Press release regarding judgment A-4488/2021

Lucerne transport company must repay subsidies

Lucerne transport company VBL must reimburse a total of CHF 211,054 from the federal subsidies it received since 2012. This is the decision reached by the Federal Administrative Court.


The Lucerne transport company VBL has received excessive federal subsidies. (Picture: Keystone)
The Lucerne transport company VBL has received excessive federal subsidies. (Picture: Keystone)

From 2010 onwards, the transport company verkehrsbetriebe luzern AG (vbl) entered into annual service level agreements for its regional passenger transport services with purchasers Verkehrsverbund Luzern (VVL; Lucerne transport association) and the Federal Office of Transport (FOT). It did so in its capacity as a subsidiary of the holding company Verkehrsbetriebe Luzern AG (VBL).

In the controlling-report for the 2017 season, vbl disclosed that it had paid VBL an imputed interest rate of around 3% for the use of its vehicles. In 2021, the FOT claimed that these imputed interest rates led to the transport company receiving excessive subsidies between 2010 and 2017. Accordingly, the FOT ordered the repayment of CHF 242,737. VBL lodged an appeal against this decision with the Federal Administrative Court (FAC).

The FOT took the view that the imputed interest rates were not absolutely necessary and were therefore unfounded and inadmissible. Only interest actually accrued and return on equity approved by the purchasers could be taken into account. It was deemed that the imputed interest rates charged within the group had led to a breach of the rules on the appropriation of profits. VBL, on the other hand, did not see this as an illegal action and considered the interest payments as a contribution to the entrepreneurial risk of the City of Lucerne (as owner).

The FAC determines that the return on equity was not approved either for vbl or VBL. Thus, the interest charged to vbl was unlawful insofar as it exceeded the interest actually accrued by VBL. The corresponding costs charged by the parent company of the subsidiary are not absolutely necessary expenses under the Subsidies Act (art. 14 para. 1 SubA). The FOT was justified in demanding the return of the excessive subsidies received as a result.

However, the appeal is allowed for the years 2010 (statute of limitations) and 2011 (legitimate expectation). In all other respects, the FAC dismisses the appeal and orders the VBL to repay a total of CHF 211,054 for federal subsidies unjustifiably received between 2012 and 2017.

This judgment may be appealed to the Federal Supreme Court.


Rocco Maglio
Rocco Maglio

Press secretary / Head of communication a.i.