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EFTA Surveillance Authority

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Notification of Sale of Rental Apartments- Municipality of Oslo

Reference is made to previous correspondance in the abovementioned case.

The Municipality of Oslo decided in March 2001 to sell a portifolio of 1744 rental appartments before the end of May. The timing of the sale was a result of the introduction of a new legal structure within the hospital sector in Norway, which had as a consequence that the Municipality of Oslo would loose their title to the hospitals and related real estate(Lov om helseforetak of 15 June 2001 section 52 no. 6, in force 1 January 2002).

By letter of 18 May 2001 the EFTA Surveillance Authority requested the Norwegian authorities to submit all relevant information regarding the sale of the rental appartments so that the Authority could asses whether the sale was in accordance with Article 61 of the EEA Agreement.

By letter of 15 June 2001 the Norewegian Ministry of Trade and Industry submitted the documents that we, in agreement with the Municipality of Oslo, regarded as containing the most relevant available information to assess whether the sale was in accordance with the State aid rules of the EEA Agreement.

By letter of 20 Juli 2001 the Authority stated that it had doubts about the compitabillity of the sale of the rental appartments with Article 61 of the EEA Agreement. The Authority invited the Norwegian authorities to comment on this matter, which the Authority would take into consideration before taking a decision on opening a formal investigation procedure (Article 1(2) of Protocol 3 to the Surveillance and Court Agreement).

The Ministry submitted its comments the 27 July 2001 where it stated that it would ensure that Norway's obligations under Article 61 of the EEA Agreement were respected. The County Governor of Oslo and Akershus had 25 July 2001, with suspensive effect decided, that the Municipality of Oslo could not lawfully transfer the right of ownership before the County Governor has made his final decision. A new expert evaluation would also be carried out.

By letter of 31 July 2001, the Authority informed the Norwgian authorities that it had decided not to open a formal investigation procedure. The Authority stated that it was awaiting a formal notification of the sale in accordance with its State aid guidelines.

We hereby notify the Authority of the Municipality of Oslo’s sales agreement on 1744 municipal rental apartments.

The information contained in the attached letter from the Municipality of Oslo, including the annexes, is considered to meet the requirements referred to in Article 1(3) of Protocol 3 to the Surveillance and Court Agreement.

Yours sincerely,

Pål Hellesylt

Deputy Director General

Bjørnar Alterskjær