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Public Funding of Infrastructure

An Analysis of Principles, Ambiguities, and Pricing Options

Phedon Nicolaides

The new State aid rules for 2014-2020 explicitly allow the granting of State aid for several types of infrastructure (research, energy, local, etc). The aid must be for the benefit of owners or operators of infrastructure. Users must be charged a market price or a price that covers either full or incremental costs. This paper examines how Member States can prevent the leakage of aid to the benefit of users. The paper, however, also criticises current rules for not being clear as to how to define market prices and the costs that should be charged to users.

Professor at the College of Europe and at the University of Maastricht. I am grateful to Alexander Rose for comments on an earlier draft and to Olga Simeon for discussions on the funding and use of infrastructure. I would also like to acknowledge comments by participants at the session on infrastructure of the 13th EStALI conference on 11 June 2015 in Brussels.


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