REPORT ON THE SEPARATION BETWEEN THE RAILWAY INFRASTRUCTURE MANAGEMENT COMPANY AND THE TRAIN OPERATORS
PRESS RELEASE
PRESS RELEASE
THE AUTHORITY HAS SUBMITTED A REPORT ON THE NEED FOR A REAL SEPARATION BETWEEN THE RAILWAY INFRASTRUCTURE MANAGEMENT COMPANY AND THE TRAIN OPERATORS
The Competition Authority has submitted a report to the Speakers of the Chamber and the Senate, the Prime Minister, the Minister of Infrastructure and Transport, the Minister of Economy and Finance, and the President of the Lombardy Region with reference to the provisions of Section 20 of Legislative Decree 188 of 8 July 2003, incorporating the three Community Directives of 2001 on the liberalisation of the railway industry, and to the compatibility with Competition law of a contract concluded between Rete Ferroviaria Italiana S.p.A. (RFI) and Trenitalia S.p.A. (Trenitalia), assigning 61 freight terminals located in different Italian regions to Trenitalia. This latter issue had been reported to the Authority by the Lombardy Regional Government.
First of all, the Authority recalled that Community legislation liberalising the rail transport industry is based on the principle that there must be a real separation between railway infrastructure management and train operations. In particular, it requires infrastructure access "to be entrusted to companies or entities which are not themselves train operators", and this must be guaranteed independently of the organisational structures they adopt. Italian legislation incorporating the Community provisions, the latest being Legislative Decree no. 188 of 8 July 2003, requires the railway infrastructure manager to be "autonomous and independent in legal, organisational and decision-making terms from the train operators", and empowered to entrust the management of the railway infrastructure to third parties, with the provision that they are "independent of the train operating companies".
This being so, the Authority has pointed out that despite the consolidation of the principle of separation between railway infrastructure management and train operation, which Decree No. 188 of 8 July 2003 also incorporated into Italian legislation, in view of the organisational structure of the FS Group in reality it continues to be like a single corporation, with the FS Holding Company still able to condition the corporate policies of the companies belonging to the Group because of its controlling powers and economic interests in common with the RFI companies, which are responsible for railway infrastructure management, and Trenitalia.
In addition to this is the fact that Article 20 of the Decree provides that when the railway infrastructure manager, in this case RFI, is not itself able to provide the infrastructure services, the assignment of infrastructure management to independent third parties must be done within one year of the entry into force of the Decree. This means, in essence, that Article 20 permits Trenitalia to continue supplying the services for the activities relating to freight terminals operations for one more year. RFI had already leased the land and the buildings to Trenitalia, under a contract concluded on 27 August 2002, together with all the accessory facilities and plant at 61 freight terminals in different parts of Italy.
In this connection the Authority has pointed out that the assignment to Trenitalia of the management of the freight terminals, forming part of the railway infrastructure of strategic relevance to the provision of rail freight services, and the supply of those services, clashed with the principle of the substantial separation required by law between infrastructure management and train operation. For this arrangement substantially evades the obligation to entrust the provision of certain neutral functions designed to guarantee train operating companies equitable and indiscriminate access to the network and the service facilities to an entity that is independent of the railway companies in legal, organisational and decision-making terms.
In more specifically competitive terms, the Authority has stressed the fact that by assigning these terminals to Trenitalia the latter company had been given a considerable competitive edge, to the detriment of the other operators, present and future. For it would be in a position to condition not only the train operations but also the supply of the accessory services at the terminals (in other words, it could decide what priority to give to the companies using the terminals, the conditions of supply, and for at least some of the services the tariffs charged) whose speed and quality largely determine the organisational efficiency of the traffic. This advantage appears even more significant when one considers that 61 of the largest terminals in the Italian national railway system are managed by the dominant rail and intermodal rail freight operator.
In short, the fact that Trenitalia continues to manage uninterruptedly a substantial part of the existing freight terminal network nationwide, and that this is bound to continue for another year thanks to the provisions of Article 20 of the Decree of 8 July 2003, has two effects: firstly, it gives a competitive advantage to Trenitalia which is in contrast with railway liberalisation legislation and secondly, it reveals the present inadequacy of the formal and substantial separation between RFI and Trenitalia, on the one hand, and between these two companies and the FS Holding Company, on the other.
Rome, 21 August 2003