Call for action over German coal contracts

Date: 13/07/2000

By Peter Chapman

A US MINING equipment company is calling on the European Commission to act over allegations of favouritism in public tenders and abuse of state aid in the German coal market.

The UK unit of the US firm Joy Mining Machinery claims that Essen-based coal mining company RAG, owner of Germany's heavily subsidised coal fields, has breached EU public procurement rules by siphoning off aid to the sector for contracts worth tens of millions of euro to its own mining equipment subsidiary DBT.

Joy claims the German mines are still investing huge sums in new mining equipment, even though the pits are propped up by government handouts designed to offset the high production costs which make German coal the most expensive in the world.

The US company says it has never clinched a German deal for the 'long-wall' equipment such as roof supports, hydraulic jacks, conveyors and sheering machines which it sells successfully elsewhere in the world. Despite tabling what it believes to be competitive bids, Joy says all available contracts have gone to DBT, which also makes the equipment.

"We have been trying very hard to get into Germany but we have not had any success," said Joy's UK managing director David Johnson. "We are trying to sell to an end user who owns our competitor. It makes things difficult."

He added that his company had lodged a complaint with the Commission's internal market department more than a year a go, but was still awaiting confirmation from officials that they intended to take action.

But Commission sources insist the institution is taking the complaint seriously. They add that officials could follow up this investigation with a specific state aid probe into allegations that RAG is cross-subsidising its equipment unit with the coal production aid.