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Concessions: The Italian Competition Authority calls for more public tenders as a means to boosting economic growth, as opposed to extensions of existing contracts


PRESS RELEASE


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The Italian Competition Authority, in its meeting of 12 December 2018, resolved to send a report to the Government and the Parliament on the current status of the administrative concessions in Italy, underlining the main critical competition issues encountered in certain markets as a result of the misuse of the concession instrument.  

The Authority reiterates the fact that tenders must be the rule in the granting of concessions; their amplitude and duration must be limited and justified by the technical and economic requirements and by the characteristics of the investments; cases of preference for outgoing operators or seniority acquired should be eliminated and automatic renewals and extensions should be avoided.

Therefore, the report includes proposals for amending existing legislation or recommendations to contracting administrative authorities, intended to ensure greater competitive comparison between market operators and to improve the quality, including in terms of safety, of the service rendered to the local community.

 These are the sectors analysed and the measures proposed by the Authority:

Motorways: for concessions in expiry, the rapid execution of tendering procedures, to ensure optimum and prompt selection of operators in terms of quality and safety of services, the propensity to invest and lower costs of operation; for the remaining concessions, the assessment of the appropriateness of the duration with respect to the value of the concession, the organizational complexity of the subject of the concession and the investments made, also for the purposes of the possible redefinition of the same concession, if exceeding the period of time reasonably necessary to recover the investments made and make a return on the capital invested; finally, an increase to eighty percent of contracts for motorway concessions entrusted without tender to be outsourced pursuant to art. 177 of Leg. Decree no. 50/16.

Airports: similar to the motorway sector, the performance of tender procedures for concessions not yet entrusted by ministerial decree; for the remaining concessions, a careful review of the congruence between the investment programme and the duration of the concession, including for the purposes of the possible redefinition of the concession, if not consistent with the multi-year development plan, the time frame of investments and the penalty system.

Gas distribution: the identification of the contracting bodies for local authorities that still have not done so; the rapid recourse to tendering procedures for the contracting bodies; for the control bodies, the verification of compliance with the deadlines set by the legislation and the prompt exercise of  their powers of replacement in the event of unjustified delay in concluding the tenders.

Large water derivations for hydroelectric use: the completion of the tender procedures in as short a time as possible; the amendment of art. 12 of Leg. Decree no. 79/99, in order to organise the transfer for consideration of the dry works only and the simultaneous free devolution of wet works to the property of the state.

Port and maritime concessions: a clarification of the roles and responsibilities of the various actors of the sector; the transposition by the AdSP (Sea Port Authority) of the indications provided by the regulators, defining clearly ex ante fair and non-discriminatory criteria of access to and use of infrastructures and arranging procedures to award public services, independent of the requests of stakeholders.

State-owned maritime concessions for tourist and recreational purposes: the rapid adoption of a new law that requires the immediate selection of agents on the basis of principles of competition, impartiality, transparency and publicity and that guarantees for the competent administrative authority the efficient use of state-owned resources and an adequate remuneration of the asset, such as to allow the transfer of a larger share of the return to the local community. 

Parking facilities for trade in public areas: verification of the adequacy and effective proportionality of concessions with respect to the investments made and to the nature of the parking facilities concerned; the elimination of the criteria of seniority such as to give outgoing operators a competitive advantage that competitors are unable to replicate.

Post Offices - Universal Postal Service: the use of public tender procedures to award the services, duly taking into account, in the definition of the limitations for granting the concession, the specific characteristics of market supply and demand.

Radio and television: the precise definition of public service obligations in order to ensure the improved sizing of the resources devoted to their financing, facilitating the offering of public service broadcasting through a dedicated network financed exclusively by licence fees.

Frequencies of the 700 MHz bandwidth for the (5G) mobile telecommunications services and renewal of rights of use: the rapid release of the frequencies in the 700MHz bandwidth following the tendering procedures experiment, without recourse to unjustified extensions in the renewal of rights of use and preventing the request for compensation to the successor agent from impeding access to the market.

 Rome, 20 December 2018