Parliament is discussing a bill containing "Provisions on public and participatory management of the integral water cycle" (Pdl AC52, first signatory Hon. Federica Daga, M5S), which prefigures a return to the direct management of the water service by the Municipalities o management through public law entities, the return to the Ministry of the Environment of the regulatory functions, the financing of investments through general taxation (new taxes or new debt).
But according to the research “Pdl Daga. Cost 20 billion: debt or taxes?”, conducted by REF Searches, the cost of these measures is over 20 billion euros, all paid for by public finance. “The bill foreshadows a return to the service funding through general taxation, as it was in the 80s. It is an unsustainable cost for public finances” he commented Donato Berardi, director of the Laboratory on local public services of REF Ricerche. Here is the list of costs, item by item.
Nationalization of the water industry: cost 4-5 billion
In order to "nationalize" water management, it will be necessary to pay the outgoing manager compensation consistent with the value of the investments made and not depreciated, as well as adjustments for past costs that have not yet been recognized in the tariff. Starting from the value of the non-depreciated works carried out by listed companies and public-private partnerships, it is possible to estimate a cost to public finances of around 4-5 billion euro. Where the "nationalization" should take place before the expiry of the concessions, an indemnity would be added to them, according to civil law practice.
Repayment of loans taken out by water companies: cost 10,6 billion euros
The transformation of the water companies into public law entities involves the repayment of the loans taken out by the companies since the existing loans provide for early termination in the event of a change in the corporate nature. The total loans taken out by the water companies that should be repaid amount to 10,6 billion euros.
5 billion a year to finance investments
The investments planned in the two-year period 2018-2019 reach 7 billion euros. Moreover, the recovery of the accumulated delays entails a requirement of at least 5 billion euros a year for the next 20 years.
Free water for all: 2 billion euros a year
The provision under discussion provides for the free supply of 50 liters per capita/day to all residents, with costs borne by general taxation. The burden on public finance is 2 billion euros a year.
Other transition costs
Other "transition costs" can delay the operations of special companies: among these it is useful to list the possibility of a tax dispute, the failure to appoint bodies with a consequent decision-making vacuum, unapproved budgets, inconveniences and reconciliation costs of the work contributions payable to employees in the transition from INPS to INPDAP management. To these should be added the costs of the spin-off of the water company branches in the case of multi-utility companies, with the loss of economies of scope (eg single offices for staff functions).
