim that it is precisely for this reason that the French government and the Corsican authority are colluding to ensure that it does not.
In a surprise new move, however, Francis Lemor, chairman of CMN majority shareholder Stef-TFE, invited the Corsican authority to take a stake in CMN alongside his company. Although a court in Paris gave SNCM control of CMN last Tuesday, Mr Lemor is appealing against the decision and argues SNCM will in any case be ordered to give up its stake in CMN by the European Commission.
The Commission is investigating aid granted SNCM by the French government in recent years, including that granted in the course of the sale of a majority of the company's capital to Butler Capital Partners and Veolia Transport.
Mr Lemor believes that the Commission will order SNCM to sell certain assets to compensate for the aid it has received and that SNCM's stake in CMN is likely to be among those assets.
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