European Commission Confirms that the Extension of Motorways Concession Agreements Constitutes State Aid

The European Commission (EC) approved¹ under EU State aid rules two Italian motorways investment plans. The Italian motorway network covers circa 6 800 kilometres and is managed by public and private operators. The latter manage about 5 800 kilometres of the network under concession agreements. By means of the concession, the public authority entrusts a private operator with the execution of works and the subsequent provision and management of services on the constructed highway. The entrustment involves the transfer to the concessionaire of the relevant construction and operational risk.

Under the current Italian framework there are several different tariff systems aimed at ensuring the financial equilibrium of the concessions. The funding is normally based on a financial plan under which the expected revenues (toll tariffs or other additional revenues) rebalance the investment costs and remunerate the concessionaire invested capital. Hence, there is a direct relation between the investment and the toll tariffs that consumers pay to use the motorways.

The notified Italian motorway investment plans, subject to the EC’s State aid scrutiny, allows the modernization of the Italian motorway network (additional lanes, new tollbooths, widening existing bridges, new overpasses, anti-noise barriers) and is specifically related to two operators: Autostrade per Italia (ASPI) and Societá Iniziative Autostradali e Servizi (SIAS). The respective investment plans are based on the extension of the concerned motorway concessions, thereby allowing the recoupment of the investment costs over a longer life period whilst simultaneously keeping the toll tariffs at a socially sustainable level. Absent the prolongation of the concessions, the toll tariff increases would reach, for ASPI, 46% and for the SIAS concession an average of 58%.

In the adopted decision the EC confirms that the prolongation of the concession agreements implies the attribution of an extended exclusive right to collect toll revenues by the concessionaire concerned. As such, per EC’s standing, the Member State, owner of the infrastructure, renounces to directly collect the toll revenues during said extension, period during which it could keep the assets in State hands and exploit them commercially. Therefore, in the EC’s assessment, such time extension amounts to a waiving of State resources to the benefit of the private operators. Further, as the concessionaires, in what regards the extension of the concessions, were not chosen by way of a public tender, the EC also considered that the measures should be apprehended as entailing an economic advantage in the exclusive benefit of the motorway operator.

Moreover, the Italian measures were assessed and validated by the EC under the Services of General Economic Interest (SGEI) rules, specifically Article 106(2) TFEU and the EC’s SGEI Communication,² as the investments to be executed in the motorways were deemed necessary in order to implement a series of objectives, ranging from improving mobility and shortening the duration of travelling on key routes on the Italian network, to limiting structural traffic congestion. Further, the concerned services were considered as key infrastructure components integrated into the Trans-European network, thereby contributing at European, regional and local level to economic, social and territorial cohesion.

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