Italian government is split over norms to revoke motorway concessions

By Giuseppe Fonte

ROME (Reuters) - Italy's government failed to agree on Saturday on a law that would make it easier and less costly to revoke concessions to operate motorways, a sign of division among the ruling parties on how to handle the aftermath of a fatal road bridge collapse last year.

A government minister who did not want to be named said after a five-hour cabinet meeting that the government had provisionally approved a document, but measures still needed to be agreed on before it becomes definitive.

The decree being considered says that state-owned roadway company ANAS will temporarily manage motorways if an operator has its concession revoked, a draft document seen by Reuters shows.

It also considerably reduces the amounts the government must pay to a toll road company if a concession is revoked due to shortcomings on the part of the operator.

The ruling 5-Star Movement has repeatedly blamed Atlantia<ATL.MI>, a company controlled by the Benetton family, for the disaster caused by the collapse of the Morandi bridge in Genoa last year, in which 43 people were killed. The bridge was operated by Atlantia road unit Autostrade per l'Italia.

Atlantia has denied any wrongdoing and said it carried out maintenance of the bridge as required by the contract.

The decree does not mention Atlantia, but a government source told Reuters that the measures could be applied to it.

Prime Minister Giuseppe Conte said this month a decision on whether to revoke Atlantia's motorway concession would be taken by the end of the year.

REVOKING OR RE-NEGOTIATING?

The fate of the concession has been a source of disagreement between 5-Star and its centre-left allies, the Democratic Party (PD) and Italia Viva (IV).

Sources for the PD party said earlier this month that re-negotiating the concession would present fewer risks for state coffers than revoking the concession and potentially triggering a lengthy legal battle.

The draft decree says that if the concession is revoked due to shortcomings on the part of the operator, the state will have to pay the company only an amount equal to the value of the investments made in the highway network minus any compensation for the damages caused by mismanagement.

Such a scheme would result in a compensation lower than the 15-20 billion euros calculated by financial analysts on the basis of the current contracts between the government and Atlantia's Autostrade per l'Italia.

The proposed decree also delays until June increases in motorway tolls due to kick in at the start of next year.

(Reporting by Giuseppe Fonte; Writing by Giselda Vagnoni; Editing by James Drummond, Alexander Smith and Frances Kerry)