Call for input on the Italian port industry to define new regulatory measures

As is well known, the Italian Transport Regulation Authority (“ART”) was established[1] by Italian lawmakers in order to - inter alia - “ensure, in accordance with methods that encourage competition, the productive efficiency of management services and the containment of costs for users, companies and consumers, fair and non-discriminatory access conditions to rail, port, airport and highway infrastructures (…), as well as in relation to the mobility of passengers and goods at national, local and urban level also linked to railway stations, airports and ports”[2].

By Decision No. 40/2017, ART started a process aimed at adopting a regulatory act setting out the methodological framework and the criteria to be applied to the national port system, in order to ensure fair and non-discriminatory access to the relevant infrastructure.

Said process was actually concluded with the adoption of the first regulatory measures issued by ART in the port sector, set out in a document called “Methodologies and criteria to ensure fair and non-discriminatory access to port facilities. First regulatory measures”, approved by Decision No. 57/2018.

Now, four years after such first regulatory measures, ART feels the need to verify their actual impact on the port industry and to revise/supplement them accordingly.

To this end, ART launched at first an “Impact assessment” of the regulation introduced by Decision No. 57/2018[3] and subsequently a call for input with the aim of collecting observations and other useful elements on the fair and non-discriminatory access to port facilities, with the aim of updating and supplementing the aforementioned regulation[4].

There is no doubt that such call for input represents an important opportunity - offered to operators - to contribute to the definition of new regulatory measures to be applied to the port sector.

So, let us take a closer look at the contents of said call for input, pointing out that, as a matter of fact, it is not the only dialogue presently opened by ART with the port industry (we will report below on two further dialogues currently open).

1. Decision No. 170/2022 - Call for input on the Italian port industry

As mentioned above, ART has preliminarily launched an impact assessment of the first regulatory measures in the port sector that it adopted in 2018.

According to the recitals to Decision No. 170/2022, said impact assessment revealed the “limited effects” produced by the first regulatory measures mentioned above. Such limited effects, in combination with the need to adapt said measures to the new market environment, apparently prompted ART to initiate a process for revising such measures.

Hence the call for input initiative, whereby ART approved a document entitled “Determination of methodologies and regulatory criteria to ensure fair and non-discriminatory access to port facilities - call for input”.

Said document covers all the “issues in the spotlight” in respect of which ART intends to collect comments from operators. For the sake of conciseness, that is required here, we are unable to go into all such issues in detail, so we will limit ourselves to outlining the ones we consider most relevant, which are the following:

• ART highlights the growing phenomenon of vertical integration between shipowners and port operators. Also in the light of this phenomenon, ART wishes to receive observations with respect to issues relating to the publication of tariffs and the supervision of their proper application, the effective contestability of areas, the compliance with business plans and the possible sanctioning mechanisms to be provided in case of non-compliance with the commitments made by the concessionaire[5]. Moreover, with specific reference to the aforementioned phenomenon of vertical integration, ART is considering the hypothesis of introducing a minimum percentage of terminal capacity dedicated to cargo handling on behalf of third-party ship owning companies (i.e. not belonging to the terminal group);
• duration of the concessions and end-of-concession indemnity: ART considers it useful to identify specific criteria in order to parameterize the duration of concessions to the investments planned by the concessionaire in its own business plan (also on the basis of the type of investment) and considers it appropriate to determine in advance the criteria for calculating any indemnity in favor of the outgoing concessionaire at the expiry of its concession;
• determination of concession fees: ART aims to identify incentive mechanisms for establishing the variable part of the concession fee, providing for a relevant annual update based on the results achieved by the concessionaire. This also by means of tools to measure the concessionaire’s performance;
• incidence of new infrastructures that might be built today with public funds (such as, first and foremost, the NRRP (National Recovery and Resilience Plan) funds) and that could favour only some concessionaires to the detriment of others;
• access to services (including also energy supply) and essential port facilities (including also last-mile rail infrastructure): ART is considering further measures to ensure fair and non-discriminatory access to said services and facilities. Moreover, in this context, issues related to self-handling operations and the discretionary power of the AdSPs (Port System Authorities) in defining port charges and fees also come to the fore;
• concessions granted pursuant to Article 36 of the Italian Navigation Code for cargo handling and passenger services in ports: ART is considering adopting, for concessions granted pursuant to Article 36 of the Italian Navigation Code, regulatory measures similar to those for concessions granted pursuant to Article 18 of Law No. 84/1994, where compatible.

The deadline for submitting to ART any comments on the issues in question - or other issues deemed, however, of interest - will expire on 6 December 2022. A further round of discussion is likely to follow, especially through dedicated hearings, before finalizing the new regulatory measures.

ART has planned to conclude the revision process of the regulatory measures at issue by 29 July 2023.

So, for those who wish to bring to ART’s attention their input on the best regulatory measures to be adopted in the port sector, now is the time. In our opinion, a broad participation in the call for input is certainly advisable to ensure that the regulatory measures can be actually in line with the needs of our industry.

2. ART Decision No. 157/2022 - Impact assessment of the regulation concerning the methodology for determining the reasonable profit margin in maritime cabotage services and road and rail LPT (local public transport) services

As already mentioned, the call for input on ports is not the only dialogue opened nowadays by ART with regard to our industry.

Indeed, with Decision No. 157/2022, ART started the impact verification assessment of the regulation concerning the methodology for determining the reasonable profit margin in maritime cabotage services, referred to in Measure 10 of Annex A to Decision No. 22/2019, and in road and rail LPT services, referred to in Measure 17 of Annex A to Decision No. 154/2019.

Again, we are talking about regulatory measures adopted in the last years (precisely in 2019) for which now ART deems it appropriate to assess the actual impact on the market with a view to their revision (also in the light – one more time - of the changed economic context).

This impact assessment will end on 30 November 2022, hence, this is the deadline for sending any comments.

3. Decision No. 183/2022 - public consultation for the determination of the contribution for the operation of ART for the year 2023

This consultation is not only of interest to our industry, but to all entities regulated by ART. Such a consultation is, de facto, repeated every year, but it “touches” on a particularly sensitive topic (and in fact was the subject of numerous disputes over time): we are obviously referring to the fee for the operation of ART.

Indeed, this year too, ART has decided to put out for consultation a document - called “Consultation document concerning the determination of the fee for the operation of the Transport Regulatory Authority for the year 2023” - in order to gather comments from those concerned.

There is time until 4 November 2022 to make your voice heard.

In this regard, finally, we wish to point out that ART has recently signed with the Customs and Monopolies Agency (Agenzia delle Dogane e dei Monopoli) an operational protocol (which follows the execution of a Memorandum of Understanding (Protocollo di intesa) signed in January 2021) aimed at optimizing the “monitoring of import/export activities through national port calls, as well as inspection supervision activities in port areas, with particular reference to the proper compliance with the provisions concerning the fee for funding the Authority, as well as in relation to the proper formation and updating of tariffs and fees, taking into account the principles and criteria indicated by ART”.

This article is for information purposes only and is not, and cannot be intended as, a professional opinion on the topics dealt with. For any further information please contact Simone Gaggero.

[1] Pursuant to Article 37 of decree law No. 201 of December 6, 2011, converted, with amendments, by Law No. 214 of December 2011, 22.

[2] See Article 37, paragraph 2, point a) of decree law No. 201 of December 6, 2011.

[3] The impact assessment was started with Decision No. 153/2022.

[4] The call for input was launched with Decision No. 170/2022.

[5] ART is also considering the possibility of introducing a Service Level Agreement (SLA) system and other tools for measuring the concessionaire’s implementation of investments, with possible reward or penalty mechanisms.