LOCAL PUBLIC TRANSPORT (Advisory opinion)
PRESS RELEASE
The Italian Competition Authority submitted an advisory opinion to the Prime Minister, the Ministers of Transport and the Department for the Public Function, the President of the Two-Chamber Commission, to urge the adoption of provisions amending and integrating legislative decree no. 422/97 conferring competence and duties on the Regional administrations and local authorities in relation to the management of local public transport.
The Authority felt that the high amount of public resources spent in subsidies for local public transport development originated from a number of reasons: a tariff-setting system based on the costs of a public service whose boundaries are not always clear-cut; insufficient efficiency controls; monopolistic market structures.
The recovery of local public transport requires the adoption of many actions as, inter alia, the introduction of competitive mechanisms to attain efficiency.
However, a market-based approach is often affected by the imposition of obligations of public service independently of real necessity and cost-effective management of the service. Such obligations should be imposed only as it is strictly necessary.
The sector restructuring should be aimed at maximizing competition and minimizing subsidies. Pursuing such objectives would require changes in service offer, even if it is facilitated by the provisions of the legislative decree in question, which should confer responsibilities on local authorities to define demand of local public transport services.
In particular, the Authority advocated that
a) the provisions of the above legislative decree would be amended to clearly prescribe the use of public tender as a mechanism for awarding contracts;
b) the contracts would be awarded, when possible, by switching from a concessionary scheme to an authorization regulatory scheme;
c) incentives based on the periodical comparison of the single operator’s performance with those of the operators working in other territorial areas would be adopted;
d) the transitory period during which the contracts will be awarded without the use of competitive bidding would be reduced;
e) the regional decentralization would be accomplished in such a way as to make possible comparative competition and to ensure the complete separation between regulators and service suppliers;
f) the reform of local public transport and, in particular, the integration of different transport means, would not hamper the separation between the management of the network and the supply of railroad transport service, as provided for by EEC Directive no. 91/440.