The Italian Competition Authority keeps itself busy with the rail transport sector

At the end of October the Italian Competition Authority or ICA dealt with a number of issues regarding the rail transport sector.

First, it released an opinion over Article 19 of the General Terms and Conditions for the Transport of Passengers adopted by Trenitalia, the Italian incumbent train operator (decision of 22 October 2009, AS 635 Condizioni e tariffe per i trasporti delle persone sulle Ferrovie dello Stato). This provision rules that fares are fixed on the basis of distance run by trains, taken from the Trenitalia official handbook. Under no circumstances the shortening of distance following the construction of new lines or the upgrading of existing lines shall be taken into account in determining fares.

Though rail fares are nominally distance-based it may happen that with regard to some routes (for example the new high speed line Rome-Naples) the fares charged to passengers do not correspond to the effective distance, as the lines run by trains are new or upgraded.

In the ICA view this way to fix rail fares infringes the principle of transparency as codified by the Consumer Code, and it recommends to accordingly modify Article 19.

On the same day with two decisions the ICA closed investigations against Ferrovie dello Stato group or FS over refusal to grant Nuovo Trasporto Viaggiatori (NTV) access to some facilities (decisions n. 20392 and 20393, 22 October 2009, case A409, NTV/RFI-Accesso al Nodo di Napoli).

NTV is a new rail operator that plans to launch in 2011 high speed passenger transport services competing with Trenitalia. NTV reported to the ICA that FS had denied it access to the train maintenance center of Naples (Impianto Dinamico Polifunzionale del Nodo di Napoli or IDP) and to spaces within station buildings.

As for access to station buildings, the ICA did not found evidence of anti-competitive practices. On the contrary, FS committed to not discriminate against NTV and also facilitated negotiations between NTV and the station managers. The negotiations should be concluded in time to enable NTV to start operations in 2011 as originally planned. Therefore, the ICA did not find any competition infringement.

As for access to IDP, the ICA settled the case by a commitment decision, under which FS offered to make available to NTV the Fascio Traccia Alta area (the Area), located within the main station of Naples near the IDP, for the construction of a maintenance center on the basis of objective and cost-oriented economic conditions.

NTV replicated that the Area was unsuitable for its needs and also lamented that the construction of a maintenance center from the scratch would take too long a time and would be also banned by local planning rules. These observations were then confuted by FS and the municipality of Naples made it clear that no planning rules would be infringed by building a maintenance center in the Area. The ICA approved the commitments proposed by FS in that they give NTV a quick and cost-effective access to a suitable maintenance facility, as origibally acknowledged by the same NTV in November 2008.

Interestingly, while litigating access to the IDP in June 2009 NTV signed an agreement to build its own maintenance center. So one may assume that access to the IDP was not so essential as claimed by NTV or that the NTV request to access to IDP appears to be an attempt to strategically use competition rules to further its own interests, frustrating the rival’s activities.

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