Local gas distribution could go back into the hands of public monopolists, making the recent and growing demands for market liberalization useless. This possibility could materialize quickly if the number of tender areas will remain limited to the 177 imposed by the decree of 19 January 2011. This is what emerges from the analysis elaborated by Carlo Stagnaro, director of research and studies of the Bruno Leoni institute, in the briefing paper " local gas distribution: if mergers kill competition”.
According to the study, to remove pockets of inefficiency a rigid selection and not a consolidation of the players involved within a correct and adequate incentive system is necessary. The current market configuration “in a context of large areas, is such as to make only a small minority of areas contestable, which already today have a private manager, while protecting the position of large vertically integrated public entities. in the absence of corrective measures, the reform of the areas with their reduction to the relatively small number of 177 risks having unintentionally anti-competitive consequences. A redesign of the areas or the possibility of 'opting out' for the municipalities can avoid this involution ".
The basic thesis deduced from the dossier is that the oversizing of the market can generate an economic-financial barrier to entry that is not justified by the potential benefits associated with economies of scale. Private individuals are also penalized by the way in which the tenders are carried out and by the criteria adopted, in particular in relation to the determination of the concession fee. Consequently “ “the attempt to rationalize the sector by reducing its fragmentation runs the risk of missing the objective because in fact it eliminates an important degree of organizational freedom and therefore of company efficiency – i.e. the incentive of each company to find its “optimum size "on the basis of the concrete conditions in which it operates, which include both completely independent variables (geography) and regulatory variables (technical and quality obligations)".
