1. Regulation and licensee companies in the Italian highways network Andrea Greco Università degli Studi di Bergamo Dipartimento di Scienze Economiche Facoltà di Economia andrea1980@tin.it Highways: costs and regulation in Europe Bergamo, November 26th - 27th, 2004

2. Before the second world war 1921 The word Autostrada was used for the first time in the Puricelli relation which present a plan for a new kind of road The word Autostrada was translated literally in other language (autoroute, autopistas, autobahn) 1922: the first highways was opened (Milano – Laghi) 1935: 311 km of highways were in operation and 6850 were planned

3. From the second world war until 1975 1954: end of the reconstruction 463/1955: the law states that highways should be financed itself with a public contribution between 20% and 36%. 729/1961: law updated the public contribution to 52% and unexpected income should be given to the government after the 5th year. Financial costs fixed at 6,5% 3600 km of new highways were opened by 1970 492/1975: Construction of new highways was forbidden

4. European highays network in 1970 Germany: 6061 Italy: 3900 France: 1553 Spain: 387 UK: 1183

5. From 1975 until today The prohibition of construction of new highways were partially abrogated in 1978 Legal limits slowed down new construction Law 190/2002 reduce the power of municipalities in the approval process

6. European highays network in 2000 Germany: 11712 Italy: 6478 France: 9766 Spain: 9049 UK: 3612

8. Highways and traffic trends

9. ANAS Manages 20 000 km of road and 894 of free highways Important participations in the concessionaries Controls licensee, approves investments, fares and financial plan Renews concessions Player and regulator

10. Price cap ΔT ΔP – ΔX + βΔQ ΔP: inflation expected ΔX: capital remuneration, future investment plan, objective of productivities variation, expected variation in demand

11. ΔX capital remuneration (clow back: yes or not?) future investment plan (uncertain in incame and time of construction) objective of productivities variation (different for each licensee) expected variation in demand (new alternative)

12. βΔQ Q = (Ipav)(0.60) + (Is)(0.40) Ipav = (Ia1)(0,60) + (Ia2)(0,40) Is = number of accidents Ia1 = roughness Ia2 = regularity β = value related with the quality of the highways in the last 5 years Problem: effects of speed limits

13. Annual income YearToll compa nies Warranty Central Fund VATTotal 200133141366854135 200235061417284375 200337661487814695

14. Market structure Autostrade per lItalia: 3400 km Astm – Sias group: 1000 km (8 companies) ANAS: 894 km Autostrade del Brennero: 314 km

15. Main data from Autostrade budget Year IncomeEbitaProfitInvestment 1997 1762956151214 1998 18601047249224 1999 19681037300370 2000 20731179339394 2001 22251322389397 2002 23591472504467 2003 257115975221467 14818861024543533

16. Main data from Autobrennero budget Year IncameMOLProfitTunnel Fund 1998 16456328 1999 17660349 2000 18655641 2001 19869341 2002 209801236 2003 225992836 115841855232

17. Problem in improving short highways Autostrade concession includes investment for 4235 million (1997) Torino – Savona is a subsidiary owned by Autostrade at 99,9% 206 million of euro were required for improving the highway The total cost was paid by Anas Same problem for the whole group ASTM – SIAS

18. Conclusion Fast development of highways since 1922 until 1976 Regulatory problem in price cap and ANAS role Interesting profits for concessionaries Problem in financing improvement for short highways

19. Thanks for your attention