EU Commission to probe deal with SR Technics

The European Commission is seeking clarifications from the Maltese authorities to ascertain that no illegal State aid was granted to attract the aircraft-maintenance company SR Technics to Malta.

Sources close to the Commission yesterday told The Times that Italian Transport Commissioner Antonio Tajani had sent an official letter to the government seeking clarifications on the multimillion euro deal announced last year.

It follows allegations made by the Irish media and some Irish MEPs that Malta used public funds to attract the Gulf-based company.

"The Irish are very unhappy SR Technics left their country to open shop in Malta and are putting a lot of pressure on the Commission to see whether Malta gave any illegal aid to SR Technics to secure this deal," a Commission official said.

"Brussels does not have any information that Malta has done anything illegal but we are just trying to establish the facts to the satisfaction of all those involved."

Confirming that a request for information had been received from Brussels, a government spokesman yesterday said no illegal State aid was involved in the deal.

A reply to this end would soon be sent to the Commission, he added.

"We categorically deny any EU state aid rules were broken. The deal was completely above board and SR Technics decided to come to Malta following tough negotiations between the company and Malta Enterprise... It was deemed by foreign investors as the most suitable location for their investment and this without any subsidies from our part," the spokesman said.

"The government will give all the necessary assurances to the Commission that no EU rules have been broken and all competition rules were fully respected."

Allegations about Malta were recently raised at the European Parliament by Irish MEPs.

Gay Mitchell, from the European People's Party, said several concerns had been raised in Ireland about the way in which the SR Technics facility at Dublin airport was wound up. He asked whether the Commission was aware that funding had been granted by Malta so that SR Technics would build a new maintenance facility on the island. Replying to these allegations, Mr Tajani said the EU executive was not aware of any funding that went against EU rules, however he promised that Brussels would investigate. Last year, Gulf-owned SR Technics announced it would relocate its aircraft maintenance operations to Malta by the second half of this year after winding up its Irish base.

The deal was sealed following agreement with Malta Enterprise which will build the necessary hangers and lease them to the company under a 30-year agreement.

In Malta, SR Technics will focus on the maintenance of commercial aircraft and will initially use an existing hangar at Luqa airport before leasing its own facilities. Major low-cost airline EasyJet will be the company's biggest client, with its 157 aircraft being serviced in Malta.

The company is projected to employ 350 people by 2014.