After an in-depth 10-month investigation the European Commission has approved regional investment aid of EUR4.2 million (US$5.5 million) to German shipyard Volkswerft Stralsund, which belongs to AP Moller-Maersk and is a unit of its Odense Steel Shipyard Group, according to a report in the Virginia-based Marine Log Magazine.The article said that the Commission had concluded that the investment was limited to a modernisation of the yard that will improve its productivity and will not result in a disproportionate capacity increase. Competition Commissioner Neelie Kroes said: "The aid encourages greater efficiency and competitiveness of an EU yard. This is in line with the objective of the State Aid Action Plan of less, but better-targeted state aid. I am satisfied that the aid is only used to modernize the yard and not to create additional capacity."
In August 2005 Germany notified the commission of its intention to grant regional investment aid to the yard, which is located in Stralsund, Mecklenburg-Vorpommern, a region where the standard of living is below the EU average and where there is high unemployment. The proposed investment aid would enable the yard to build larger, Panamax-sized vessels at competitive costs, thereby increasing the productivity of the yard, the magazine said. Total modernisation costs amount to EUR18.7 million, and Germany intends to provide EUR4.2 million, which corresponds to an aid percentage of 22.5 per cent, the maximum allowed under European Commission rules on state aid to shipbuilding.