Italy to revoke Autostrade’s Morandi bridge concession but ‘unbalanced’ deals set to remain

Prime Minister Giuseppe Conte softens threat to nationalise all concessions but warns of ‘a clear signal of change’ to how they are operated.

The Italian government has rowed back on its promise to revoke all of Autostrade per l’Italia’s 3,000 kilometres of motorway concessions after encountering legal obstacles to its response to the collapse of the Morandi Bridge in Genoa last week, which killed 43 people.

The government has begun proceedings to cancel the concession held by Autostrade for the A10 Genoa-Savona motorway containing Morandi Bridge, requiring the Atlantia subsidiary to demonstrate within 15 days what actions it took to protect the bridge.

However, despite deputy prime minister Luigi di Maio’s demand last week that all of Autostrade’s concessions be withdrawn, a policy echoed by others in the government, Prime Minister Giuseppe Conte expressed his disappointment that this move is now unlikely after warnings the undertaking would cost about €20 billion in compensation.

Conte, whose administration assumed office in June, referred to previous governments, stating that “the process of privatisation [of] our infrastructure started many years ago”, favouring financial rather than strategic investors. “Now we find ourselves with existing concession agreements and service contracts, some of which expire in the near future and which contain very unbalanced conditions and clauses in favour of [operators].

“This government will do everything to completely revise the system of concessions and as they expire, it will take advantage to set these operations on the basis of new principles and more satisfactory legal-economic balances.”

Conte added that “all the infrastructure concessionaires” will be gathered by the government next month and will be forced to outline what maintenance and safety arrangements they have on their projects, warning of a new era for the operators. According to the prime minister, private operators will be required to reinvest most of their profits in maintaining and upgrading infrastructure.

“More generally, they must understand that infrastructure is not a financial income, but a public good that the country and, therefore, the citizens are willing to entrust to their care, only as long as the profit that is derived is largely offset by the guarantees of ‘absolute protection and safety’ of users’ lives and of a ‘truly efficient management’ of the service,” Conte said.

Political warfare

Autostrade chief executive Giovanni Castellucci said at a press conference on Saturday the company is willing to rebuild the bridge within eight months, at a cost of about €500 million. He has resisted calls from the government to resign.

The company, which sold a 6.94 percent stake to a consortium comprising Allianz Capital Partners, EDF Invest and DIF last year, has also made the remainder of its Genoese road network toll free.

Meanwhile, a war of words continues between former prime minister Matteo Renzi and the governing Five Star Movement, with Renzi calling di Maio “a liar” for suggesting the Benetton family, owner of Atlantia, paid for his electoral campaigns. Renzi has come under fire following multiple warnings to recent governments about the Morandi Bridge, while the Five Star Movement in 2013 described the “imminent collapse” of the bridge as a “fairytale”.