Saturday, December 10, 2022

Italy asks Benettons for proposal by weekend to save motorway contract

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Italy has asked Benetton-backed Atlantia to ready a proposal by the weekend to save a lucrative contract to operate many of the country’s motorways and end a two-year long dispute.

Rome has been threatening to revoke the toll road licence held by Atlantia’s Autostrade per l’Italia subsidiary since a bridge it operated in the port city of Genoa collapsed in 2018, killing 43 people.

On Wednesday, Prime Minister Giuseppe Conte said he wanted a solution by the end of this week, at the latest.

Autostrade managers met government representatives on Thursday afternoon to see if it was possible to reach an agreement, with the government seeking compensation, tougher tariff rules and shareholding changes for the company to keep its contract.

A government official said after the meeting that Rome had given the company indications about the elements the new proposals should contain, including tariffs, compensation and penalties for failings in relation to maintenance and checks.

“The meeting had been officially called to reiterate that the proposals submitted so far are deemed unsatisfactory for the public interest and cannot in any way halt the process to end the concession held by Autostrade,” the official said.

The government also wants Atlantia to cut its 88% stake in Autostrade so that the Benetton family loses control of the motorway operator.

The issue will be discussed at the next cabinet meeting, the official said.

A source familiar with the matter said the Benettons could be ready to go below 50% of Autostrade if that was the only way to resolve the matter but added that depended on how any new governance was structured.

Atlantia declined to comment.

Atlantia was dealt a blow on Wednesday after a top Italian court ruled that a law excluding Autostrade from reconstruction work on the Genoa bridge was not unlawful.

The ruling coalition has struggled to find a common position on Atlantia’s future role, with the anti-establishment 5-Star Movement calling for its licence to be revoked and the centre-left PD urging caution, fearing a hefty compensation claim against the state.

In addition to reducing Atlantia’s stake in Autostrade below 50%, the government also wants the group to pay 3.4-billion-euros ($3.85 billion) compensation for the Genoa disaster.

Atlantia has always denied any wrongdoing in the bridge collapse.

In a newspaper interview on Thursday deputy transport minister Giancarlo Cancelleri, a 5-Star member, warned of a government crisis if the coalition could not agree on how to settle the dispute over the next week.

Autostrade, which counts among its investors German insurer Allianz and China’s Silk Road Fund, manages around half of Italy’s motorway network under a concession contract due to end in 2038. ($1 = 0.8825 euros)

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