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

This article provides an outline of the main aspects of the regulatory framework of Italian railways, including the structure, services, access, licensing, infrastructure, and regulatory organization. It also discusses recent changes and proposals in railway services and infrastructure regulations.

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

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  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. Other Ministries Regulator Ministry of Finance Ministry of Transport CIPE Railway regulation in Italy • Services: • Criteria for the determination of tariffs; • Approval of service contract (service obligation and remuneration) • Investment plan of Trenitalia NARS Evaluations, guidelines & proposals • 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. Other Ministries Regulator Ministry of Finance Ministry of Transport CIPE Owner 100% Business Plan Technical & safety regulation Access charges Access rules Invest. plan Evaluations & proposals NARS Stakeholder FS – holding RFI Trenitalia Other companies Access charges Access rules Investment Plan quality Service Contract Price cap Service obligations 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. X Inflation (adj. RPI) Quality Gap-recovery Adjustment factor 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)

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