By Giselda Vagnoni and Angelo Amante
ROME (Reuters) – The Italian government has told Autostrade’s Chinese shareholder it would offer compensation should it decide to strip the toll-road operator of its motorway concession after last month’s deadly bridge collapse in Genoa.
China’s Silk Road Fund has a 5 percent stake in Autostrade per l’Italia, which is controlled by Atlantia.
A bridge on the A10 motorway in Genoa run by Autostrade collapsed on Aug. 14, killing 43 people. The Italian government has blamed the company for serious oversights and launched a formal procedure to revoke its concessions.
Deputy Prime Minister Luigi Di Maio, leader of the ruling coalition’s 5 Star Movement, had said on Aug. 27 that the only solution was to nationalise the toll motorways managed by Autostrade, Italy’s largest such operator. [R1N1UG00K]
Industry Undersecretary Michele Geraci, speaking to Reuters on Monday after returning from a trip to China, said that over his two-hour meeting with Silk Road Fund, the Chinese investor had asked about the possible nationalisation of the concession.
“I replied that there is a procedure underway and that shareholders will be given some form of compensation. To nationalise does not mean to expropriate,” Geraci said.
He explained that there would not punitive action but a regulated procedure where all the stakeholders rights would be preserved.
“We told Silk Road Fund there won’t be any expropriation,” Geraci said.
The government has already started the procedure to revoke the toll-road concession contract with Autostrade, accusing Autostrade of severe negligence over the bridge maintenance.
It should last at least five months, during which time Autostrade will be allowed to defend itself from allegations.
Autostrade said it has met all obligations under its Italian motorway concessions in a timely fashion.
At the end of this period the government will decide if conditions are met for the concession to be revoked.
Assuming the government won any appeals that Autostrade could lodge in courts, it would have to pay between 15 billion and 20 billion euros ($17 billion-$23 billion) to compensate for investments in the motorway network, sector experts told Reuters.
Autostrade per l’Italia, 88 percent owned by Benetton-controlled infrastructure group Atlantia, runs about 3,000 km (2,500 miles) of toll roads and accounts for more than 60 tHE COMPANY percent of its parent company’s core earnings.
Shares in Atlantia have lost nearly 30 percent of their value since the disaster.
Geraci also said that, while in China, he had asked Silk Road Fund, Air China and China Eastern Airlines to consider buying a stake of up to 49 percent in Italy’s ailing airline Alitalia.
Alitalia, which is struggling to compete against low-cost carriers and high speed trains, was put under special administration last year.
EasyJet, Germany’s Lufthansa and fellow budget carrier Wizz Air submitted expressions of interest this year for Alitalia or parts of its business, but the lengthy formation of a new anti-establishment government delayed the process.
Transport Minister Danilo Toninelli said in July there was a need for 51 percent of Alitalia to be kept in Italian hands “but with a strong investor next to it”.
Geraci said that “whoever ends up buying Alitalia should not be a close competitor of the Italian carrier”.
“A Chinese investor would be a potentially attractive buyer,” he said.
(Reporting by Giselda Vagnoni and Angelo Amante; Editing by Angus MacSwan)