The regulatory framework of the Italian railways: an outline of the main aspects

1
The regulatory framework of the Italian railways
an outline of the main aspects

• Angela Stefania Bergantino
• (University of Bari)

First Conference on Railroad Industry Structure,
Competition and Investment Round Table IDEI,
Tolouse (France) 7-8th November 2003
2
Main characteristics

• Structure Unbundling (separation within same
  group)
• FS holding Trenitalia (services) RFI
  (infrastructure) other companies
• Services
• Access open access with licence (35 licences ?
  80 freight)
• Freight completely liberalised (but only ? 2-3
  third operators)
• Passengers
• Regional-local service obligation direct
  assignment competitive tendering (continuously
  postponed ? 2005)
• Medium-long distance formally open access (with
  licence)
• Medium-long distance public service obligations
  (night-car) direct assignment competitive
  tendering (? 1/1/2006).
• Licencing body Ministry of transport (MT)
• Rolling stock owned by Trenitalia (Antitrust no
  essential facility in local service tendering
  Boll.26/03)
• Service tariffs regulated by CIPE with the
  support of NARS

3
Main characteristics

• Infrastructure
• Infrastructure manager exclusive rights to RFI
  (until 2060)
• Path allocation RFI
• Determination of access charge structure and
  procedure CIPE with the support of NARS
  (inspiration to marginal cost pricing)
• Informational Network Prospect RFI (since 2001)
• Calculation collection of charge RFI
• Freight terminals owned by RFI ? rented directly
  to Trenitalia ? Antitrust (Boll.32/03)
• Regulatory organisation (art. 30 D. 14/01)
  Ministry of Transport (DL.188/03)

4
Railway regulation in Italy
NARS Evaluations, guidelines proposals

• Services
• Criteria for the determination of tariffs
• Approval of service contract (service obligation
  and remuneration)
• Investment plan of Trenitalia

• Infrastructure
• Criteria for the determination of access charges
• Criteria for the allocation of slot
• Approval of Railway Network Plan (every two
  years)
• Approval of concession contract (done)
• Investment plan of RFI

NO TRANSPORT AUTHORITY
5
Railway regulation in Italy
2004 - Regulatory Organisation Consumer
protection
Concession (60 years)
licence
6
The latest changes

• 1) railway services proposal for new regulatory
  guidelines by NARS
• A new price-cap
• 2) railway infrastructure
• Implementation of the EU directives

7
Services the new price-cap(september 2003)
1) Global price cap it includes all services,
discounts, special fees (leaves greater
commercial freedom, safeguards consumers,provides
for the inclusion of High Speed services, might
facilitate discriminatory pricing) 2) It allows
to obtain a fair remuneration of capital (wacc)
provides a system of incentives for capital
remuneration 3) Provides for a system of
premium/penalty for quality changes
8
Infrastructures the new regulation of railway
network - Decree 188/2003implementation of EU
directives (12-13-14/2001)

• Extension of the applicability of the provisions
  to the regional network where it is connected to
  the national (free access, separation)
• Introduction of the authorised applicant
  (extension to subjects who are not railway
  undertakings)
• All licence holders can supply all-national
  passenger and/or freight services
• New guidelines on track access charges and their
  determination (Ministry of Finance Ministry of
  Transport with approval of CIPE (? NARS)
• Regulatory Organisation Ministry of Transport
• Allocation of infrastructure capacity remains
  with RFI (Infrastructure manager - art.4 D.
  14/01)
• Art. 20 it allows one year from the
  implementation of the law (october 2004) to RFI
  to assign to an independent third party the
  services included in the annex II.2 of D.14/01.
• Trenitalia as the exclusive right to manage the
  majority of the freight terminals (61) on the
  territory Antitrust case (boll. n.32/03)