Italian Railways: passenger transport towards liberalization / FOCUS

By ASLA - Associazione degli Studi Legali Associati

di Marco Cottone*

Milan - On 22 December 2018 it was published in the Official Gazette n. 297 the legislative decree n. 136 of November 23, 2018 (the “Decree”) which transposes the EU Directive 2016/2370 (the “Directive”) to complete the liberalization of rail passenger services in the EU and nationally.

The Directive is part of the Code Fourth Railway Package (also composed of the EU Directive 2016/797 on the interoperability of the EU railway system and the EU Directive 2016/798 on railway safety) which aims to provide important guidelines to Member States for market opening of national rail transport services and for railway infrastructure governance.

In implementation of the provisions contained in the community packages, the national structure of the railway system has for some years been characterized by the separation between the management of the railway infrastructure and the performance of the service, which was accompanied by the company separation between the Italian Railway Network (company which owns the sixty-year concession of the network) and Trenitalia (company entrusted with public rail service contracts for passengers and goods). These companies are considered, pursuant to the Directive, as vertically integrated and therefore subject to the independence and impartiality obligations of the manager introduced by both the Directive and the Decree.

In this regard, the Decree, which modifies the previous legislative decree n. 112/2015, with the introduction of the new articles 11 and 11bis it introduces important news on the need to guarantee the independence and impartiality of the infrastructure manager, thus avoiding that this is compromised by a conflict of interest. To this end, the regulation requires the subjects of the manager who carry out decision-making activities in the context of the adoption of deeds relating to the traffic management and planning functions, the obligation to issue, in favor of the companies to which they belong, a declaration with an annual frequency relative to any possible conflict of personal, financial, economic or professional interest connected, even if only potentially to a railway company.

The Decree also contains a series of provisions aimed at streamlining the entry procedures of new operators in the Italian market with the aim of improving the services offered. As for passenger transport, the aim is to diversify the offer by encouraging the entry of new operators in transport management by the end of this year. In particular, the art. 9 of the Decree, which modifies the art. 12 of the previous legislative decree 112/2015, regulates the right of access to the infrastructure which must take place on fair and non-discriminatory terms; this right may be subject to limitations by the regulatory body, identified in the Transport Authority, where the entry of new operators may compromise the economic balance of a public service contract that covers the same route or an alternative route .

Another important change is the one contained in paragraph 3 of the art. 20 of the Decree in the part which provides for the conversion of the “national licenses” into “licenses” for the purpose of overcoming the distinction between “national license” and “European license”, similarly to what was implemented in the other modes of transport.

The mechanism outlined by the Decree aims to guarantee greater independence to the network operator, finally placing it in an equidistant position with respect to the other players in the sector, encouraging the access of new operators.

With the completion of the Fourth Railway Package, the explicit intention of the Community legislator is to ensure a significant increase in passenger traffic by 2035 (which at present is unable to match the growth levels of air transport) through increased competition and the introduction of financial benefits for EU businesses and passengers.

* Legance - Associate Lawyers, Senior Associate - Department of Shipping and Transport