31.8.1999 Official Journal of the European Communities L 230/9 COMMISSION DECISION of 4 May 1999 on the state aid which Portugal is planning to grant to Companhia de Téxteis Sintéticos, SA (Cotesi) (notified under document number C(1999) 1268) (Only the Portuguese version is authentic) (Text with EEA relevance) (1999/598/EC) THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Community, and in particular the first subparagraph of Article 88(2) thereof, Having regard to the Agreement on the European Economic Area, and in particular Article 62(1)(a) thereof, Having regard to the Code on aid to the synthetic fibres industry (1), Having called on interested parties to submit their comments pursuant to those provisions (?) and having regard to those comments, Whereas: I. PROCEDURE (1) By letter dated 19 March 1998, the Portuguese author- ities notified the Commission of a proposal to grant aid in favour of Companhia de Téxteis Sintéticos, SA (here- inafter ‘Cotesi’), a manufacturer of rope and nets located in Grijé (Carvalhos). The proposed aid falls within the scope of the control measures under the Code on aid to the synthetic fibres industry. (2)  Following a preliminary analysis, the Commission regis- tered the case under number N 196/98 and requested additional information by letters dated 17 April and 1 July 1998. The Portuguese authorities replied to the first letter by letter dated 2 June and to the second by letter dated 12 August 1998. (3) By letter dated 29 October 1998, the Commission informed the Portuguese Government of its decision to initiate the procedure laid down in Article 88(2) of the EC Treaty in respect of the above aid. The Commission decision to initiate the procedure was published in the Official Journal of the European Communities (}). The Commission called on interested parties to submit their comments. () OJ C 94, 30.3.1996, p. 11. () O] C 405, 24.12.1998. () See footnote 2. (4  The Commission received comments from interested parties in December 1998 and January 1999. It forwarded them to the Portuguese authorities, who were given the opportunity to react; their comments were received by letter dated 11 March 1999, registered by DG IV on 15 March. II. THE PROPOSED AID (5)  The eligible costs for the project total EUR 10 006 095 and the proposed financial support amounts to EUR 2 883 864 (including Community co-financing). Of the latter amount, EUR 318 446 is an outright grant while EUR 2 565 418 is in the form of a subsidy repay- able at zero interest over a period of five years, with a grace period of 18 months. The Commission calculates that the total amount of aid (including the grant equival- ent of the repayable subsidy) is some EUR 899 696, with an aid intensity of around 9 % (gross). (6)  The proposed aid will be granted under the specific programme for modernising the Portuguese textile and clothing industry (IMIT), as provided for in Council Regulation (EC) No 852/95 (%), which stipulated that the programme would be jointly financed by the Member State and the Community and executed in conformity with the Structural Funds regulations. 1II. THE PROJECT (7)  The Portuguese authorities stated that the project related to the modernisation of the company's production process, with a view to replacing the tooling, improving the storage areas, altering the layout and strengthening the supply chain. The objective pursued is not to increase the production capacity but rather to achieve higher efficiency and reduce costs. The project would result in the dismantling of a number of extrusion machines and the acquisition of a new extrusion line. (8)  The Portuguese authorities stated that Cotesi employs 1 524 persons, that its turnover in the year preceding the launch of the project was some ECU 46 million and that it had total assets of around ECU 47 million. () O] L 86, 20.4.1995, p. 50.