COMPLAINT: PUBLIC SERVICE OBLIGATIONS AND COMPETITION IN THE GULF OF NAPLES AND GULF OF SALERNO
PRESS RELEASE
PRESS RELEASE
SHIPPING: ANTITRUST AUTHORITY TELLS REGIONE CAMPANIA TO REVIEW REGULATION OF PASSENGER FERRY SERVICES IN THE GULF OF NAPLES AND GULF OF SALERNO
The present rules risk distorting competition and need to be changed with a view to the planned privatisation of the Tirrenia group and its regional subsidiaries which is to take place through a bidding procedure.
Regulation of passenger transport in the Gulf of Naples and the Gulf of Salerno unjustifiably reduces room for competition. So writes the Italian Competition Authority in a report sent to Regione Campania, the Government and Parliament. In the view of the Antitrust Authority, a profound review of regulation is needed in order to find the best balance between the obligation to provide a public service and the need for competition.
In the Authority's view, it is first of all necessary to define clearly and transparently the obligations to provide public services, beginning with the requirement for territorial continuity which today is met by both private (unsubsidised) operators and Caremar (subsidised at a national level). Regulatory intervention, in particular as regards prices, should be limited to the unprofitable parts of the service. In order to minimize the extent of public financing and at the same time to maximise the room for competition, the proper approach is to use open bidding. The service should be awarded to the operator/s whose prices are lowest and the difference between such prices and those set by the regulatory authority to guarantee the right to transport could be covered by directly financing the beneficiaries (commuters and residents) by use of vouchersor tax breaks. In this way, prices would reflect the companies' costs, allowing them to compete on all types of customers, including residents and commuters. This would also obviate the risk that subsidies be used to finance other transport services provided in a competitive environment or, vice versa, that the users of market services be made to pay more than is necessary in order to finance the unprofitable part of the universal service.
During the course of the process of privatisation of the Tirrenia group it would in any case be necessary to ensure that the lump-sum compensation for public service provision paid to Caremar, a company that operates routes in the two Gulfs, is grounded in objective pre-established parameters designed to reflect true costs. A general overhaul of the regulatory setup for ferry services in the two Gulfs in Campania, with a view to eliminating the distortions resulting from overlap between the national regulation of the public group and the regional regulation of the private operators, is all the more necessary in the Antitrust Authority's view in the context of the forthcoming privatisation of Tirrenia and its regional subsidiaries. For that divestment, the sale of the entire share capital to one or more private operators chosen by way of an open public procedure would seem to be the approach that is most compatible with the principles of competition.
Rome, 13 July 2009