AMENDMENTS PROPOSED TO THE LOCAL PUBLIC SERVICES BILL (Advisory opinion)
PRESS RELEASE
PRESS RELEASE
The Competition Authority has submitted a series of amendments to the Local Public Services Bill
The Competition Authority has submitted a report to Parliament and the Government regarding the government Bill before the Senate, amending law 142 of 1990 to reorganize local public services. The Authority appreciates the competition element introduced by the Bill into the provision of local public services, but at the same time considers it necessary to correct several other provisions that are inconsistent with the liberalization thinking underlying the reform.
In particular the Authority considers that:
1. Since the system of ‘awarding’ services of industrial relevance by tender usually restricts the number of companies eligible to be entrusted with them, it should not be used for awarding activities that are already unregulated or are to be deregulated as a result of the application of Community principles. Consequently, the procedure should not apply at least to the following activities: a) the sale of natural gas; b) the collection and disposal of solid municipal waste and its equivalent; c) local rail, shipping and air transport routes, except for the management and development of the railway network. In these cases, the most appropriate instrument could be to operate under license.
2. It should be made quite clear that local services or segments of services that are not included among those subject to the tender and award system must at all events be deregulated and be operated in competition. The Government regulation should identify which activities performed competitively require an administrative license, and lay down rules and criteria that limit the possibility of shielding certain activities and services of a non-industrial nature from competition.
3. The corporate objects of semi-public companies awarded these services should not be defined in such a way that the companies are prevented from providing, on behalf of the awarding local authority, services falling outside the main core of the public service in the absence of competitive tenders guaranteeing adequate competition.
4. The transitional measures that might cause discrimination to the detriment of companies operating abroad must be removed. Companies which manage public services in Italy or abroad under direct commissioning cannot take part in public tenders, but this ban does not apply to companies operating in Italy throughout the whole of the transitional phase.
5. The total extension period granted to the present service-providers under the transitional provisions must be kept to the minimum. The very long overall extension period given to companies directly ‘warded’ the services and current franchises is seriously holding up the process of introducing competition into the provision of services of relevance to industry, and allowing existing service providers this opportunity to entrench their present position raises market barriers against new entrants, which contrasts with the objectives of liberalization.
Rome, 28 October 1999