Commission clears Lisbon railway line bid under Foreign Subsidies Regulation, subject to conditions

This article is brought to you in association with the European Commission.

The European Commission has authorised Metropolitano de Lisboa to move forward with awarding the contract for the construction and design of the Lisbon ‘Violet’ metro line, subject to conditions under the Foreign Subsidies Regulation (FSR), following a change by the consortium that avoids any distortion caused by foreign subsidies. Metropolitano de Lisboa, as the contracting entity, can now award the contract to the bidder that submitted the most economically advantageous offer. The list of bidders includes a consortium led by Mota-Engil, provided that all commitments by this consortium outlined in the Commission’s decision are fully adhered to.

The decision follows an FSR investigation into a notification submitted by a consortium led by Mota-Engil, which partnered with subcontractors including Portugal CRRC Tangshan Rolling Stock Unipessoal. This consortium participated in the tender process launched in April 2025 by Metropolitano de Lisboa, the underground railway company of Lisbon, for a contract to design, construct and maintain the new “Violet” Line.

Following a preliminary assessment, the Commission opened an in-depth investigation on 5 November 2025, based on indications that Portugal CRRC Tangshan Rolling Stock Unipessoal may have received foreign subsidies that distorted the procurement procedure, enabling the consortium to submit an unduly advantageous tender. The in-depth investigation confirmed these preliminary findings, revealing that the subsidies in question had indeed given the consortium an unfair competitive edge, to the detriment of other bidders participating in the tender and the integrity of the EU’s internal market.

The Commission has now adopted a decision to accept commitments made by the consortium to replace Portugal CRRC with Pojazdy Szynowe PESA Bydgoszcz Spółka Akcyjna (‘PESA’), a Polish rolling stock manufacturer that has not received distortive foreign subsidies. These commitments remove that distortion of competition in the internal market. As a result, the Commission has given its approval for the consortium’s participation in the tender. However, the ultimate decision to award the contract lies with Metropolitano de Lisboa. It is for Metropolitano de Lisboa to assess whether the bid, which includes the new subcontractor, complies with all technical and quality requirements set out in the tender documents.

The Commission’s involvement will now be focused on monitoring the consortium’s compliance with the commitments it has undertaken, with no further action planned under the FSR unless new issues related to foreign subsidies arise. This is the first time the Commission has adopted a final decision subject to conditions after an in-depth public procurement investigation under the FSR.

A non-confidential version of the decision will be published in the Official Journal of the European Union once any confidentiality issues have been resolved.

Background

The FSR started to apply on 13 July 2023. The Regulation enables the Commission to address distortions caused by foreign subsidies and thereby allows the EU to ensure a level playing field for all companies operating in the internal market while remaining open to trade and investment. According to the FSR, companies are required to notify the Commission when participating in large public tenders in the EU if the estimated contract value is at least €250 million net of VAT, and if participants (including their main subcontractors and suppliers) have received aggregate foreign financial contributions of at least €4 million per third country over the three years prior to the notification. Where the foreign financial contributions remain below €4 million, a declaration is sufficient and required.

The Commission will open an in-depth investigation where, following a preliminary review, it finds sufficient indications that the foreign financial contributions received may constitute a distortive foreign subsidy in the context of the notified concentration or public procurement procedure. At the end of its in-depth investigation the Commission may (i) accept commitments proposed by the company if they fully and effectively remedy the distortion, (ii) prohibit the concentration or – in public procurement – prohibit the award of the contract to the subsidised bidder, or (iii) issue a no-objection decision.

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