ITALY:Autostrade world’s largest investor-owned pike

The privatization of Autostrada SpA the former state owned toll company in Italy is now complete. The state’s holding company IRI which had held 87% of the equity sold out is share to investors in two huge share placements that raised $7.5 billion. About $2.6b consisted of shares privately placed with Scheme 28, a company dominated by the Benneton family of trendy clothing fame, together with Spain’s Acesa and Portugal’s Brisa toll companies. The private placement was designed to give a coherent controlling interest to a known group to provide some continuity of management.

The privatization process was heavily drawn out with court challenges and difficult renegotiation of the concession agreements with the Italian government. The privatization is part of a broader move to decentralize control of former state owned businesses and make them subject to market forces.

The Autostrade group operates 3,120km (1,950mi) of toll motorway, and in 1999 produced toll and other revenues of $1,850m for a net profit of $280m (We are using Dec 00 exchange rates for conversion.) In two years the group has approx doubled its profits and dividends to shareholders, and raised equity with ease while reducing debt by a third.

The larger part of the Autostrade network now has a concession expiry date of 2038. It represents just under half of the country’s motorway network of 6,478km and just over half of the tolled part of the motorway system (5,584km.)

Autostrade routes are heavily north-south oriented with the earliest spinal A1 road Milan-Bologna-Florence-Rome-Naples very heavily trafficked in the northern part. At Bologna the A14 splits off and heads down the east coast. Autostrade operates major urban tollways in Milan, Naples and Genoa. (Rome’s motorways are untolled.) Major east-west tollways in the north are operated by other concessionaires.

Traffic last year on Autostrade’s system was 44b veh-km traveled (27.5b veh-mi), more than any single US toll facility but a bit less than total traffic on all toll facilities in the state of New Jersey (32.8b veh-mi), the US’ biggest toll traffic state. Autostrade had more traffic than the NYS Thruway (10b veh-mi) and more than all the NY toll facilities (20.2b veh-mi).

Traffic grew 2.7% in 99, a bit less than in the previous two years. Tolls are raised annually in Italy according to an agreed formula written into the concession contracts. They have been rising an average 2.6%/yr recently. Truck traffic represents about 23% of total traffic, a higher proportion than any US facility with the possible exception of the Indiana Toll Road.

The system is undergoing only small extensions. Plans for completing the A12 northward from Rome along the west coast have been bogged down in NIMBY protests and environmental law suits and officials told us they regard their concession for this road (Cecina-Civitavecchia) as “rather theoretical.” But there is massive widening and reconstruction of the existing motorways and interchange improvements going on to cater to increased traffic.

925km of the total 3120km is already three or more lanes each side. 3rd and 4th laning is being pursued many places in the network with a capital works program costing about $210m/year. Some of the most spectacular works are new tunnels and bridges in the Florence-Bologna section of the A1 where it goes through the Pennine mountains. A few sections of the tollway system are still a single carriageway or roadway (one lane each direction) but most of these are now being doubled – or as the Italian translation has it ‘re-doubled’! – to make the conventional 2x2-lanes.

Toll systems

Autostrade’s system is basically a trip toll system with ramp plazas where entries and exits are registered and tolls calculated, and collected on exit. The system does a daily average of 1.7m toll transactions. 775k or 46% are cash transactions paid to a staff of just under 3,600 toll collectors (2785 fulltime.) Five different systems of automatic payment are in use, accounting for about 900k toll transactions/day. Electronic toll (ET) collection with the brandname Telepass uses passive backscatter transponders and in the latest annual report it is described as doing 475k transactions/ day or 28% of the total tolls. Some 1.5m transponders were on issue by Autostrade. Other automatic systems include self-swipe magstripe cards, prepaid and post-paid, and so called automatic tellers, which are fancy coin/bill machines that give change.

Autostrade operates some 2088 toll lanes of which about a half are wired for ET. It has some 261 toll plazas or ‘stations’ as it terms them.

500 deaths

The system has a poor safety record by US standards. 500 people died in smashes on the Autostrade system in 1999 and there were 7,552 injury accidents. Deaths were 11/billion veh-km traveled, or 1.8/hundred-million veh-mi. 39 of the deaths were in the one Mont Blanc tunnel fire of March 1999 – very costly to Autostrade, one of whose subsidiaries (Traforo del Monte Bianco) was the Italian-half concessionaire (the rest of the tunnel is in France run by a French concessionaire.) The tunnel will likely be closed more than 3 years. Reconstruction and new safety refuges and systems took over a year to be designed and approved, but construction is now under way. The two companies are spending some $150m on the reconstruction, though insurance covers some of the costs.

Many of the original Italian motorways have very tight unforgiving offsets of the lane edge from crash rails, and narrow breakdown shoulders. The rebuilds and widenings are improving safety margins, and new rules designed to reduce conflict between cars and trucks are being investigated. And, of course, they have to deal with crazy Italian drivers. (Contact Guiseppe Palma, Autostrade Int VA 703 904 6958)