Ref. Ares(2013)697534 - 15/04/2013
Ref. Ares(2014)69823 - 14/01/2014
Part III.5
SUPPLEMENTARY INFORMATION SHEET
ON REGIONAL AID FOR LARGE INVESTMENT PROJECTS
This supplementary information sheet must be used for the notification of any regional
investment aid exceeding the threshold for individual notification defined in point 64 of the
Guidelines for national regional aid for 2007-2013.
For ad hoc aid (aid granted outside existing schemes) the Member State must also provide the
Supplementary Information Sheet on regional aid (Part III.4). In addition, Member States will
have to demonstrate that the project contributes towards a coherent regional development
strategy and that, having regard to the nature and size of the project, it will not result in
unacceptable distortions of competition. Moreover, Member States will have to demonstrate
that the aid will not be unduly concentrated on a particular sector of activity and that it
creates no adverse sectoral effects.
The Commission reserves the right to ask for further information in order to carry out an in-
depth assessment if the thresholds for such an assessment as defined in point 68 of the
Regional Aid Guidelines are reached.
Additionally to this supplementary information sheet(s) the Member State must provide:
Part I. General Information
Part II. Summary Information for publication in the Official Journal
The Member State must also provide the relevant investment agreement, the (draft) aid
contract and any other relevant document (including, in the case of ad hoc aid, the letter of
intent), in order to confirm that the granting of the aid is in conformity with the general rules
under the Guidelines for national regional aid for 2007-2013 and with any underlying aid
scheme.
If amounts are converted into the euro or other currencies, please provide the implicit
exchange rate assumptions. Please always indicate if the amounts mentioned are in nominal
amounts or discounted.
1. ADDITIONAL INFORMATION ON BENEFICIARIES
1.1. Structure of the company or companies investing in the project
1.1.1. Identity of aid recipient(s):
The aid beneficiaries are a large number of individuals
together with a small number of corporate entities (as set out in appendix 2 attached) sharing
ownership of the hotel and can, therefore, claim the capital allowances provided in respect of
the element of the sale price that can qualify for such allowances. In this case the amount of
qualifying expenditure is €212,360,683
. The various investors who own distinct elements of
the hotel have leased their element of the hotel to the hotel operator (Carrylane Limited who
in turn has entered into a management/operating agreement to manage the hotel with the
Ritz Carlton Hotel Group. See paragraphs 8 to 10 of Appendix 1 for more detailed
information.
……………………………………………………………………………...
1.1.2. If the legal identity of the aid recipient is different from the undertaking(s) that
finance(s) the project or from the actual beneficiary(ies) of the aid, describe also these
differences.
Not applicable.
………………………………………………………………………………...
1.1.3. Please give a clear description of the relation between the beneficiary, the group of
enterprises it belongs to and other associated enterprises, including joint ventures.
See paragraphs 8 to 10 of Appendix 1.
1.2.
For the company or companies investing in the project,
provide the following data for the last three financial years (at group level).
1.2.1. Worldwide turnover, EEA turnover, turnover in the Member State concerned:
Since the beneficiaries are either private individual investors or partnerships or
corporate bodies created or combined for the sole purpose of this investment project
they did not hold any market share before the making of the investment .
………………………………………………………………………………...
1.2.2 Net operating income, return on capital employed and free cash flow:
Since the
beneficiaries are either private individual investors or partnerships or corporate
bodies created or combined for the sole purpose of this investment project they did not
have net operating income, a return on capital employed or free cash flow in the
period concerned before the start of the project.
……………………………………………………………………………...
1.2.3. Employment worldwide, at EEA level and in the Member State concerned:
This information is not available for the reasons outlined at Points 1.2.1 and 1.2.2.
………………………………………………………………………………...
1.2.4. Audited financial statements and annual report(s) for the last three years:
This
information is not available for the reasons outlined at Points 1.2.1 and 1.2.2
………………………………………………………………………………...
1.3.
If the investment takes place in an existing establishment (plant),
provide the following data for the last three financial years of that entity (data for the
existing establishment/plant).
Not applicable.
1.3.1. Worldwide turnover, EEA turnover, turnover in Member State concerned:
Not
applicable………………………………………………………………………………..
.
1.3.2. Net operating income, return on capital employed and free cash flow:
Not applicable.
………………………………………………………………………………...
1.3.3. Employment:
Not applicable.
………………………………………………………………………………...
1.3.4. Aid history - Did the beneficiary receive aid for any other investment in the same
establishment (plant) in the last three years?
Not applicable.
yes
no
If yes, please give more details:
………………………………………………………………………………...
1.4. Firms
in
difficulty
Does the aid benefit a firm in difficulty1 or will it be used for the financial
restructuring of a firm in difficulty?
yes
no
1 As defined in the Community guidelines on state aid for Rescuing and Restructuring firms in difficulty (OJ
C 244, 1.10.2004, p. 2).
If yes, please note that the Community guidelines on State aid for rescuing and
restructuring firms in difficulty are applicable.
2. AID
2.1.
Form of aid
Please give a detailed description of each form of aid:
There is one form of aid being the provision of accelerated industrial buildings capital
allowances on hotels at a rate of 15% for 6 years and 10% in the 7th year. This is
instead of the normal industrial buildings capital allowances of 4% per annum over
25 years. Therefore, it is our understanding that the maximum aid intensity under the
scheme is 12.5%. With regard to this project the aid intensity is 11.37%. Eligible
expenditure under the scheme is confined to costs arising from the construction of the
hotel building. The qualifying construction costs incurred in 2007 and to 31 July 2008
are restricted to 75% and 50% respectively as a result of the previous EU approval to
extend the termination date for pipeline projects to 31 July 2008. The eligible
expenditure does not include costs incurred on land and plant and machinery
acquisition. ………………………………………………………………………………...
2.2.
Amount of aid
For each form of aid, provide the following information:
2.2.1. Amount of support, both in nominal and discounted terms:
See Paragraph 14 of
Appendix 1.
………………………………………………………………………………...
2.2.2. A complete schedule of the payment of the proposed assistance:
It is anticipated that
the beneficiaries of the aid will claim the first years accelerated relief in 2008 or as
soon as Commission approval of the aid is secured for the tax year 2007 and on this
basis relief will be claimed on an annual basis until 2014 for the tax year 2013.
………………………………………………………………………………...
In case of aid awarded in the form of exemptions on future taxes, please indicate how
the discounted aid amount will be capped:
………………………………………………………………………………….
2.2.3. The applicable existing aid scheme(s), including title, state aid number and reference
to Commission approval, submission under interim procedure, or supplementary
information sheet pursuant to an exemption regulation:
Capital Allowances
Depreciation Regime for Hotels N 832/2000. Related Case State Aid No 232/2006
Transitional Extension to Capital Allowances Depreciation Regime for Hotels in
Ireland (ex 832/2000).
………………………………………………………………………………...
2.2.4. The application for aid was submitted before work was started on the project and the
competent authorities have confirmed in writing that, subject to the final outcome of a
detailed verification, the project meets the conditions of eligibility laid down by the
scheme.
yes
no
If no, please explain.
The scheme is an approved tax aid scheme. Aid is granted
automatically if an aid applicant satisfies all the relevant criteria set out in national
tax legislation.
……………………………………………………………………………………...
2.3. Characteristics
2.3.1. Are any of the assistance measures of the overall package not yet defined?
yes
no
If yes, please specify, and explain how the total discounted aid amount will be capped:
………………………………………………………………………………...
2.3.2. Indicate which of the abovementioned measures does not constitute State aid and for
what reason(s):
………………………………………………………………………………...
2.3.3. How is it ensured that the aid is made conditional on the maintenance of the
investment or the jobs created for a minimum period of five years in case of large
companies and three years in case of SMEs?
…………………………………………………………………………………
2.4.
Financing from Community and other sources
2.4.1. Are some of the abovementioned measures to be co-financed by Community funds
(European Investment Bank, European Social Fund, European Regional Development
Fund, other)? Please explain.
The project is not co-financed by any such funds.
………………………………………………………………………………...
2.4.2. Is some additional support for the same project to be requested from any other
European or international financing institutions?
yes
no
If so, for what amounts?
………………………………………………………………………………...
2.5. Reporting
Please confirm that the following documents will be provided to the Commission:
within 2 months of granting the aid, a copy of the aid contract between the
granting authority and the beneficiary;
6 on a five-yearly basis, starting from the approval of the aid by the Commission, an
intermediary report (including information on the aid amounts being paid, on the
execution of the aid contract and on any other investment projects started at the
same establishment/plant);
6 within 6 months after payment of the last tranche of the aid, based on the notified
payment schedule, a detailed final report.
3. ASSISTED PROJECT
3.1. Timeline
Specify the planned start date of the investment, the planned date of completion of the
investment and the planned year by which full production will be reached, if necessary
for each product envisaged by the investment project.
The original planning permission was granted for the development in 1999 and
further revisions were made subsequent to this. Construction work on the project
commenced in January 2005 and concluded in October 2007. The hotel opened for
business in October 2007.
3.2.
Description of the project
3.2.1. Specify the type of the project and whether it is a new establishment; the
extension of an existing establishment; diversification of the output of an
establishment into new, additional products; a fundamental change in the overall
production process of an existing establishment; or the acquisition of capital assets
directly linked to an establishment by an independent investor which has closed or
which would have closed had it not been purchased:
The project is a new
establishment. ………………………………………………………………………………...
3.2.2. Provide a short description of the project:
The project concerned is a hotel, the Ritz
Carlton, located in Powerscourt, County Wicklow which is in the Mid East Sub
Region and the following paragraph is a summary of the project details.
•
The hotel comprises of 200 rooms.
•
The original planning permission was granted for the development in 1999 and
further revisions were made subsequent to this. Construction work on the project
commenced in January 2005 and concluded in October 2007.
•
The hotel opened for business in October 2007.
•
The hotel is a large but compact 7 storey building.
•
It is run by the operating firm Carrylane Limited (which has a management
agreement in place with the Ritz Carlton Hotel Group).
•
The construction was undertaken by a subsidiary, Carrylane Limited, of one property
development company Treasury Holdings.
•
The total sale cost of the hotel is circa €224.4m.
The total amount of eligible expenditure for accelerated hotel capital allowances is
circa €212.4m. ………………………………………………………………………………...
3.3.
Breakdown of the project costs
3.3.1. Specify the total cost of the investment over the lifetime of the project:
€224,408,314.
………………………………………………………………………………...
3.3.2. Provide a detailed breakdown per year and per category (land, buildings,
plant/machinery, or other) of the eligible costs associated with the investment project,
where relevant for each product envisaged by the investment project:
Not applicable
as there is one product/service, the provision of hotel accommodation, provided by
the project.
………………………………………………………………………………...
3.4.
Financing of total project costs
Please provide a complete description of the financing of the project and how it
ensures that at least 25% of the eligible costs are financed in a way which is free of
public support, including de minimis aid.
See Appendix 1. ………………………………………………………………………………...
4. PRODUCT AND MARKET CHARACTERISTICS
In this section, if applicable, please take account of any relevant marketing or similar
arrangements with other companies for the calculation of the capacity and the market
share (e.g. exclusive licenses for sales).
4.1.
Characterisation of product(s) envisaged by the project
4.1.1. Specify all the product(s) that will be produced in the aided facility upon the
completion of the investment and indicate, where appropriate, the Prodcom code or
CPA nomenclature for projects in the service sectors.
The project sole output is a
service activity, the provision of hotel accommodation which falls under the CPA
Nomenclature of Hotels NACE Code H.55.10.
………………………………………………………………………………...
4.1.2. Will the products envisaged by the project replace any other products produced by the
beneficiary (at group level)? What product(s) will it replace? If these replaced
products are not produced at the location of the project, indicate where they are
currently produced. Please provide a description of the link between the replaced
production and the current investment and give a time schedule for the replacement.
…
No……………………………………………………………………………...
4.1.3. What other product(s) can be produced with the same new facilities (through
flexibility of the production installations of the beneficiary) at little or no additional
cost?
……
None…………………………………………………………………………...
4.2.
Product concerned and relevant product market
4.2.1. Explain if the project concerns an intermediate product and if a significant part of the
output is not sold on the market (under market conditions). Based on the above
explanation, for the purpose of calculating the market share and capacity increase in
the remainder of this section, please indicate if the product concerned is the product
envisaged by the project or if it is the downstream product.
The project does not produce an intermediate product. …………………………………………………………………...
4.2.2. Please indicate the demand side substitutes and the supply side substitutes of the
product concerned. The relevant product market includes the product concerned and
its substitutes considered to be such either by the consumer (by reason of the product's
characteristics, prices and intended use) or by the producer (through flexibility of the
production installations of the beneficiary and its competitors).
It is our understanding
that there are no identifiable demand side or supply side substitutes in this instance.
………………………………………………………………………………...
4.3.
Market share data
Please answer the following questions for all products concerned.
4.3.1. For the purpose of applying point 68(a) of the RAG, the Commission will normally
assume that the relevant geographic market is the European Economic Area (EEA).
Please provide arguments if another geographic market for the product(s) is
considered relevant.
It is our view that the EEA is the relevant geographic market
although it should be noted that guests will come from all around the world. .
………………………………………………………………………………...
4.3.2. Please provide an estimate of all sales of the aid recipient on the relevant
market (at group level, in value and volume terms), from the year preceding the start
year of the investment to the year following full production of the product envisaged
by the project. If applicable, provide a breakdown of these sales into product
concerned and other categories of products sold by the aid beneficiary on the relevant
market.
Since the beneficiaries are either private individual investors or created or
combined for the sole purpose of this investment project there is no relevant data for
the year of investment or the preceding year.
………………………………………………………………………………...
4.3.3. Please provide an estimate of the overall sales of all producers on the relevant market
(in value and volume terms), from the year preceding the start year of the investment
to the year following full production of the product envisaged by the project. If
available, include statistics prepared by public and/or independent sources.
It is our understanding that this information is not included in statistics provided by
public or independent sources. It is also our understanding, that due to the relatively
insignificant amount of additional capacity in terms of additional bed places provided
by the project i.e. 800, in comparison with the total number of bed places in hotels
and similar establishments in the EEA 11,537,218 (source Eurostat Pocketbook
Tourism Statistics 2008) that the possibility of the project exceeding 25% of market
share in the EEA cannot arise. ………………………………………………………………………………...
4.3.4. Please explain the methodology underlying the estimates and the implicit price
assumptions.
See 4.3.3.
………………………………………………………………………………...
4.4. Market
evolution
Please answer the following questions for all products concerned.
4.4.1. Provide for each of the last six years data on apparent consumption2 (in value and
volume terms) in the relevant product market in the EEA. Please also provide implicit
price assumptions. If available, include statistics prepared by public and/or
independent sources.
This information is not available at NACE Level H.55.10
………………………………………………………………………………...
4.4.2. Please calculate from the above figures the Compound Annual Growth Rate (CAGR) 3
of apparent consumption in the relevant product market in the EEA.
See response to
4.4.1.
………………………………………………………………………………...
2 Apparent consumption is production plus imports minus exports. If no apparent consumption data are
readily available, other relevant data can be used.
3 The CAGR is calculated as [y(t) / y(t – 5)]1/5 – 1.
4.4.3. Please calculate the average annual growth rate of the EEA’s GDP over the last five
years as a Compound Annual Growth Rate (CAGR) using Eurostat figures4
(www.eu.int/comm/eurostat/ – currently the figures can be found under
“Themes/Economy and finance/National accounts/Annual national accounts/GDP and
main aggregates”).
Not applicable, see response to 4.4.1. Although it should be noted
that according to Page 21 Table 3.1.2. of Eurostat Pocketbook Tourism Statistics
2008 the growth of Tourism receipts has exceed GDP growth for each of the years
1995 to 2006. On this basis it is felt that it is appropriate to indicate no to the
question at point 4.4.4.
………………………………………………………………………………...
4.4.4. Is the average annual growth rate of the apparent consumption on the relevant product
market in the EEA over the last five years below the average annual growth rate of the
EEA GDP over the last five years?
yes
no
4.5. Capacity
considerations
Please answer the following questions for all products concerned.
If from point 4.4 on market evolution follows that the average annual growth rate of
the apparent consumption on the relevant market is below the average annual growth
rate of the EEA GDP, provide the following information:
4.5.1. Provide an estimate of the production capacity created by the investment (in volume
and value terms).
Not applicable see point 4.4.3 and 4.4.4. ………………………………………………………………………………...
4.5.2. Provide an estimate of any changes in the total capacity of the beneficiary (at group
level) in the EEA between the year preceding the start year of the project and the year
following completion of the project (in volume and in value terms). Please also
provide implicit price assumptions. If available, include statistics prepared by public
and/or independent sources.
Not applicable see point 4.4.3 and
4.4.4..………………………………………………………………………………...
4.5.3. Provide an estimate of the total apparent consumption on the relevant product
market(s) in the EEA for the year preceding the start year and for the year following
the completion of the project (in volume and in value terms). Please also provide
implicit price assumptions. If available, include statistics prepared by public and/or
independent sources.
Not applicable see point 4.4.3 and 4.4.4. .……………………………………………………………………………
5. OTHER INFORMATION
Please indicate here any other information (e.g. environmental impacts or benefits)
you consider relevant to the assessment of the measure(s) concerned.
See Appendix 1
attached.
………………………………………………………………………………...
4 EU25 can be used as a proxy for the EEA in this context.
Document Outline