A research project supported by the European Commission fp5: Energy, Environment and Sustainable Development



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A research project supported by the European Commission



FP5: Energy, Environment and Sustainable Development
Key Action 4: City of Tomorrow and Cultural Heritage
Thematic Priority 4.1.2: Improving the quality of urban life
Contract No: EVK4-2002-0095


www.watertime.org
watertime@watertime.org






D33: WaterTime case study - Milan, Italy

Emanuele Lobina,

Senior Research Fellow, PSIRU, Business School, University of Greenwich (e.lobina@gre.ac.uk)
and
Vania Paccagnan,

Junior Researcher, IEFE, Bocconi University, Milan, Italy (vania.paccagnan@uni-bocconi.it)


4th March 2005


One of 29 WaterTime case studies on decision-making on water systems


Watertime case studies

Estonia:

Tallinn

Finland:

Tampere, Hämeenlinna

France:

Grenoble

Germany:

Berlin, Munich

Hungary:

Budapest, Debrecen, Szeged

Italy:

Arezzo, Bologna, Milan, Rome

Lithuania:

Kaunas, Vilnius

Netherlands:

Rotterdam

Poland:

Gdansk, Lodz, Warsaw

Romania:

Bucharest, Timisoara

Spain:

Cordoba, Madrid, Palma de Mallorca, Gran Canaria

Sweden:

Stockholm

UK:

Cardiff, Edinburgh, Leeds








www.watertime.net


Table of Contents

D33: WaterTime case study - Milan, Italy 1

Acknowledgements 3



1 Introduction 4

2 City background 4

3 Water and wastewater undertaking 4

3.1 Background 4

3.2 Water and wastewater undertaking profile 4

3.3 System profile 5

3.4 Region profile 7

3.5 Performance indicators 7



4 Actors in water and wastewater services provision and production 7

5 Episodes 7

5.1 Decision to award BOT contracts for the wastewater treatment plants 7

5.2 Decision to award a short-term water supply and sewerage concession to a municipally-owned PLC: 1994 to 2004 12

6 Participation and Sustainability in Decision-making 16

6.1 Participation 16

6.2 Sustainability 18

7 City in Time 21

8 Conclusions and discussion of findings 22

9 References 23

Notes 23




Acknowledgements

The authors wish to acknowledge the financial support of the European Commission. We would also like to thank the following for making the time to be interviewed and providing documents and other material:




  • Gianni Barbacetto, Diario

  • Natale Carapellese, Regional coordinator, FNLE-CGIL Lombardia

  • Beatrice Dolfi, Segreteria Tecnica, ATO Città di Milano

  • Valter Molinaro, Milan city councillor and member of Democratici di Sinistra (DS)

  • Claudio Portugalli, Rete Lilliput and Comitato Acqua Milano

  • Giuseppe Raimondi, Director, Settore Ambiente ed Energia, Municipality of Milan

  • Basilio Rizzo, Milan city councillor and member of Miracolo a Milano

  • Bruno Rognoni, Director, Servizio Idrico Integrato, Metropolitana Milanese (MM)

  • Roberto Recchia, Segreteria Tecnica, ATO Città di Milano

Unless otherwise stated, the views expressed in this report are those of the leading author and do not necessarily reflect the views of the European Commission, nor any of the listed stakeholders.



1Introduction


Watertime is based on 29 case studies. These case studies are expected to provide information on the interaction between a range of PESTE factors, at various levels, and the parties and processes involved in decision-making, including the constraints on decisions and objectives of decision-makers, so that models can be developed of these interactions to guide future decision-makers.
Milan presents a number of singularities in respect of the other three Italian case studies and, more broadly, within the context of the Italian water industry. Firstly, Milan is the only Italian commune which constitutes an ATO on its own. That implies that, unlike in the cases of Arezzo, Bologna or Rome, urban water consumers in Milan will not be cross-subsidising consumers in less populated neighbouring areas. Secondly, Milan is the only European metropolis that has remained without any wastewater treatment plant until very recently and has been the object of an infringement procedure by the EU Commission on those grounds. The fact that the EU Commission has not imposed a pecuniary sanction might be explained with the fact that, after decades, a decision was eventually taken to award two BOT contracts to two private consortia. This process has been not only difficult but also highly controversial, characterised by investigations over bribery, lack of transparency and restricted competition.
As regards water supply, despite being the second largest city in Italy, Milan has had its water supply and sewerage services provided under direct municipal management until 2003. Although the city administration is committed to the privatisation of local public services for ideological and fiscal considerations, water supply and sanitation services were awarded to a 100% municipally-owned PLC, as a way of avoiding having to put the concession out to tender (yet, the water operator might be privatised at a later stage). Although the Galli Law requires the integration of water supply and sanitation services, the past decision to award a BOT contract to a private consortium for the construction and operation of a large wastewater treatment plant might mean that the current water operator will eventually assume operation of all water supply and sanitation services at the expiry of the private concession, with possible problems in terms of coordination between the public and the private operators. In this sense, Milan provides an interesting example of the possible effects of past decisions in terms of path dependency as well as of the consequences of failing to learn from recent history. In fact, lack of transparency surrounding the BOT contracts has remained a cause for concern 18 years ago as in more recent years.




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