Tuesday 12 April 2016
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Italy: Mazzoncini and FS challenges – TPL, goods, full mobility, and international expansion

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During an audit at the Transport Commission of the Chamber of Deputies the CEO of FS Italiane Group, Renato Mazzoncini, laid down the guidelines of FS for the near future to Members of Parliament and to all of those that followed the live streaming.

From transport company to mobility company, for modal integration
“We need to convert FS from a railway company to a mobility company: this is a cultural change that is a must. Our railway staff now think about trains, but travellers are whom we have to think about: if we do not get a move on, Ferrovie will have problems. Ferrovie dello Stato – said the top managers – are already the backbone of the country’s mobility. We must become a mobility supplier: if not us, someone else will. I always say that: we must also start to think about selling NTV or Alitalia tickets."

FS, first company in Italy for investment
“In the last 10 years we have done two important things as a group: we have changed trains, from those of the 70s to trains built post-2000, and we have fixed the accounts: this year we will close the financial year with a good profit, especially compared to other European companies.” Even without figures, Mazzoncini highlighted that “it will be a profit with a significant growth” if compared to the positive result of 300 million euros of the previous year. "I would recommend leaving the profit in Ferrovie and investing it in the business plan. It is an important plan that requires funding and the resources generated are important.” Talking about investments, the CEO said that FS “had 4.1 billion euros of investment in 2015; we have a budget of 6.2 billion in 2016, while Enel, the second company in terms of investment, has three billion.” In short, “FS invests twice when compared to the second company for investment.”

By the end of the year, Mercitalia will come to light
“We have lost a lot of money on goods. We have a dozen companies and we are working towards a reorganisation within the year, to create, a new company in which we will put all the existing realities, so that our customers will finally have a single point of contact.”
"We have not yet submitted the business plan”, added the CEO, “but on the first draft of the plan, half a billion euros of investment on freight transport has been planned. About 220 to 230 million will be invested to renew the rolling stock and the same amount for part of the logistics platform."

A network spin-off would mean killing the group
“If the decision is to list Ferrovie dello Stato Italiane on the stock exchange and for the railway network to be given to State property, the direct effect could be a weakening of FS.” The value of the network, said the CEO, is 26 billion, which “are inactive”, but “when we go to the bank to fund major works, they give us very low rates because we have these great assets.” A spin-off of the railway network of Ferrovie dello Stato Italiane Group “would mean killing the group; we could lose the whole know-how. It is one of the most important things that we are discussing with the Ministry. There are different options, we will try to not divide it,” said Mazzoncini again, adding that the business plan that he is developing “will also address this issue, and will answer many questions.” Mazzoncini explained that "the issue has been moved to 2017 and we will take a decision after the business plan. I do not have any kind of ideological preclusion, because according to DPCM, the control remains fully public. I just need to be sure that it is a successful operation and therefore it must be “based on a serious and very strong business plan.”

The single European railway market
“We are in favour of opening European railway spaces. Here in Italy, the competitor space is already occupied by NTV.” Focusing on the ongoing discussions about the Fourth European Railway Package, the CEO does not seem to be worried about the possible arrival of the French and German railways on the Italian high speed market. “We already have Italo. “Sure”, he said, “with all respect, I am mostly worried about competing with French or German railways. We are the only country that has high speed competitors and we have already become stronger."

FSE, ATAC, Trenord
Ferrovie dello Stato Italiane is interested in a possible acquisition of Ferrovie Sud Est. In answer to a question asked by journalists before the beginning of the audit, Mazzoncini replied: “Of course, we are interested in everything related to public transport.”

About the ATAC, the CEO said: “If the question is if I am interested in ATAC, the answer is no. “If the question is if I am interested in road transport in the capital city, the answer is yes. The best would be competition. We are holding a dialogue with the Municipality of Rome, which has a problem with a company with 1.7 billion euros of debt and technically bankrupt: they would be naive not to start any form of exchange. We have to move or foreign companies will," said Mazzoncini, certain that municipal companies, sooner or later, “will be given up” by local authorities. “We are the only party”, he added, “which can also propose a pricing integration.”
With regard to Trenord, according to Maroni, "we opened a dialogue to achieve a reorganisation for the upcoming challenges, the service agreement expires in 2020 and we must face the problem of how to meet them. We suggested that Maroni takes control of Trenord, in order to ensure the investments. The current equal model, from my point of view, has no logic, and it also makes it difficult for Lombardia Region to be the controller.” In answer to a question on the operation times, Mazzoncini replied “I think we can do it even now.”

Interest in Greek railways
FS is interested in the privatisation of Greek railways. "We are participating in data room for the privatisation of Trainose companies”, confirmed Mazzoncini. “At the moment there are three of us, along with China and Russia. It is a very small reality, because it is not related to rail; is an operation that will be worth less than 100 million Euros.” The deadline for submission of expression of interest, which was initially set yesterday, has been postponed to about mid-April.

FS requests from Iran to Sweden
In the railway world “only seven nations have high-speed trains, and Italians and Japanese people have the best systems,” thanks to this skill “we can go around the world.” There are many requests for the Italian railway excellence, "from Iran to Sweden.” Iran represents “a very important opportunity and we are able to do it.” Furthermore, “as operators, we are participating in a competition in the UK, for the London-Edinburgh line, which is very important, where today the service is provided by Virgin of Richard Branson”, explained the CEO. “We are in ATI (Associazione temporanea di impresa) with a strong British company, and we are the only non-British company to have obtained the passport, a license for competition in England. We are very confident. International development is extremely important, if we remain only in Italy we will become a colony little by little.”

(Source: FS Italiane Group)

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