News analysis


growth in the rail sector. After all, the rail markets of Austria and Germany are arguably the most open in Europe. Equally, as long as the IM


remains under the same organisational umbrella as the dominant operator, there will always be questions over its neutrality. The current investigation by EC antitrust


authorities into allegations by private operators of anticompetitive pricing of traction power by DB Energy (IRJ July p5) is one example of how these arrangements can be brought into question. Furthermore, the holding company model is much easier to monitor in countries with strong regulators, such as


Germany. In member states where regulators lack independence, are under- resourced, or do not have adequate powers - and there are still many of these - there is unlikely to be sufficient scrutiny, or redress for anticompetitive behaviour. Clearly it will not be practical to have a two-tier


system where some states are allowed to persist with the holding company structure while others are not, and ultimately the Fourth Railway Package will need to deliver a robust, permanent solution to this thorny issue. The only real certainty at this stage is that the answer will not be to everyone’s liking. IRJ


A key ruling for Italian open-access - but will anything change?


Marco Chiandoni Correspondent


N JULY Italy’s Competition and Market Guarantee Authority (Agcom) fined Italian State Railways (FS) for attempting to disrupt and prevent open-access operator Arenaways from operating a competing service between Milan and Turin.


I


FS subsidiary Italian Rail Network (RFI) has also been fined by Agcom for delaying by 18 months Arenaways’ application for paths without intermediate stops following a decision by the Office for the Regulation of Railway Services (URSF), which was established to manage the relationship between the infrastructure manager and train operators. These are undoubtedly important rulings and a milestone in the liberalisation of Italy’s railways, but questions remain over whether they will make life any easier for open-access operators. Italy took the bold step a few years ago to open up the rail network to open-access passenger operators well ahead of EU legislation. However, the government failed to back it up with adequate safeguards. Indeed, private operators find it very difficult to deal with FS which is the parent company of both the infrastructure manager, RFI, and national train operator, Trenitalia. Successive governments have paid lip service to railway liberalisation for many years, but the process of offering regional concessions was subject to endless delays between 2003 and 2007 before finally being cancelled in 2009. Italy’s current prime minister Mr Mario Monti, also favours


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liberalisation and has changed the law regarding regional concessions, which can no longer be directly assigned and must be tendered. Currently, most regional trains are run under a service contract between the operator and each of Italy’s 20 regions, while a few inter-regional trains are still based on national contracts. Regional services are heavily subsidised because train fares, which are government controlled, are among the lowest in western Europe.


Furthermore, the regions are


also probably too small to make them commercially attractive to large operators, but conversely too large to attract small operators which might be interested in operating individual routes. The result is that Trenitalia is the sole operator in every region either alone or in association with other train operators such as TreNord in Lombardy. However, some regional contracts are due to expire soon, for example in Emilia Romagna and Friuli Venezia Giulia, and it is hoped that the new legislation will encourage others to bid. While NTV has taken to the tracks despite several clashes with RFI over access to the


network, an attempt by Arenaways, a small private operator, to introduce a conventional passenger service between Milan and Turin ended in failure. NTV clearly had the political and financial resources to win through, but Arenaways did not. Nevertheless, Arenaways appealed to Italian regulators. Agcom ruled on July 25 that


FS, through RFI and Trenitalia, had engaged in a complex and unified strategy to disrupt and prevent the entry of Arenaways into the Italian passenger market. Despite the seriousness of FS’ conduct Agcom decided to impose a fine of only ƒ300,000 on FS. The abuse was committed between 2009 and 2010, at a time when legislation aimed at meeting the needs of passenger rail liberalisation had yet to be introduced and there was a need to maintain economic equilibrium under contracts for subsidised services. According to Agcom,


Arenaways was prevented from operating a commercial service on the Turin - Milan route by the actions of FS subsidiaries. In particular, RFI adopted delaying tactics with Arenaways’ request for paths. Paths requested by Arenaways


for the first time in April 2008 were only obtained in November 2010. For this offence, Agcom imposed a fine of ƒ100,000 on RFI. But even then URSF


prevented Arenaways from making intermediate stops, because it believed it would compromise the economic balance of Trenitalia’s service contract. URSF now says Trenitalia provided it with an incorrect representation of the facts to influence its decision in Trenitalia’s favour, organising information in such a way as to alter the analysis of impaired financial equilibrium, thereby leading to URSF’s decision to refuse Arenaways’ application to make intermediate stops between Milan and Turin. Agcom says that Trenitalia expanded and altered the timings of its services so that they overlapped those proposed by Arenaways. For this, Agcom has imposed a fine of ƒ200,000 on Trenitalia. FS responded to Agcom’s


ruling on August 9. Regarding the action taken by Agcom for the abuse of dominance by Trenitalia and RFI against Arenaways, FS says the two companies have taken note of Agcom’s decision. However, FS points out that it is required by law to maintain economic equilibrium under the service contract. FS, Trenitalia and RFI confirmed, at the same time, the accuracy of their work and reserve the right to appeal. Examining the dispute, it appears that RFI has not allocated paths equitably, while URSF is still not strong enough to oppose the will of FS. The government will need to reinforce the role of the regulator if a level playing field is to be achieved. IRJ


IRJ October 2012


Photo: Manuel Paa


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