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CONFERENCE PROCEEDINGS
13th Toulon-Verona Conference “Organizational Excellence in Services”
University of Coimbra (Portugal) – September 2-4, 2010
pp. 689-704 – ISBN: 978-972-9344-04-6
Alliances and Groupings in the Local Public Transportation Sector
A Preliminary Survey of Strategic Motivations
by Alessandro Danovi and Dimitris Karletsos (Bergamo University - Italy)
Contents: 1. Introduction. – 2. LPT aggregations in literature. – 3. Regulations and growth – 4.
Empirical analysis – 5. Distribution size and geographical expansion strategies. – 6. Aggregation
types in geographical expansion strategies. – 7. Conclusions.
1. Introduction
Like other sectors in Italy, Local Public Transportation (LPT) has been characterized by a profound
lack of change for many years. Only recently, after Act 422/97 (Decreto Burlando), has the basis for
broad reform of the sector been posed (Agostini, 2005). By entrusting the services through public
selections, the law has forced Local Authorities to seek new strategies in order to reach a sustainable
level of efficiency, by simultaneously promoting, liberalizing and modernizing the services.
Operators, accustomed to working in a competition-free atmosphere, have had to face the changes by
establishing alliances and collaborations, which have in turn redefined their competitive position.
In this context, the paper analyzed 32 within the most important alliances, consortiums, acquisitions
and partnerships between diverse major LPT companies in Italy between 2000-2010. The purpose was
to single out the main trends in the sector, paying special attention to the aims of the operators, their
needs and strategies. In this thorough investigation an important role was played by the analysis of the
context in which the process took place.
In terms of methodology, while scientific literature on utilities is broad, texts specifically addressing
LPT in Italy have been less numerous (see Giordano & Zoppi, 2000; Montanari & Zara,2000; Boitani
& Cambini 2004; Agostini, 2005; Mangia, 2005; Bucci, 2006; Capriello, 2006; Pizzetti, 2006;
Giuricin, 2008). The study is mainly based on public sector data, from the companies themselves
(company reports and other documents) or from specialized journals.
The main conclusions are as follows:
• management styles (only recently more effective), the fragmentation of the sector, together with
one of the lowest average productivity rates in Europe, have made Italian companies smaller and
poorer in terms of capital, with little space for significant autonomous growth.
• In coping with new regulations, the local companies seem to have reacted without a plan, some
facilitating and others rejecting change.
• In general terms two types of defensive strategies have been implemented by players involved in
this struggle for gaining control of LPT in Italy:
o The first and perhaps most controversial has to do with local public authorities designing
selections on the characteristics of the local company, formally transformed into private
corporations (SpA), but still owned by the local government;
o The second (which is the main aim of this paper), is to define alliances and aggregations
in order to encourage the growth of the company also through the spreading into other
territories. This is a defensive strategy, which is also nonetheless aggressive in certain
respects.
•
•
In fact the panorama shows the co-presence of companies whose owner claims that Italy is not
ready for an indiscriminate opening of the market, where operators try to group in order to
transform from potential prey into predators and of public-owned companies which have
welcomed foreign capital. The latter probably represent the most serious threat for the (few) large
Italian LTP operators which risk being surrounded by international groups. These groups, born in
a context that favoured aggregation and expansion, appeared on the scene, strong and out of
proportion if compared to average Italian companies.
This is the starting point for the need to establish solid networks, for companies active in
contiguous territories, or with consolidated “in house” positions. Once they have made strategic
alliances, they need to counterattack through geographical expansion, even beyond national
borders, to take advantage of opportunities left vacant within the large common European market.
2. LPT aggregations in literature
As stated above, despite the vast amount of literature dedicated to utilities, not many studies have
been carried out regarding LPT aggregations in Italy.
Mariti and Smiley (1982) identify economies of scale, in the technological complementarity and in the
expansion of the market as the main reasons why companies formulate agreements and alliances. This
definition, unexceptionable in general and theoretical terms, needs to be reconsidered in the light of a
few recent studies, specific for the LPT sector.
Fazioli, Filippini & Kunzle (2003) are among the authors who have investigated the problem of
productive efficiency and the dynamics of costs in the sector. Comparing two distinct samples of
different companies from Italy and Switzerland, the presence of economies of scale were shown in
companies of all sizes, although more frequent in small and medium sized companies. Fusions
between companies with confining catchment areas would make it possible to take advantage of these
economies and increase efficiency. Fraquelli & Piacenza (2003) also reach similar conclusions. They
stressed the presence of economies of scale, acquired thanks to groupings of companies with adjacent
transportation networks. The most emblematic cases are in the search for efficiency in companies
operating in the urban and extra-urban in the same city and province. The savings depend on the
scope economies derived from combined production.
Different findings can occur for operators in large cities (Rome, Naples, Turin). Fraquelli, Piacenza
and Abrate (2001) highlight possible diseconomies of scale as the average unit cost for passenger /km
showed a U-trend, falling from 0.43 euro for small companies to 0.38 for medium sized companies
increasing to 0,51 euro for large operators. This fact, if confirmed, would not invalidate the presence
of unexpressed economies of scale in the sector, but would suggest a need for a double solution in
defining the catchment areas. While the need to merge the small sized catchment areas (and operators)
remains in order to encourage efficiency, a good idea might be to split up the large cities into subcatchment areas and assign them to different operators to stimulate competition.
Other studies (Karlaftis and Mc Carthy 2002; Filippini and Prioni, 1994) draw similar conclusions
regarding the presence of economies of scale in the sector. They introduce in an even more striking
way the theme of regulations by policy makers. In fact, not only are LPT companies underdimensioned in Italy with respect to their optimal size, but also the dimensions of the catchment areas
should be rethought by policy makers. It is reasonable to ask how important are the regulators, when
they define the boundaries to be assigned, striving for economies of scale and density, and how much
weight political and jurisdictional barriers have.
Cambini and Filippini (2003) address the problem, noting the necessity of policy makers to define the
catchment areas to assign in order to encourage groupings and create economies of scale and
efficiency. In 2003 – they stress- the configuration of the process for the public selection did not seem
to foster merger processes.
It must also be added that even though several years have passed, the situation still seems
substantially the same, with the exception of a few proposals for the provincial or regional
organization of the catchment areas for future calls for tender. In 2007, the organization of the LPT
sector, only for bus lines (thus not counting trams and subways), showed 1,191 active operators, of
which 62.5% had fewer than 10 employees1. The lack of integration and uniformity between the
different realities (not only between regions, but also between provinces and sub-catchment areas in
the same regions) was probably the largest problem regarding new stimuli for operators and
relaunching the sector.
3. Regulations and growth
Yet, as we will argue below, the sector has been involved in a trend for concentration in the past few
years. The push towards alliances and groupings and the growth of operators, are probably secondary
results of a reform born to address other issues. They can be interpreted as defensive strategies with
which active LPT companies respond to the changing regulations.
The legislator’s intentions, to guarantee new service quality levels and to reduce the public costs
through the use of competition, has generated in operators the awareness that they have to redefine
their strategies, searching for alliances and size growth, against the threat of being excluded from the
market.
Within the EU, the difficulty of reaching a shared vision is evident due to the long timeframe needed
to regulate the sector. After 1969, the year of the first EU LPT guidelines, it was not until EU
Regulation 1370/2007 that the dispositions were defined to open the market for competition. The
choice of leaving much leeway allowing the member countries a lengthy transition period (to
December 2019) to set out the most appropriate rules for their particular needs, seems to privilege
principles of subsidiarity and flexibility in the various countries, at the cost of harmonization and
uniformity.
Under this stimulus, in Italy, the regulations have developed in one direction, apparently in a coherent
manner, despite numerous delays. The redefinition of the relationship between local organization and
operators, dates back to Act 142/1990 where municipalized companies were replaced by private
companies2. Only a few years later Act 422/1997 (Decreto Burlando) was approved, stating the final
deadline for the transition to private companies (S.p.A.), and the definition of regional competences,
for the assignment of service contracts through competitive bids.
This moment, optimistically provided for in 2003 following the successive regulations (the latest
being Act 166/2009), has been postponed to December 2011. This has led to great regulatory
uncertainty for operators, regarding the stability and exclusivity of the catchment areas.
It must also be added that, even within the confine dictated by the national legislator, the Regions
have up to now acted at their discretion, assuming at times a proactive attitude towards the reform,
embracing the selection for the assignment of the service, or on the contrary, maintaining direct
management of the service, while waiting for additional extensions.
4. Empirical analysis
1
2
Ministero delle Infrastrutture e dei Trasporti, Conto Nazionale delle Infrastrutture e dei Trasporti, years 2007-2008.
Gilardoni, Danovi, 2000, p. 182 ss.
In this context we tried to map 32 cases of alliances, consortiums, acquisitions and partnerships,
considered to be within the most important or most representative in the field.
In a few cases (partial or total acquisitions) the grouping was the only or main operation which took
place. In others the main operation was in the participation of one or more selections for being
awarded the service contract. It is interesting to follow the evolution of the “grouping centres” which
followed the main operation.
The timeframe of the analysis lasted until January 2010 and coincided with the period of the greatest
ferment of alliances and groupings, begun in 1997 with the Decreto Burlando and the plan, later
retracted, to launch regulated competition throughout Italy starting from 2003. It is no coincidence
that in 2000, the first grouping, the Società Consortile Tevere TPL, composed of diverse operators in
different areas in order to be assigned the service contract for the management of extra-urban lines in
the area surrounding Rome.
As stated in the doctrines (Pivato et Al., 2004; Conca, 2001), alliances are usually divided between
weak and strong according to the size of the boundaries established.
In the cases considered, the different types of groupings constitute a sample which allows us to
exemplify the strategic merger trends of the subjects resent in the LPT panorama.
Among the strong groupings (defined as being “second level” groupings) there are fusions and stock
exchanges which, in virtue of greater solidity and indefinite duration, presuppose the modification of
the companies involved.
Other more flexible conformations easier to modify are consortiums and temporary company
associations (ATI), considered weak or “first level” groupings, also called “partial integrations/semiintegrations” (Harrigan, 1985).
In particular, ATIs are known to be temporary and occasional collaboration agreements between
companies to carry out a specific activity, whose exclusive purpose is limited to the time necessary to
carry out a specific task, and the diverse participants supply the means and the organizatinal structure.
In the event that an ATI is created to participate in a public selection to win a service contract, the
contributions of each single member are specifically detailed, and although the members remain
legally separate, they formulate a single offer together and undertake to realize it, acting as a single
entity with respect to the outsourcer/contractor.
The consortium, according to art. 2602 of the Italian civil code, is a stable subject, with a duration that
is not conditioned by the realization of a specific project and it produces effects towards third parties,
and not only among the members. Unlike an ATI, is an autonomous subject with respect to its
components, it has boards, a patrimony and takes on its own obligations with respect to the single
members.
Although these two forms of association are based on different logics at times, they both constitute
“interorganizational aggregates where the boundaries between companies become progressively less
distinguishable and permeable and where the relationships between companies become continuous
requiring coordination between the parties that conditions the behaviour of the companies involved.
(Zerbini, 2003) . In fact, the contractual relationships between the companies, in the event of hybrid
agreements like ATI, can result in transactions that take place within a single company between the
companies involved (Holmstrom, 1988).
A further theoretical explanation at the basis of these aggregations is found in Ménard (2005): “the
basic idea is that when investments between partners are specific enough to generate substantial
contractual risks, such as do not justify the weight of integration, and when the uncertainties are
relevant enough that they require greater coordination respect to what is offered by the market, then
the subjects have incentive to chose hybrid types of agreements”.
In the case of local public transport, the specificities of the sector and the peculiarity of the subjects
what operate in it lead to the identification of other reasons why subjects choose ATI rather than
consortiums. The necessity to develop a critical mass able to participate in public selections, the
search for tariff integration, and inclusion in aggregate companies made up of potential competitors,
are the main forces for analyzing the subjects in the sample included in this first category.
The groupings in the sample were divided according to three main variables which facilitate their
inclusion in shared categories, as per the table below.
Figure 1: Sample distribution
variable
DISTRIBUTION
TERRITORY
COMPOSITION
Types of alternatives
SIZE UNIFORMITY
60 million kilometers; Adriatic Transport
Group; AMT and APTV Verona; Consorzio
STIV; SAB and FNM in Como; ATM and
SPT (Como – urbano); Consorzio CAL; SAR
and ACTS Savona; CTPI; FNM and Keolis;
ATB Bergamo and Brescia Trasporti; ATAC
S.p.A.; Siena Mobilità; RAMA Mobilità;
Compagnia Toscana Trasporti; RATP and
ATAF; Adriabus S.c.a.r.l..
INTERNAL TARGET CATCHMENT
AREA
ATC Bologna and ACTF Ferrara; Adriatic
Transport Group; AMT and APTV Verona;
Consorzio STIV; Consorzio CAL; SAR and
ACTS Savona; CTPI; Consorzio Bergamo
Trasporti; ATB Bergamo and Brescia
Trasporti; ATM and SPT (Como – urbano);
ATAC S.p.A.; Siena Mobilità; RAMA
Mobilità; RATP, Rasena and CTT for LFI;
RATP and ATAF; Adriabus S.c.a.r.l.;
Consorzio COTRAP: 60 Milioni di
Chilometri; Consorzio Rasena.
INTERNATIONAL PLAYERS
Retitalia (Transdev); Tevere TPL (Transdev);
SAF Udine (Arriva); SAB Autoservizi
(Arriva); SADEM and SAPAV (Arriva);
SAB and FNM a Como (Arriva); AMT
Genova (Transdev); AGI (Transdev); FNM
and Keolis (Keolis); Consorzio Bergamo
Trasporti (Arriva); RATP, Rasena and CTT
per LFI (RATP); RATP and ATAF (RATP);
RATP and ATCM Modena (RATP).
SATELLITE GROUPING
TP Net; Retitalia; Tevere TPL; ATC
Bologna and ACTF Ferrara; SAF Udine;
ATM, ATB, Brescia Trasporti; SAB
Autoservizi; SADEM and SAPAV; AMT
Genova; AGI (TRANSDEV); Consorzio
Bergamo Trasporti; Consorzio Rasena;
RATP, Rasena and CTT for LFI; RATP
and
ATCM
Modena;
Consorzio
COTRAP.
GEOGRAPHICAL EXPANSION
Tevere TPL; TP Net; Retitalia; SAF
Udine; ATM, ATB, Brescia Trasporti;
SAB Autoservizi; SADEM and SAPAV;
SAB and FNM a Como; AMT Genova;
AGI (Transdev); FNM and Keolis;
Compagnia Toscana Trasporti; RATP
and ATCM Modena.
NATIONAL PLAYERS
ItalianPlayers : TP Net; 60 Milioni di
Chilometri; ATC Bologna e ACTF
Ferrara; Adriatic Transport Group; AMT
and APTV Verona; Consorzio STIV;
ATM, ATB, Brescia Trasporti; ATM and
SPT (Como – urbano); Consorzio CAL;
SAR and ACTS Savona; CTPI; ATB
Bergamo and Brescia Trasporti; ATAC
S.p.A.; Siena Mobilità; Consorzio
Rasena; RAMA Mobilità; Compagnia
Toscana Trasporti; Adriabus S.c.a.r.l.;
Consorzio COTRAP.
The first variable investigates the implications within a merger, deriving from the presence of a larger
player surrounded by smaller companies, which form a “satellite grouping”. Based on the distribution,
the question is what behaviours the leader companies have and how they influence the alliances,
comparing them to complementary merger trends, or groupings characterized by homogeneous
company size.
The territory refers to the strategic aim of the grouping. The “historical” geographical provenance of
the operator is compared with the territory in which the new alliance will operate. Some groupings
aim at maintaining and defending the historical catchment area. Others have been constituted to be
aggressive, or following territorial expansions by at least one of the subjects involved.
The third variable plays a key role in analyzing the general Italian LPT scenario. International groups
which entered the sector when liberalization provided by the new laws was expected to be imminent
strongly changed the scenario. Below we will analyze which alternative strategies were put into effect
by these subjects, waiting for the chance to compete for a public selection for the service contract for
the catchment area of interest.
5. Distribution size and geographical expansion strategies.
Through crossed analysis of the above-mentioned variables, we investigated the correlation between
the territory and the size distribution within the groupings examined. The intention was to identify the
possible link between the strategic aims of various groupings (defensive, focused on maintaining the
historical catchment area, or aggressive, aimed at expanding the territory of operations) and the
composition of the group, in terms of the presence or absence of a leader.
Matrix1: Size distribution and territory
Source: Analysis of sample
Matrix 1 illustrates greatest distribution density in quadrants 1 and 3 with respectively 14 and 10
groupings, underlining the correlation between size homogeneity and defensive strategies, which
contrasts the prevalence of satellite groupings in strategic operations of geographical expansion. In
other words, small and medium sized operators tend to ally themselves with one another only to
maintain their catchment areas, while aggressive behaviours require the presence of a leader
The results depend on the need to form the various types of groupings. The subdivision highlights two
kinds. The first one was made up of small and medium sized operators, which joined together
following changes in regulations (and thus in competition), moving from a sort of monopoly towards
the free market. These groupings followed a protectionist logic, especially in the first calls for
competitive bids, characterized by consortiums of incumbent companies which delegated to the
consortium only the service contract and tariff issues.
If the particular density of the first quadrant is so explained, it is understandable why there are fewer
elements in quadrant 2 (5 elements) and 4 (only 3 groupings). In the same light, geographical
expansion seems difficult to implement in companies of this size. Large operators do not need to
create alliances with smaller ones in order to maintain their territorial exclusivity, since they are
already able to win service contracts on their own.
The elements in quadrant 3 represent the other large sub-group in the sample: it is obvious that large
Italian and international operators, well-established in their catchment areas, have entered into
groupings and alliances only for aggressive purposes, for geographical expansion.
6. Types of groupings in geographical expansion strategies
For a more in-depth analysis groupings can be compared with respect to the territory. Consider
quadrants 1 and 4 of matrix 2, which represent first-level groupings (mainly consortiums).
What has emerged so far confirms that the first level groupings are distributed more frequently in the
first quadrant, confirming the defensive purpose.
Isolated cases are found in the 4th quadrant: consortiums of operators from different geographical
locations (Retitalia, TP Net, Tevere TPL) which are necessarily included in this category, as well as a
consortium with both defensive and aggressive aims (CTT), and an unsuccessful ATI which is an
operational alliance, constituted for a selection for rail transport in the Veneto region.
Matrix 2: Types of groupings and territory
Source: Analysis of sample
Some interesting data emerges. First of all, there is a clear division between the cases of acquisitions
(indicated with an A in the matrix) and cases of mergers between operators (indicated with an
F),which show a clear trend. As recalled in the literature, mergers are sought especially between
operators of contiguous catchment areas. The planned merger between ATB and Brescia Trasporti, if
realized, would have followed those between ATC and ACTF (in Bologna and Ferrara), SAR and
ACTS (in Savona and Albenga). The merger in Rome between Trambus, Met.Ro and ATAC in a
single entity and the operation carried out in Verona, between two companies operating in the urban
and extra-urban areas, are comparable since their intention was to create scope economies in the same
network.
Extending the focus beyond the sample analyzed, in Italy there are many possibilities for groupings
searching for economies dictated by the expansion of contiguous catchment areas3 If it is true that the
greatest returns in terms of efficiency and tariff integration are found in companies which serve urban
and extra-urban areas, it might be a surprise that only 19% of the national LPT operators offer this
mixed service, against the 22 % of exclusively urban operators and the 59% serving only extra-urban
areas.
This immobility is basically linked to two reasons. The first belongs to the companies themselves (be
they public or private). The second involves all of the policymakers in the definition of the catchment
areas to be assigned, characterized by an evident tendency to maintain the status quo, due to specific
interests It is hoped that a greater effort be made to define the standard dimensions of the catchment
areas to be assigned by competitive bids, thus formalizing a great incentive for groupings for smaller
operators.
There is also another consideration to be made. Up to now, small sized operators (who constitute the
absolute majority) have managed to survive in the market thanks to monopolies for smaller sized
catchment areas or single tracts, or thanks to first level groupings, like participating in consortiums
and temporary company associations. The above mentioned regulatory non-homogeneousness is also
an issue in managing these tools. In particular, regional laws regarding public transportation, specify
the requirements for participation in the call for competitive bids, also include minimum levels to be
met by each member company of the grouping. Depending on the region, these levels generally fall
between 10% and 20% of the total number required by the selection announcement. It is clear that, if
the regulatory entities follow the process which seems most likely at present, to broaden the
catchment areas to be assigned by competitive bids, and the regions do not modify their attitudes
regarding this issue of the minimum requirements necessary for consortium and ATI member
companies, small operators will have no choice other than turning en masse to mergers.
Another solution could be allowing operators to remain in the market thanks to subcontracting. Also
in this case, regional laws vary, and so that subcontracting, where permitted, is subject to various
allowable maximum percentages, and to the exclusive carrying out of specific services on the part of
the subcontractor (NOTE 13). The maximum percentages allowed range from 5% to 16% of the total
service being managed. Too small, perhaps, so that each small operator, distributed throughout Italy,
can hope to have a place.
We finish our analysis by looking at quadrant 3, which represents the only strategy used by operators
for expansion, substantiated by the acquisition of shares, partial or total, of the company operating in
the target catchment area. The cause for this is in the normative context and the current low level of
liberalization. When selections favour incumbent companies and refer to uncertain time periods
(NOTE 14), the main operators interested in growth have considered direct acquisition to be the only
possibility.
In particular, the protagonists of these groupings are international players.
Used to competing in more evolved contexts, they can benefit from different dimensions in order to
take advantage of overtly aggressive strategies. To understand the entity of the disproportionate sizes
between these operators and their main domestic competitors, it is sufficient to consider that ATM in
Milan, the largest Italian group, employs 8,900 workers and owns 2,900 vehicles against the 47,000
employees and 20,000 vehicles of Transdev and the 42,300 workers and 15,400 vehicles of Arriva
Group.
Figure 2: Size comparison (Production value) between European players and their main Italian competitors
3
Ministero delle Infrastrutture e dei Trasporti, Conto Nazionale delle Infrastrutture e dei Trasporti, years 2007-2008.
Source: Region of Liguria, 2008.
Matrix 3 investigates the strategies of international operators and the implications in the Italian LPT
panorama4. A first piece of evidence is in the fact that these actors do not generally stipulate first-level
alliances (thus quadrant 4 has few elements). As recalled, the consortiums are joined by operators of
the same size, covering adjacent areas that are well-rooted in the territory, with a defensive aim. In
this context, it is hard for a foreign operator to find a space to attack the market. However, it is
probable that an increase in the density of quadrant 4 will take place when the sector has been
liberalized. The ATI between Ferrovie Nord Milano and Keolis demonstrates that if attractive service
contract selections are held, foreign operators are happy to present themselves in first-level
aggregation, which are more cautious and less expensive.
Matrix 3: Types of groupings and the presence of foreign operators
Source: analysis of sample
The quadrants on the right show the second-level aggregations. There is a clear division between
Italian and international players regarding the strategies employed. Italians, characterized by their
preference for first-level groupings (as seen by the strong density in the first quadrant), confirming
their tendency for defensive alliances whenever they join second-level alliances. Quadrant 2 in this
matrix is almost identical to quadrant 2 in matrix 2, which allows us to confirm that the main mergers
were formed for defensive purposes referred to an internal catchment area. Also aggressive operations
of the second-level were almost completely unknown among the groupings of Italian operators. The
third quadrant highlights how the exclusivity of the acquisitions with the aim of territorial expansion
was of interest to international operators. In this case, a comparison with the same quadrant 2 of
matrix 2 confirms the data.
The reasons for such a clear division depend on many factors. An initial interpretation is that foreign
operators have only recently come on the scene in Italy. They haven’t established themselves in the
territory, and haven’t integrated with operators in adjacent territories, which is necessary or at least
4
Mostly the French Companies Transdev and RAAP and English Arriva.
appreciated in order to participate in certain types of consortiums, especially defensive ones. The
alternative for international players who want to create alliances is in participating in selections as
members of ATI groupings, together with operators already present in the territory. This strategy,
however, presents disadvantages and a few unknowns. First of all, the times and expansion strategies
are conditioned by decisions taken by the Provinces and the Regions, the dimensions of selections and
competitions and the timeframe they are concluded in. Between the proclamation, the temporary
charging, eventual recourses, the pronouncements of regional tribunals and reassignments, the time
necessary can be lengthened, causing problems in strategic planning due to the necessity of waiting
for years to know the result of investment plans.
If these are the reasons why foreign operators might shun appealing the results of public selections,
other circumstances cause them to prefer alternatives. Acquiring shares is motivated by two
circumstances, which both stem from the main foreign players. On the one hand, they need to
penetrate the market urgently, since liberalization is always more and more imminent. Assuring
themselves strongholds, through which they can play a predominant role, starting from the
participation in selections as operators already present within the territory, is an essential objective for
whoever aims at expansion in the Italian market. External growth, with the acquisition of companies
already operating in the market or shares in them, is the most direct manner for reaching this objective
(Conca, 2001; Perrini e Russo 2003). In the second place, the condition that allows these operators to
perpetrate this type of aggressive, rapid, effective and expensive strategy lies in the dimensional
disproportion between these subjects if compared to Italian operators: cash available and the financial
solidity allows them to carry out operations which many Italian operators are unable to sustain, since
they are just barely trying to get the break even.
7. Conclusions
To conclude, with the acknowledgement that the analysis carried out is merely descriptive and needs
to be extended and investigated in more depth, it is possible to highlight how the current trend
towards concentration in the LPT sector depends on the evolution of regulations and in the
liberalization, still as yet to be fully implemented.
This paper aimed at investigating a situation in development, begun due to the process of change, still
far from completion. The LPT sector, immobile due to its fragmentation until very recently, is today
the arena for lively aggregation. Considering the historical immobility of the sector (both public and
private), determined to maintain the status quo, the main culprit of the lack of modernization is the
regulatory framework, too permissive, although formulated according to proper principles.
The uncertainty which characterizes this transition phase has had strong implications in the strategies
put into effect by the operators. Despite uncertainty regarding the modalities and the effective
timeframe of the changes, they have nonetheless understood the basic message: what was in the past a
closed market, will soon cease to be so and the monopolies guaranteed previously by direct
concessions will be subject to regulated competition. This started off the (timid) grouping movements
configured in different ways depending on the different categories of main actors.
While small and medium sized operators formed consortiums to defend their territories, and large
operators planned expansion, international groups entered the Italian scene. Initially convinced that
they could compete equally in a liberalized market, they soon changed strategies, acquiring companies
operating in profitable catchment areas.
The implementation of a competition system for the assignment of service contracts is a point that
cannot be left aside in improving service as well as the creation of conditions for competition to take
place. The small size of operators in the sector, together with legal binds regarding the minimum
requirements for groupings, risk undermining the presence of foreign subjects in the market.
Incentives for aggregation processes, between operators in adjacent catchment areas, have been
stimulated by empirical analyses of the main studies on the theme. They have demonstrated that on
average, operators are below the minimum efficient size, and latent scale and scope economies can be
put into effect only in sufficiently large networks.
The relative newness of the regulations means that a few important issues, like the possibility of
standardizing catchment areas, still need to be resolved, entrusting them to planning by local policy
makers. This uncertainty conditions operators who, scarcely motivated and oriented by the
regulations, either implement size expansion strategies (internal rather than external) creating
defensive alliances, or (in the worst of cases) wait in complete immobility.
While local authorities, owners of the operators, appear to have acted each in his own way, in a few
cases encouraging and in other cases trying to put off the new structure, the more or less strict
legislation, has given life to many configurations in regional and local environments. Public
administrations, strengthened by the possibility to extend in-house assignments, have at times taken
advantage of the regulatory instability to perpetrate policies aimed at reaching the goals closest to
their needs. .
In a context of high fragmentation, in fact, the lowest productivity level in Europe, associated with
inefficient management models means that, on average, Italian operators are smaller in terms of
capital, finance, vehicles and assets available. This leaves little space for significant autonomous
growth, after guaranteeing the self-sufficiency of the company itselfThe result is that the most frequent groupings are defensive, especially if members are companies of
the same size and there is no dominant subject..
There are also a few cases of offensive strategies conducted by the main national operators who seem
to have understood the need for growth in order not to become prey to others in turn.
Large international groups have made their entrance on the scene. Formed in contexts which preceded
the implementation of the reform on the European level, they can benefit from disproportional
dimensions if compared to the average Italian companies. In just a few years they have occupied
relevant positions within the sector. It is from these subjects, more than any other, that Italian
operators, company owners and workers’ representatives seem to protect themselves, fearing to “fall
into the hands of strangers”, and do not have tranquil confidence in the opening of the market.
The sector sees the presence of companies whose owners, appealing to the not-yet ripe time for an
indiscriminate opening of the Italian market, do their best to delay the changes. Other operators think
up ways that their aggregation strategies can grow and change from potential prey to predator. Still
other companies, prevalently public ones, have welcomed shareholders upon the entry of foreign
capital, creating mixed companies.
This third group probably represents the most serious threat for the (few) large Italian LPT operators,
who risk being surrounded by international groups.
From here, the need to establish solid networks between operators in adjacent catchment areas or,
having consolidated the in-house position, and created alliances, to counterattack with geographical
expansions beyond national borders, in order to gather opportunities left empty within the large
common market of Europe.
APPENDIX A – GROUPING LEVELS
Date
‘90
Level
First
Operators
Consorzio Autoservizi Lombardi
CAL
Re
‘90
First
Consorzio Trasporti Pubblici Insubria
CTPI
‘90
First
Consorzio Bergamo Trasporti
Consorzio Bergamo Trasporti
2000
First
Tevere TPL: SITA; APM Perugia; COTRI.
Tevere TPL
2001
First
TP NET: Trambus Roma; ATC Bologna;
ATAF Firenze; CTM Cagliari; CSTP
Salerno; SASA Bolzano.
TP Net
2002
First
RETITALIA: GTT Torino; APM Perugia;
ACTV Venezia; ACTM Modena; Transdev.
Retitalia
2002
First
60 MC
2002
First
60 MC: ATC La Spezia; ATP Genova;
TEMPI Piacenza; APAM Mantova; ORFEO
Reggio Emilia
Consorzio Rasena: ATAF Firenze; ATM
Piombino; ATAM, Florentia Bus, e LFI
Arezzo; RAMA Grosseto; TRAIN Siena.
2002
Secondo
RATP, Consorzio RASENA e Consorzio
Toscana Trasporti.
RATP, RASENA e CTT per LFI.
2002
Secondo
Arriva Group, SAB Autoservizi.
SAB Autoservizi
2003
First
COTRAP
COTRAP
2004
First
Siena Mobilità: TRAIN Siena; LFI Arezzo;
SITA; RAMA Grosseto; ByBus.
Siena Mobilità
2004
First
Ferrovie Nord Milano e Keolis.
FNM e Keolis
2004
Secondo
SAB (Arriva), SAF Udine.
SAF Udine
2004
Secondo
Transdev, Autoguidovie Italiane e AMT
Genova
AMT Genova
2005
First
Compagnia Toscana Trasporti: ATL
Livorno, CLAP Lucca, CPT Pisa, COPIT
Pistoia, CAP Prato, F.lli Lazzi Firenze.
CTT
2005
First
RAMA Mobilità: RAMA Grosseto; ATM
Piombino; TRAIN Siena.
RAMA Mobilità
2005
First
Adriatic Transport Group: Tram Servizi
Rimini; E-Bus Cesena; Setram Forlì; ATM
Ravenna.
Adriatic Transport Group
Consorzio Rasena
2005
First
ATM Milano e SPT Como.
ATM e SPT (Como – Urbano)
2005
Second
SAB (Arriva), SADEM, SAPAV.
SADEM e SAPAV
2005
Second
Transdev e Autoguidovie Italiane.
AGI e Transdev
2006
First
STIV: ACTV Venezia; SITA; APS Padova;
ACTT Treviso; ATVO San Donà; CTM
Castelfranco V.; ATM Vittorio V.
STIV
2006
First
Adriabus
Adriabus
2006
Second
RATP e ATAF
RATP e ATAF
2007
Second
SAB, FNM, SPT Linea Como
SAB e FNM a Como
2007
Second
AMT e APTV Verona
AMT e APTV Verona
2008
Second
ATM, ATB, Brescia Trasporti
2008
Second
ATM Milano, ATB Bergamo e Brescia
Trasporti.
ATB Bergamo e Brescia Trasporti
2009
Second
RATP, CTT, ATCM Modena
RATP e ATCM Modena
2009
Second
ATC Bologna e ACTF Ferrara
ATC e ACTF Bologna
2009
Second
SAR e ACTS Savona
SAR e ACTS Savona
2010
Second
ATAC, Trambus e Met.Ro.
ATAC
ATB e Brescia Trasporti
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