SR Technics investment above board, Brussels says

Brussels has again dismissed insinuations by the Irish that Malta used some kind of state aid or EU funds to attract the Gulf-based aircraft maintenance company SR Technics to the island.

Two months ago, the European Commission said it had no information that Malta had used any irregular tactics to lure the multi-million euro investment to the country. However, it had promised to re-examine the issue to ascertain this indeed was the case.

While the Commission's contacts with the Maltese authorities over the issue are ongoing, it yesterday dismissed a new query from another Irish MEP.

Replying to a parliamentary question by Socialist Irish MEP Proinsias De Rossa, who suggested Malta could have used some of its EU funds earmarked for the 2007-2013 budgetary period to attract SR Technics, the Commission said that following its investigations it transpired this was not the case.

The European Commissioner for Regional Policy, Joannes Hahn said the Maltese authorities "confirmed no funds have been granted to SR Technics on the basis of projects under the 2007-2013 Operational Programme".

On the other hand, the Commission confirmed that the Irish had granted more than €120,000 to the company while in Ireland in the past five years, which were used to raise the level of employees' skills.

Brussels said the Irish government had applied for funds under the European Globalisation Fund to mitigate the loss of over 800 jobs shed by the company after its decision to transfer the European base from Dublin to Luqa.

Sources close to the Commisison said yesterday that although its investigation on whether Malta had used any form of state funding were still underway "prima facia it doesn't appear this has been the case".

"Although the Irish are putting a lot of pressure on the Commission to check whether Malta has given some assurances to SR Technics on state aid, so far we do not have any information this has happened," a Com-mission official said.

"We are still in contact with the Maltese authorities on the issue but until now we have not found any wrongdoing. On the contrary, the Maltese authorities are being very cooperative with us and are giving us all the information we are seeking. We should be in a position to clarify and close this issue very soon," the official said.

Last month, then European Transport Commissioner Antonio Tajani sent an official letter to the government seeking clarifications on the deal announced at the end of last year. The letter followed allegations made by the Irish media and some Irish MEPs.

Confirming the request for information from Brussels, a government spokesman denied that any illegal state aid was involved in the deal with SR Technics.

"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," the spokes-man said.

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 an agreement with Malta Enterprise, which will build the necessary hangars and lease them to the company on a 30-year agreement.

In Malta, SR Technics will focus on the maintenance of commercial aircraft and 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 plans to employ 350 people by 2014.