French ferry company SNCM, already stricken with labour problems, has suffered a fresh blow. After European competition authorities ordered it to resubmit a bid for a lucrative route as the process was "anticompetitive".
, its smaller rival, said yesterday that Monday's decision by the Competition Council made it more likely that it would win a public tender for the lucrative Marseilles-Bastia route, to be awarded next week.
Corsican authorities had said that they would favour any bidder that could cover all the routes to the island.
said it was too small to bid for more than a few and the council agreed with its view.
However, SNCM said it had expected the decision and remained confident of victory.
It had been working on a series of smaller bids since a November 29 competition hearing that would be presented to Corsica's transport authority today.
SNCM's part-privatisation depends on it winning.
Veolia, the transport group that bought 25 per cent of SNCM, can withdraw if it loses the guaranteed revenues of the public contract.
The move to divest state control - Paris retains 38 per cent and the workforce 9 per cent - sparked a strike. This summer, police stormed one of its ships by helicopter in mid-ocean to free passengers from protesting sailors.
"These public service routes make up 60 per cent of revenues," Veolia said yesterday. "If SNCM loses them, the future of the company is in doubt. You cannot have a company without any business."
The competition council rejected charges that Corsican authorities had been biased or given undue subsidies to SNCM.
Pierre Mattei, chief executive of Corsica Ferries
, welcomed the decision. "We couldn't make a global bid because we don't have enough boats. I could not buy 10 more boats at EUR 100m each in case we won."
He maintained in an interview that matters were still stacked in SNCM's favour.
The winner was to have been announced in August but the date was put back to December 22 for a route that begins on January 1. "That favours the incumbent as you have very little time to get ready," said Mr Mattei.