AGCM

The Italian Competition Authority (“ICA”), in an Opinion approved on 31 October 2017, invited the Municipality of Rome Capital City to assess very carefully the existence of the formal and substantial prerequisites for a new in-house award of the local public transport service contract to ATAC (or for an extension of the current contract).
The motivation for this intervention comes from clues that revealed how the assessment of the proposed agreement with creditors in business continuity for ATAC will necessarily be based on the possibility that the company owned by the Municipality of Rome Capital will continue to provide the local public transport service beyond the current deadline of 3 December 2019.
This could happen thanks to an extension of the current contract or by means of a new in-house contract award.
As for the extension, the ICA believes that, at the moment, and despite ATAC’s serious economic and financial crisis, there are no conditions of emergency or imminent danger of service interruption that may justify this type of intervention. The long period that still separates us from the expiry of the current contract (equal to two years) is a sufficient time frame for the Municipality of Rome Capital to organise the service without resorting to urgent measures.
As for the possibility of awarding the contract in-house to ATAC again at the end of the current service contract, the ICA reminded the Municipality of Rome Capital that being true to formal EU criteria and the motivational obligations set forth by both the sectoral regulation on local public transport and the general rules on local public services is an unavoidable prerequisite, also in the context of an agreement with creditors in business continuity.
Consequently, if the Municipality of Roma Capital intends to re-award the local public transport service contract to ATAC, it should not only carry out a rigorous assessment of the preferability of this choice over resorting to the market through a call for tender, but also an effective comparison between the in-house contract award scenario and a series of appropriate market benchmarks aimed at assessing the correctness of the choice from the point of view of efficiency, cost-effectiveness and quality of service provided to citizens.
In addition, precisely in view of ATAC’s situation of financial distress, special caution should be used in measuring the value of the compensations to be paid to the contractor. These contributions should be calculated on the basis of the costs of an efficiently managed average company, to avoid over-compensation for public service fees in violation of state aid legislation.

Rome, 9 November 2017