Atlantia shares slide on concern over Italy motorway concession

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FILE PHOTO: 5-Star Movement leader Luigi di Maio after consultations with Italian President Sergio Mattarella in Rome, Italy, August 22, 2019. REUTERS/Remo Casilli/File Photo

January 2, 2020

MILAN (Reuters) – Doubts over Atlantia’s lucrative motorway concession intensified on Thursday, sending the Italian infrastructure group’s shares down nearly 3% after the leader of the ruling 5-Star Movement added to signs the licence could be revoked.

Controlled by Italy’s Benetton family and in charge of the country’s biggest motorway network, Atlantia has been in the crosshairs since a concrete bridge it operated collapsed in the city of Genoa in August 2018, killing 43 people.

A government decree came into force on Tuesday to limit reimbursements owed by the state for the early termination of a concession agreement if the holder failed to meet contractual obligations.

5-star party leader Luigi Di Maio on Wednesday said the measures would allow the government to strip Atlantia’s motorway business Autostrade per l’Italia of its concession.

“The decree kicks off a process for some of the country’s infrastructure … which will allow us to revoke the Benettons’ concessions,” Di Maio said in a video posted on Facebook.

“I’m not comfortable having these people who failed to maintain (Genoa’s) Morandi bridge running 3,000 km of Italian motorways where families travel every day. We need to take back management (of the network).”

Atlantia has denied any wrongdoing and said it carried out maintenance of the bridge as required by the contract.

Shares in the company were down 2.8% at 1523 GMT against a 1.3% rise for Italy’s blue-chip index <.FTMIB>.

Pressure on Atlantia has intensified after parts of the roof to a highway tunnel operated by Autostrade collapsed near the northern city of Genoa this week, prompting the transport ministry to call an emergency meeting on Tuesday.

After the meeting the ministry said there would be no increase to tariffs on 95% of the country’s motorway network in 2020, further squeezing the country’s toll operators.

Minister Paola De Micheli asked Autostrade to speed up checks on Italy’s outdated motorway network and update the ministry on its progress every 10 days.

Italy’s cabinet is expected to discuss Atlantia’s motorway concession in one of the first meetings of the new year.

The ruling coalition’s PD party has been more cautious on the issue than the 5-Star Movement, adding to tensions between the partners in government.

“Autostrade is one of the mines we need to defuse … it’d be wrong for the coalition to split up on such an important and delicate matter,” PD’s Junior Infrastructure Minister, Salvatore Margiotta, said in a newspaper interview on Thursday.

(Reporting by Valentina Za; Editing by Jan Harvey and David Goodman)

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