European Commission yet to approve Bombardier state aid

THE EUROPEAN Commission has yet to approve state aid for Bombardier Aerospace's multi-million investment plan which would see its Belfast factory design and build the wings for a new aircraft

The British government has agreed in principle to provide £52 million (€66 million) of financial support towards the project as part of a wider £155 million investment package in the Canadian corporation.

The support package is subject to strict European Commission rules governing state aid for commercial aerospace companies.

According to the commission, state aid is defined as "an advantage in any form conferred to a certain undertaking by public authorities through State resources which may distort competition and affect trade between member states".

Any potential financial package of support which falls under this category must be "notified to the commission before being put into effect".

Bombardier first announced details of its proposed investment at the Belfast site at the beginning of July when it unveiled plans for its new C Series commercial aircraft.

But the commission has confirmed that two months later it has still not received any notification about the British government's support package for Bombardier.

The British government's department of business enterprise and regulatory reform is responsible for the proposed state-aid package for Bombardier.

A departmental spokesman said: "The offer of launch investment is subject to state aid clearance and we are currently going through this process."

The government's input is a vital component to the project which will sustain and safeguard 800 jobs in Belfast.

It is financially underwriting Bombardier's new C series line of aircraft with the Canadian government, who together with the state authority of Quebec, have pledged loans of Canadian $350 million and $118 million respectively.

Bombardier has accepted the British government's offer of support and is pressing ahead with its plans for the Belfast site, which yesterday hosted a visit by British prime minister Gordon Brown.

During his visit Mr Brown said Bombardier's decision to base production of the C series wing in Belfast was the biggest ever inward investment in Northern Ireland.

He added: "That investment will mean not just more jobs, but more highly skilled jobs. Bombardier's investment is a resounding vote of confidence in Northern Ireland's economy and an example to investors worldwide of the opportunities that exist here."