Italy to Make Ferrovie ‘More Appetizing’ Pre-IPO, Minister Says

  • Transport Minister Delrio sees privatization in 2017
  • State to invest heavily in goods, local passenger traffic

Italian state investment in freight and local passenger traffic will make Ferrovie dello Stato SpA “much more appetizing” ahead of the railroad company’s privatization expected in 2017, Transport Minister Graziano Delrio said.

Italy is committing billions of euros to developing “European corridors,” Delrio said in an interview in his Rome office. This includes 3 billion euros ($3.4 billion) on a Mediterranean route through Spain, France, Italy, Slovenia and Hungary, 3 billion euros on the Brenner cross-border project in the Alps, and 2.5 billion on a tunnel near Genoa for the Rhine-Alpine route.

“These corridors mean we will move many more people, and much more freight, at high speed,” Delrio said. “We have a big industrial plan to reinforce the presence of Ferrovie on transport of goods and of local passengers. The liberalized Italian sector is a success as far as high speed goes, but it must make big steps forward and big investments on goods and commuters.”

Delrio said this market was 10 to 15 times greater than the high-speed one, because regional transport involved 500 million passengers a year. “This kind of investment will reinforce the company a great deal and make it much more appetizing.”

2017 Credible

Next year is “a credible objective,” for the sale of a stake in Ferrovie, Delrio said. The timing of the sale, originally planned for this year but due to take place after a merger with highway operator Anas, will depend on market conditions and the company’s industrial plan due in September.

He declined to comment on valuation. “There’s a part of Ferrovie which is very productive already today, and that’s Trenitalia. If it reinforces the regional and freight market this year then it becomes a very interesting company,” he said. Trenitalia is the main operating unit of Ferrovie.

Finance Minister Pier Carlo Padoan said last week that the sale of a stake in Ferrovie, part of efforts to reduce Italy’s “huge debt,” would take place within 18 months. The government is also weighing a stake sale of air traffic controller Enav SpA and a further stake sale of Poste Italiane.

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