Italy govt split over norms to revoke motorway concessions

The Morandi Bridge before controlled explosions demolished two of its pylons. (Reuters)
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Updated 21 December 2019

Italy govt split over norms to revoke motorway concessions

  • Ruling 5-Star Movement has repeatedly blamed Atlantia for Morandi bridge disaster last year

ROME: Italy’s government failed to agree on Saturday on a law that would make it easier and less costly to revoke concessions to operate motorways, a sign of division among the ruling parties on how to handle the aftermath of a fatal road bridge collapse last year.

A government minister who did not want to be named said after a five-hour Cabinet meeting that the government had provisionally approved a document, but measures still needed to be agreed on before it becomes definitive.

The decree being considered says that state-owned roadway company ANAS will temporarily manage motorways if an operator has its concession revoked, a draft document seen by Reuters shows.

It also considerably reduces the amounts the government must pay to a toll road company if a concession is revoked due to shortcomings on the part of the operator.

The ruling 5-Star Movement has repeatedly blamed Atlantia, a company controlled by the Benetton family, for the disaster caused by the collapse of the Morandi bridge in Genoa last year, in which 43 people were killed. The bridge was operated by Atlantia road unit Autostrade per l’Italia. Atlantia has denied any wrongdoing and said it carried out maintenance of the bridge as required by the contract.

The decree does not mention Atlantia, but a government source told Reuters that the measures could be applied to it.

Prime Minister Giuseppe Conte said this month a decision on whether to revoke Atlantia’s motorway concession would be taken by the end of the year.

The fate of the concession has been a source of disagreement between 5-Star and its center-left allies, the Democratic Party (PD) and Italia Viva (IV).

Sources for the PD party said earlier this month that re-negotiating the concession would present fewer risks for state coffers than revoking the concession and potentially triggering a lengthy legal battle.

The draft decree says that if the concession is revoked due to shortcomings on the part of the operator, the state will have to pay the company only an amount equal to the value of the investments made in the highway network minus any compensation for the damages caused by mismanagement.

Such a scheme would result in a compensation lower than the €15-20 billion calculated by financial analysts on the basis of the current contracts between the government and Atlantia’s Autostrade per l’Italia.

New emissions blow for VW as German court backs damages claims

Updated 26 May 2020

New emissions blow for VW as German court backs damages claims

  • Scandal has already cost firm more than €30 billion; ruling serves as template for about 60,000 cases

KARLSRUHE, Germany: Volkswagen must pay compensation to owners of vehicles with rigged diesel engines in Germany, a court ruled on Monday, dealing a fresh blow to the automaker almost 5 years after its emissions scandal erupted.

The ruling by Germany’s highest court for civil disputes, which will allow owners to return vehicles for a partial refund of the purchase price, serves as a template for about 60,000 lawsuits that are still pending with lower German courts.

Volkswagen admitted in September 2015 to cheating in emissions tests on diesel engines, a scandal which has already cost it more than €30 billion ($33 billion) in regulatory fines and vehicle refits, mostly in the US.

US authorities banned the affected cars after the cheat software was discovered, triggering claims for compensation.

But in Europe vehicles remained on the roads, leading Volkswagen to argue compensation claims there were without merit. European authorities instead forced the company to update its engine control software and fined it for fraud and administrative lapses.

Volkswagen said on Monday it would work urgently with motorists on an agreement that would see them hold on to the vehicles for a one-off compensation payment.

It did not give an estimate of how much the ruling by the German federal court, the Bundesgerichtshof (BGH), might cost it.

Volkswagen shares were 0.5 percent lower. The BGH’s presiding judge had signaled earlier this month he saw grounds for compensation.

Costs mount

“The verdict by the BGH draws a final line. It creates clarity on the BGH’s views on the underlying questions in the diesel proceedings for most of the 60,000 cases still pending,” Volkswagen said.

A lower court in the city of Koblenz had previously ruled the owner of a VW Sharan minivan had suffered pre-meditated damage, entitling him to reimbursement minus a discount for the mileage the motorist had already
benefited from.

The court at the time said he should be awarded €25,600 for the used-car purchase he made for €31,500 in 2014.

“We have in principle confirmed the verdict from the Koblenz upper regional court,” said BGH presiding federal judge Stephan Seiters.

Volkswagen had petitioned for the ruling to be quashed altogether by the higher court, while the plaintiff had appealed to have the deduction removed.

A Volkswagen spokesman said that outside Germany, more than 100,000 claims for damages were still pending, of which 90,000 cases were in Britain.

The carmaker also said it had paid out a total of €750 million to more than 200,000 separate claimants in Germany who had opted against individual claims and instead joined a class action lawsuit brought by a German consumer group.

The carmaker said last month it would set aside a total of 830 million for that deal.

In a separate court, Volkswagen agreed last week to pay €9 million to end proceedings against its chairman and chief executive, who were accused of withholding market-moving information before the emissions scandal came to light.