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Public Services

Local public services: the evolution of the regulatory framework

Water and environmental services

The consolidated environmental act was gradually reviewed over 2007 (Legis. Decree 152/06), which re-defined waste in terms of European Community jurisprudence and substantially aligned consolidated management procedures.
There is nothing of significance in the new management and assignment model plans even though the government had presented a proposal involving radical reform. Even though the local public services reform bill (Lanzillotta bill) was approved at the first reading by the Senate, it hasn't yet been finalised due to the fall of the government.
Reform of the water sector market has been continuously excluded from the various versions of the bill presented, which indicates a tendency that was confirmed by a moratorium put on tenders to assign water services introduced during approval of the regulations in favour of consumers and competition. However, water sector regulations are currently under review: the supervisory committee on water resources started an analysis on tariff regulation and intend to propose a reform to make the system more efficient, and giving greater protection to the people.
Regulatory acts will be formulated from discussions held at a regional level: a regional tariff method came into effect in Emilia Romagna on 1 January 2008 which established obligations regarding the efficiency and service quality levels, and unlike the standard setting of capital payment provided under the national regulatory method, sets this payment using the more logical criteria of the effective cost of capital.

Competition rules for the gas distribution market

The passing of the decree of 1 October 2007 containing urgent public finance measures, and subsequently modified by the 2008 finance law, once again affects the gas tender process after the changes to the original imposed by the Letta decree made effective by the Marzano law and the so-called milleproroghe decree of 2006 (passed into law no. 51 of 23 February 2006).
Unlike the recent past where repeated legislative actions redefined the residual duration of the licenses directly granted, the regulation does not change the expiry date of the licenses, which therefore stay as defined in accordance with the above noted changes of the Letta decree, but rather introduces organisational criteria with which to carry out the tender process.

The law changes the "municipal tenders" and gives the right to the government to identify optimal customer bases, with the assistance of AEEG. The tenders will therefore be carried out in accordance with different and broader territorial bases compared to current ones. The customer bases will have to be identified within a year of passing the law (therefore by 29 November 2008) and the tenders carried out two years from said identification. A standard call for tenders will probably be introduced which will include the evaluation of the bidders and the financial aspects, qualitative parameters and reliability of the management.

The regulation also provides that the municipalities interested in the "new calls for tenders" will be given, where less, a fee of 10% of the restriction on the distribution revenues. This provision aims to safeguard the assets of municipalities whose licenses have expired (in the absence of extensions pursuant to Letta and Marzano, in fact, licenses in being pursuant to law expired on 31 December 2007) and which therefore have been damaged by the postponement of the tenders waiting for decisions on the customer bases.

It is possible that the optimal customer bases will be established on the basis of the aggregation of the current customer base tariffs. Their establishment will be coordinated with the regulations being formulated and noted under paragraph 2.2 on the distribution tariffs.