Island cabotage liberalizationIsland cabotage liberalizationEvidence from SardiniaEvidence from Sardinia

Sardinia facts and figuresSardinia facts and figures

• Land area:Land area: 24.090 km2

• Resident population:Resident population: 1.665.617 (2007)

• Population density:Population density: 67 inh./km2

• Sardinia is an Autonomous RegionAutonomous Region withspecial statute, currently divided into 8 8 territorial districtsterritorial districts (provinces). A recent referendum reduced the number of districts from 8 to 4.Cagliari is the main city of the Island

• Infrastructural gateways to the mainland:Infrastructural gateways to the mainland:3 airports (6.500.000 passengers in 2009)5 ports (6.000.000 passengers in 2009)

Maritime cabotageMaritime cabotage Legal basisLegal basis

• Council Regulation (EEC) No 3577/92 of 7 December 1992Council Regulation (EEC) No 3577/92 of 7 December 1992 applying the principle of freedom to provide services to maritime transport within Member States (maritime cabotage)

DefinitionDefinition

► Mainland cabotage: the carriage of passengers or goods by sea between ports situated on the mainland or the main territory of one and the same Member State without calls at islands.

► Island cabotage: the carriage of passengers or goods by sea between: - ports situated on the mainland and on one or more of the islands of one and the same Member State, - ports situated on the islands of one and the same Member State;

Island Cabotage – Regional CompetenceIsland Cabotage – Regional Competence

Sardinia – Mainland cabotage: Sardinia – Mainland cabotage: Shared competence

Sardinia – Minor islands cabotage: Sardinia – Minor islands cabotage: Exclusive competence

Sardinia-Mainland cabotageSardinia-Mainland cabotage

5 main harbors:5 main harbors:- CagliariCagliari- ArbataxArbatax- Golfo AranciGolfo Aranci- OlgbiaOlgbia- Porto TorresPorto Torres

Essential services areEssential services areensured only from ensured only from Cagliari and Olbia toCagliari and Olbia toCivitavecchia and fromCivitavecchia and fromPorto Torres to GenovaPorto Torres to Genova

Maritime connections to the mainlandMaritime connections to the mainland

Passengers transport servicePassengers transport service75% of nearly 6 million passengers are transported by private shipping companies;On these routes Tirrenia covers the 25% of the passenger transport market.

94% of traffic is handled at northern ports65% of passengers is currently travelling through the port of Olbia

12,5 million tons of goods carried by about 580.000 trucks are transported by ro-ro ships

60% of goods are shipped by private companies

Most of goods are handled by Northern Ports

Freight maritime transportFreight maritime transport

Sardinia – Minor islands cabotageSardinia – Minor islands cabotageSaint Peter’s Island Saint Peter’s Island ..Carloforte –CalasettaCarloforte – Portovesmenearly 1.000.000 passengers2 shipping companies:SAREMAR-DELCOMAR

La Maddalena’s IslandPalau – La Maddalenanearly 2.500.000 passengers3 shipping companiesSAREMAR –DELCOMAR -ENERMAR

Minor islands – Saint Peter’s IslandMinor islands – Saint Peter’s Island

•Land area: 51 km2•Resident population: 6,480 inh•Population density: 127 inh/km2•Maritime connections to the main Island:

Route Carloforte – PortovesmeRoute Carloforte – Portovesme:: 15 dailycrossings operated by Saremar S.p.A public shipping company

Route Carloforte-CalasettaRoute Carloforte-Calasetta:: 7 dailycrossings operated by Saremar S.p.A public shipping company and 7 nightly crossings operated by Delcomar S.r.l private shipping company.

All services are financed byPublic Service Obligations - PSO

Minor Islands – La Maddalena’s IslandMinor Islands – La Maddalena’s Island•Land area: 50 km2•Resident population: 11.464•Population density: 229 inh/km2•Maritime connections to the main Island:

Route Palau – La Maddalena:21 daily crossings operated Saremar S.p.A public shipping company;36 daily crossings operated by Enermar Srl private shipping company;

6 nightly crossings operated with PSO by Delcomar Srl private shipping company

Sardinian ferry servicesSardinian ferry services

Ferry lines: Ferry lines: aim at ensuring the connection between two or more ports on the basis of a public schedule or through systematic crossings.

Since 1974-75 the service has been regulated by public services agreementspublic services agreements between the Government and Tirrenia Shipping company, including its regional undertakings

2001:2001: EU Decision 1684 states that the aid awarded by Italy to Tirrenia as compensation for providing a public service is compatible with the common market

2004:2004: EU Decision 470 states that the aid awarded by Italy to SAREMAR, SIREMAR, TORREMAR and CAREMAR shipping companies for providing a public service is compatible with the common market.

2008:2008: expiry date of a 20-years agreement. Regulation 3577/92 applicable to Italy’s transport services.

Current Sardinian Maritime Policy guarantees the free competition among European free competition among European shipownersshipowners. A new law to be approved shortly forsees that the Region can impose public service obligation through contract agreements or manage the essential cabotage services through an in-house company in order to ensure the martime territorial continuity.

Maritime services ofMaritime services of major regional interestmajor regional interest► Regulated by a Regional lawRegional law to be approved shortly► Guaranteed by ship-owners under the EU free trade regimeEU free trade regime or by the Region through an in-house companyin-house company► Operated by SAREMAR SpaSAREMAR Spa (Sardegna Regional Marittima) until the expiring of the current public service contract.► 6 months after the enforcement of the new Regional law SAREMAR Spa will be privatized through a public tenderprivatized through a public tender ► The connections currently managed by SAREMAR between the Sardinia Island and the Italian mainland, will be transferred to the Regional in-house company Flotta Sarda Flotta Sarda within 30 days after the entering into force of the new Regional law► ► Monitoring of Sardinian scheduled ferry services: Monitoring of Sardinian scheduled ferry services: a report focusing the state of play has to be approved every year by 30th September together with an Action Plan to be implemented by the shipping company.

Tirrenia shipping companyTirrenia shipping company

Group of State-owned shipping company providing cabotage servicescabotage services through 4 Regional companies: - Caremar Caremar for Campania Region

- SaremarSaremar for Sardinia Region

- Siremar Siremar for Sicily Region

- Toremar- Toremar for Tuscany Region

Tirrenia privatizationTirrenia privatization

1998:1998: beginning of the privatization process

1999:1999: the Ministry of Economy reduced annual subsidies for future contracts and the companies Saremar, Toremar and Caremar were transferred to Regions Sardinia, Tuscany, Campania and Latium.

2008:2008: deadline of service contracts, automatically extended until the end of 2012 without any competitive procedure

2011: 2011: tender awarded to Compagnia Italiana di Navigazione (CIN) initially created as a joint-venture between Tirrenia's main competitors, Grimaldi, Marinvest and Onorato Partecipazioni.

2012:2012: awarding procedure blocked by DG Competition blocked by DG Competition on the basis of the very high, if not monopolistic, combined market shares belonging to the parties to the merger on a number of maritime routes in Italy, and in particular on certain routes to and from Sardinia.

Tirrenia privatizationTirrenia privatization18 January 2012: 18 January 2012: DG Competition opened an in-depth investigation under the EU investigation under the EU Merger RegulationMerger Regulation into the proposed acquisition of a branch of Tirrenia by CIN on the basis of the very high, nearly monopolistic, combined market shares belonging to the parties on a number of maritime routes in Italy, and in particular on certain routes to and from Sardinia.

The proceedings has been closed as the notifying parties have demonstrated to the satisfaction of the Commission that they have abandoned the notified concentration

Italian Antitrust AuthorityItalian Antitrust Authority opened an in-depth investigation on Tirrenia’s acquisition which has been closed on June under strict conditions.

European Commission European Commission opened an infringement procedure against Italy for non implementation of regulation 3577/92. If Italy fails to inform the Commission within two months of the measures taken to ensure full compliance with EU law, the Commission could refer the case to the EU Court of Justice.

Tirrenia privatization process is still pendingstill pending

SAREMAR shipping companySAREMAR shipping companySince 1988 Sardegna Regionale Marittima Sardegna Regionale Marittima Spa (SAREMAR)Spa (SAREMAR) manages the maritime public service between Sardinia, Corsica and the Smaller Islands.

It operates between:- S. Teresa di Gallura and Bonifacio;- La Maddalena and Palau;- Carloforte and Calasetta;

It represents the sole connection between:- Carloforte and Portovesme- Sardinia and Corsica in the 5 winter months.

The service line between Sardinia and the Mainland has been reactivated in January 2012 thorough the connection between Olbia and Civitavecchia

Saremar facts and figuresSaremar facts and figures

FleetFleet:: 7 ferry-ship;

Crew:Crew: 200;

Administrative personnel:Administrative personnel: 14;

Annual crossings:Annual crossings: 16.500;

Passengers:Passengers: 1,5 millions;

Transported Cars:Transported Cars: 390.000

Privatization of Saremar shipping companyPrivatization of Saremar shipping company

Privatization of Saremar shipping companyPrivatization of Saremar shipping company

Public Service contractPublic Service contract• • Up to 12 years’ contracts;Up to 12 years’ contracts;

• • Financed by national resources 13.600.000 €/year + regional resourcesFinanced by national resources 13.600.000 €/year + regional resources

• • daily night-time sailing from and to Sardinia.daily night-time sailing from and to Sardinia.

GoalsGoals• • Direct control over the service by the regional authorityDirect control over the service by the regional authority

• • Assure actual level of serviceAssure actual level of service

• • Maintain actual employment level in order to avoid negative socialMaintain actual employment level in order to avoid negative socialimpactimpact

Public-private partnershipPublic-private partnershipAlthough private operators will be involved in the partnership, Although private operators will be involved in the partnership, decisions need to be driven by public interest.decisions need to be driven by public interest.

• Regional authorities will manage the shipping company together with a community private ship owner selected through a EU wide call for tender;

• PPP selection will be done on a non-discriminatory basis according to principles stated in Article 4 of Regulation (EEC) No 3577/92.

• Private ship owners, considering their own commercial interest, would not be able to provide cabotage service at the following conditions: new and safe vessels, lower rates for resident population, daily night-time sailing in each direction all year round.

Thank you for your attention!Thank you for your attention!