New Highway Concession Rules Renew Tension in Italian Government

(Bloomberg) -- Sixteen months after a motorway bridge collapsed killing 43 people in Genoa, the Italian government passed new rules on the revocation of highway concessions, renewing tensions between the different factions in the ruling coalition.

The decree, which was provisionally approved after a seven-hour cabinet meeting on Saturday and needs final agreement, would make it easier and less costly for the government to terminate contracts with highway operators. It could be used if the cabinet decides to go ahead in revoking the concession of Atlantia SpA’s Autostrade per l’Italia unit, which operates the motorway that was affected by the Morandi bridge collapse.

The measures lay “the foundation to revoke concessions,” the head of the Five Star party in the lower house of Parliament, Davide Crippa, said in a statement. Five Star leader Luigi Di Maio has pressed for Autostrade’s concessions to be pulled ever since the 2018 collapse.

Former Premier Matteo Renzi’s party opposed the new rules, however, saying the matter shouldn’t be decided in the end-of-year decree, according to an interview with La Repubblica. The decree shouldn’t be misused by “demagogues,” because that would hurt the confidence of international investors, he was cited as saying.

Without a change in the law, revoking the concession could lead to Autostrade receiving a payout of about 20 billion euros ($22 billion), according to a note by JPMorgan Cazenove earlier this month. The new measures could halve the compensation due to Atlantia if the concession is revoked, Il Corriere della Sera reported.

AISCAT, the toll-road operators’ association, which also represents Autostrade, strongly opposed the new rule, saying it might be against the Italian constitution.

The measures hold serious risks for highway operators, especially to their credit lines, the association said in a statement on its website. It added that the survival of the companies depended on the outcome.

The decree includes “dispositions on highway concessions,” according to a draft of the document seen by Bloomberg. Italy’s state-owned operator, Anas SpA, would temporarily manage highways in the event of any revocation, the draft says.

The measures would also include changes in the way highway operators are compensated in the case of a revocation. The decree suggested companies would receive a sum based on the investments already made if they were found to be “non-compliant” in the revocation process.

To contact the reporters on this story: Tommaso Ebhardt in Milan at tebhardt@bloomberg.net;Alberto Brambilla in Rome at abrambilla8@bloomberg.net

To contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net, Eddie van der Walt, James Amott

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