EU has stated that it is investigating possible anti-competitive payments to DHL over the building of its new Express distribution hub at Halle in Germany.

DHL received ?70m of subsidy from the Lander government of Saxony-Anhalt, subsidies which were approved by the European Union’s Competition Commissioners. However in a remarkably blunt statement, the European competition Commissioners Office headed by the former Dutch politician Nellie Kroes, commented to the German newspaper Handlesblatt that they “suspected that there were illegal subsidies involved in this investment”.

Jonathan Todd of the Commission later elaborated, suggesting that the new runway which was being built by the government of Saxony, appeared to be for the sole use of DHL. This could be viewed as a ‘market distorting’ subsidy. It is also being suggested that guarantees of compensation to DHL in the event that night-flights from the airport are restricted in the future could also be illegal.

If payments to Leipzig/Halle airport and DHL are deemed illegal both will have to repay the sums, however the Commission admitted that it did not know the amounts involved.

In response to these comments by the Commission, DHL asserted last night that the matter was solely a issue between the Saxon Government and the EU; “The probe initiated today solely concerns issues between the European Commission and the Federal State of Saxony.” DHL added that the issue over night flying had already been resolved as “the Federal Administrative Court of Germany has already ruled that 24-hours operations will be possible for DHL long term.”

The Halle facility is designed to both replace the present Brussels hub operated by DHL and to give DHL the sort of economies of scale possessed by FedEx and UPS in their American operations.

The facility is one of three global hubs for DHL’s Express and Logistics operations, the other two being Wilmington in the US and Hong Kong. The facility will have a major sortation capacity capable of handling 60,000 shipments an hour. It is expected that the DHL facility will create 3,500 jobs in the area. It is scheduled to be opened by 2008.

Source: Transport Intelligence

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