AGCM

PRESS RELEASE

HEARING OF PRESIDENT PITRUZZELLA IN THE
ENVIRONMENT COMMISSION OF THE SENATE.
"MORE COMPETITION IN THE MANAGEMENT OF MUNICIPAL WASTE"

To promote greater competition in the municipal waste management sector, from the collection to the recycling phase, to obtain benefits not only of an environmental type but also economic ones in favour of the citizens.  Pending the results of the inquiry ordered by the Antitrust Authority, this was the proposal indicated to Parliament by the President of the Authority, Giovanni Pitruzzella, in the hearing that was held today in the Environment Commission of the Senate. “Besides producing positive effects in terms of lower costs for the community – stressed Pitruzzella – a restructuring of the system can favour the creation of new companies and jobs”.

The sector of municipal solid waste (MSW), as explained by the President of the Antitrust, “represents one of the main sectors of public service with economic importance in Italy”. In our country, we produce around 170 million tons of waste per year, with an average of three tons per capita of which 19% is made up of municipal waste, amounting to 30 million tons. Although collection has increased over time, the levels remain low: in 2012 they amounted to 12 million tons of MSW (around 40% of the total).  With regards to the final destination of the waste, until some years ago the use of landfills remained prevalent (42.1% in 2011), whilst the recycling and the energy recovery amounted to slightly lower values, respectively at 23% and 20%.

In the upstream phase of waste collection there are three critical issues that the Antitrust feels penalise competition. The first relates to models of custody of the collection service, carried out in a legal monopoly on concession of the responsible local authority. According to the Authority, “the award of a public service by tender is to be preferred to other methods, because it allows the proper functioning of the market”. The most recent data provided by the Regions, although still incomplete, indicates a “significant use” of the direct order even in the absence of some requirements (46.8% of the sample) and a longer period than that considered necessary to recover the investments (43.5% of cases after five years).

Another critical point reported by the Antitrust concerns “the risks of the extension of the legal monopoly from the upstream phase of collection to the downstream phase of recovery and disposal”.  The fact that the current legislation is favourable to the integrated management of municipal solid waste is a “matter of concern” for the Authority led by Professor Pitruzzella, in the past required to intervene in similar cases in the Lazio and Emilia Romagna regions. In his opinion, “management not (necessarily) integrated of the different phases of the environmental supply chain would consent to the improvement of the industrial characteristics of each”, favouring a reduction in the cost of the service monopoly.

The third critical point, in terms of competition, is identified by the ICA in the definition of “horizontal” in the scope of collection, and in particular in the “assembly” of special waste (coming from private surfaces) to urban waste. The Authority does not agree that municipalities make an “excessive use” of this practice, in order to determine “significant competitive imbalances” with an “unjustified extension of the exclusive rights granted to the subjects that foster local public services.”

As to the relative phase of the organisation and the financing of the recycling of the differentiated fraction of the MSW, based on today’s system of consortia required by law, the Antitrust recognises “the utility that the consortia had in their initial phase of construction of a modern system of waste management”. But it is considered advisable to review this sector – and especially the monopoly of recycling of packaging waste – to facilitate the organisation of “pluralistic structures”, even in consideration of the differences which exist between the various sectors. “The times – concluded President Pitruzzella in his hearing in the Environment Commission of the Senate – would seem ripe for the configuration of a system where the consortia operate in a subsidiary manner, when starting a recovery of those materials with the lowest rate of recyclability”.

Rome, 6 November 2014