The latest report of the Office of Competition and Consumer Protection shows that the amount of State aid granted in 2008 was almost PLN 14.4 billion. Its greatest share was given to undertakings as part of horizontal and regional aid

The President of UOKiK is responsible for State aid monitoring and preparing an annual report. According to the latest report, the total value of support granted in 2007 amounted to PLN 14.38 billion – compared to PLN 6.55 billion in 2006. The most common form of aid, just as in 2005-2007, were tax concessions and grants (81.4%).

The first place among the institutions providing aid belonged to the Chief Executive Officer of the Polish Agency for Enterprise Development – in the previous year the Agency provided support which amounted to PLN 2.89 billion. It was followed by the Chairman of Supervisory Board of the State Fund for Rehabilitation of Disabled Persons – PLN 2.5 billion and tax and customs offices – PLN 1.95 billion.

Over PLN 4.92 billion was distributed under horizontal aid – compared to PLN 3.18 billion the previous year. The greatest support was granted to employment (increase from PLN 2.06 billion in 2007 to PLN 2.96 billion in 2008), environmental protection – over a hundredfold increase up to PLN 896.6 million; and development of small and medium-sized enterprises (PLN 460.3 million, a year earlier – PLN 654.8 million).

In the case of sectoral aid, the financial support was PLN 2.52 billion (previous year - PLN 448.5 million). The highest amount, i.e. over PLN 1.75 billion, was allocated to energy companies as compensation for the termination of long-term agreements for sales of power and energy. PLN 588.4 million was granted to coal mining (in 2007 – PLN 399.6 million).

The value of regional aid amounted to PLN 4.04 billion and its high share – over PLN 3.78 billion – was transferred to support new investments. Funds designated for the creation of new jobs ranked second with PLN 245.2 million.

Just as in 2004-2007, PKP Group remains the biggest beneficiary with the amount of PLN 2.18 billion; within the Group the greatest support was given to PKP Przewozy Regionalne – PLN 2.07 billion, followed by: PKN Orlen – PLN 484.5 million, PGE Elektrownia Opole – PLN 411.1 million, PGE Elektrownia Turów – PLN 348.2 million, Grupa Lotos – PLN 245.5 million and Kompania Węglowa – PLN 236.3 million.

In terms of regional diversity, as in 2007, the leading beneficiaries were undertakings conducting business activity in the following voivodeships: Śląskie – PLN 1.84 billion, Mazowieckie – PLN 1.86 billion, Dolnośląskie – PLN 1.04 billion and Wielkopolskie – PLN 926.8 million. However, the highest dynamics of growth compared to 2007 was noted in: Opolskie, Mazowieckie, Małopolskie and Lubelskie.

The value of aid granted to undertakings in 2008 more than doubled compared to 2007, mainly because the aid was not previously applied. First of all, in 2008 the Community resources (PLN 2.66 billion) were for the first time included in the total amount of funds, because under the Financial Perspective 2007-2013 the European Commission requires to ensure compliance of the support granted from the Community resources with the State aid provisions. Secondly, energy producers started to receive aid due to the termination of long-term agreements (PLN 1.75 billion). Thirdly, the support was given to entrepreneurs producing biofuels (PLN 854.7 million).

The high share of financial support granted to big enterprises is still a matter of concern for UOKiK – in 2008 it was 50.9%, compared to 44% in 2007. Supporting entities with a strong market position constitutes a higher risk of distorting competition than in the case of small and medium-sized enterprises. On the other hand, the value of support granted to private undertakings decreased – in 2008 they received 72.8% of the total aid value, while in 2007 it was as much as 87.2%. It is a negative trend, as it is assumed that entities operating under fully free market conditions should ensure better allocation of funds.

Additional information:
Małgorzata Cieloch, Spokesperson for UOKiK
Department of International Relations and Communication
Pl. Powstańców Warszawy 1, 00-950 Warsaw, Poland
Tel. (+48 22) 827 28 92, 55 60 106, 55 60 430
faks (+48 22) 826 11 86
E-mail: [SCODE]bWNpZWxvY2hAdW9raWsuZ292LnBs[ECODE]