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Island cabotage liberalization Evidence from Sardinia

Island cabotage liberalization Evidence from Sardinia. Sardinia facts and figures. Land area: 24.090 km2 Resident population: 1.665.617 (2007) Population density: 67 inh./km2 Sardinia is an Autonomous Region with

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Island cabotage liberalization Evidence from Sardinia

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  1. Island cabotage liberalizationEvidence from Sardinia

  2. Sardinia facts and figures • Land area: 24.090 km2 • Resident population: 1.665.617 (2007) • Population density: 67 inh./km2 • Sardinia is an Autonomous Region with special statute, currently divided into 8 territorial districts (provinces). A recent referendum reduced the number of districts from 8 to 4. Cagliari is the main city of the Island • Infrastructural gateways to the mainland: 3 airports (6.500.000 passengers in 2009) 5 ports (6.000.000 passengers in 2009)

  3. Maritime cabotage Legal basis • Council Regulation (EEC) No 3577/92 of 7 December 1992 applying the principle of freedom to provide services to maritime transport within Member States (maritime cabotage) Definition ► Mainland cabotage: the carriage of passengers or goods by sea between ports situated on the mainland or the main territory of one and the same Member State without calls at islands. ► Island cabotage: the carriage of passengers or goods by sea between: - ports situated on the mainland and on one or more of the islands of one and the same Member State, - ports situated on the islands of one and the same Member State;

  4. Island Cabotage – Regional Competence Sardinia – Mainland cabotage: Shared competence Sardinia – Minor islands cabotage: Exclusive competence

  5. Sardinia-Mainland cabotage Essential services are ensured only from Cagliari and Olbia to Civitavecchia and from Porto Torres to Genova 5 main harbors: Cagliari Arbatax Golfo Aranci Olgbia Porto Torres

  6. Maritime connections to the mainland

  7. Passengers transport service 75% of nearly 6 million passengers are transported by private shipping companies; On these routes Tirrenia covers the 25% of the passenger transport market. 94% of traffic is handled at northern ports 65% of passengers is currently travelling through the port of Olbia

  8. 12,5 million tons of goods carried by about 580.000 trucks are transported by ro-ro ships60% of goods are shipped by private companies Freight maritime transport Most of goods are handled by Northern Ports

  9. Sardinia – Minor islands cabotage Saint Peter’s Island . Carloforte –Calasetta Carloforte – Portovesme nearly 1.000.000 passengers 2 shipping companies: SAREMAR-DELCOMAR La Maddalena’s Island Palau – La Maddalena nearly 2.500.000 passengers 3 shipping companies SAREMAR –DELCOMAR - ENERMAR

  10. Minor islands – Saint Peter’s Island •Land area: 51 km2 •Resident population: 6,480 inh •Population density: 127 inh/km2 •Maritime connections to the main Island: Route Carloforte – Portovesme: 15 daily crossings operated by Saremar S.p.A public shipping company Route Carloforte-Calasetta: 7 daily crossings operated by Saremar S.p.A public shipping company and 7 nightly crossings operated by Delcomar S.r.l private shipping company. All services are financed by Public Service Obligations - PSO

  11. Minor Islands – La Maddalena’s Island •Land area: 50 km2 •Resident population: 11.464 •Population density: 229 inh/km2 •Maritime connections to the main Island: Route Palau – La Maddalena: 21 daily crossings operated Saremar S.p.A public shipping company; 36 daily crossings operated by Enermar Srl private shipping company; 6 nightly crossings operated with PSO by Delcomar Srl private shipping company

  12. Sardinian ferry services Ferry lines: aim at ensuring the connection between two or more ports on the basis of a public schedule or through systematic crossings. Since 1974-75 the service has been regulated by public services agreements between the Government and Tirrenia Shipping company, including its regional undertakings 2001: EU Decision 1684 states that the aid awarded by Italy to Tirrenia as compensation for providing a public service is compatible with the common market 2004: EU Decision 470 states that the aid awarded by Italy to SAREMAR, SIREMAR, TORREMAR and CAREMAR shipping companies for providing a public service is compatible with the common market. 2008: expiry date of a 20-years agreement. Regulation 3577/92 applicable to Italy’s transport services. Current Sardinian Maritime Policy guarantees the free competition among European shipowners. A new law to be approved shortly forsees that the Region can impose public service obligation through contract agreements or manage the essential cabotage services through an in-house company in order to ensure the martime territorial continuity.

  13. Maritime services ofmajor regional interest ► Regulated by a Regional law to be approved shortly ► Guaranteed by ship-owners under the EU free trade regime or by the Region through an in-house company ► Operated by SAREMAR Spa (Sardegna Regional Marittima) until the expiring of the current public service contract. ► 6 months after the enforcement of the new Regional law SAREMAR Spa will be privatized through a public tender ► The connectionscurrently managed by SAREMARbetween the Sardinia Island and the Italian mainland, will be transferred to the Regional in-house company Flotta Sarda within 30 days after the entering into force of the new Regional law ► Monitoring of Sardinian scheduled ferry services: a report focusing the state of play has to be approved every year by 30th September together with an Action Plan to be implemented by the shipping company.

  14. Tirrenia shipping company Group of State-owned shipping company providing cabotage services through 4 Regional companies: Caremar for Campania Region Saremar for Sardinia Region Siremar for Sicily Region - Toremar for Tuscany Region

  15. Tirrenia privatization 1998: beginning of the privatization process 1999: the Ministry of Economy reduced annual subsidies for future contracts and the companies Saremar, Toremar and Caremar were transferred to Regions Sardinia, Tuscany, Campania and Latium. 2008: deadline of service contracts, automatically extended until the end of 2012 without any competitive procedure 2011: tender awarded to Compagnia Italiana di Navigazione (CIN) initially created as a joint-venture between Tirrenia's main competitors, Grimaldi, Marinvest and Onorato Partecipazioni. 2012: awarding procedureblocked by DG Competition on the basis of the very high, if not monopolistic, combined market shares belonging to the parties to the merger on a number of maritime routes in Italy, and in particular on certain routes to and from Sardinia.

  16. Tirrenia privatization 18 January 2012: DG Competitionopened an in-depth investigation under the EU Merger Regulation into the proposed acquisition of a branch of Tirrenia by CIN on the basis of the very high, nearly monopolistic, combined market shares belonging to the parties on a number of maritime routes in Italy, and in particular on certain routes to and from Sardinia. The proceedings has been closed as the notifying parties have demonstrated to the satisfaction of the Commission that they have abandoned the notified concentration Italian Antitrust Authority opened an in-depth investigation on Tirrenia’s acquisition which has been closed on June under strict conditions. European Commission opened an infringement procedure against Italy for non implementation of regulation 3577/92. If Italy fails to inform the Commission within two months of the measures taken to ensure full compliance with EU law, the Commission could refer the case to the EU Court of Justice. Tirrenia privatization processisstill pending

  17. SAREMAR shipping company Since 1988Sardegna Regionale Marittima Spa (SAREMAR)manages the maritime public service between Sardinia, Corsica and the Smaller Islands. It operates between: S. Teresa di Gallura and Bonifacio; La Maddalena and Palau; Carloforte and Calasetta; It represents the sole connection between: Carloforte and Portovesme - Sardinia and Corsica in the 5 winter months. The service line between Sardinia and the Mainland has been reactivated in January 2012 thorough the connection between Olbia and Civitavecchia

  18. Saremar facts and figures Fleet: 7 ferry-ship; Crew: 200; Administrative personnel: 14; Annual crossings: 16.500; Passengers: 1,5 millions; Transported Cars: 390.000

  19. Privatization of Saremar shipping company

  20. Privatization of Saremar shipping company Public Service contract • Up to 12 years’ contracts; • Financed by national resources 13.600.000 €/year + regional resources • daily night-time sailing from and to Sardinia. Goals • Direct control over the service by the regional authority • Assure actual level of service • Maintain actual employment level in order to avoid negative social impact

  21. Public-private partnership Although private operators will be involved in the partnership, decisions need to be driven by public interest. • Regional authorities will manage the shipping company together with a community private ship owner selected through a EU wide call for tender; • PPP selection will be done on a non-discriminatory basis according to principles stated in Article 4 of Regulation (EEC) No 3577/92. • Private ship owners, considering their own commercial interest, would not be able to provide cabotage service at the following conditions: new and safe vessels, lower rates for resident population, daily night-time sailing in each direction all year round.

  22. Thank you for your attention!

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