Rome’s transportation crisis: an overview ahead of the referendum

By Carlo Epifanio and Cosima Malandrino

With almost 3 million inhabitants, the Metropolitan City of Rome holds the first place as far as the use of private transportation is concerned among the biggest cities in Europe. Second only to London in extension in the old continent, Rome expands over 1284 km² with a stunning 50% of modal share for car transportation, suffering from high traffic congestion and pollution. The crisis of public transportation is evident when looking at these numbers. With an inefficient service, a chaotic governance model, and continuous scandals, Rome’s unresolved transportation crisis forged a city of social fragmentation, environmental degrade, and economic stagnation. Today, Rome lags far behind its European counterparts in the implementation of a sustainable urban agenda, where mobility policies play a fundamental role.

To face these systemic inefficiencies, the Radical Party has registered the petition to call for a popular consultative referendum, which will take place on November 11. The two main items to be voted on with a YES or NO are namely whether the public transport in Rome should be organized after a public tender where both private and public actors can participate, and if the city administration should promote competition in providing the service.

Highlighting the social, economic and environmental risks deriving from an outdated, inefficient and unsustainable transportation system, we propose a humble and non-exhaustive interpretation of the Referendum questions, providing the reader with some explications on why to vote against, or for the liberalization. Let us first start with an analysis of the transportation system and the history of its regulation.

 

  1. Fragmentation, Inefficiency, and Governance Crisis: the state of transportation services in Rome, Italy

The questions of governance, political stability, and availability of resources are key factors in the development of a functioning transportation network. When it comes to such factors, the City of Rome has experienced 20 years of bad management, waste of resources, and unstable governance.

The “Agenzia Trasporti Autoferrotranviari Comune Roma” (ATAC), recently declared bankrupt, plays a central role in the public local transportation system of the City as it manages, overlooks and plans the transportation services. During the process of transformation of the transportation services in 2010, the City introduced two new actors: the “Agenzia Roma Servizi per la Mobilità S.r.l.” (Mobility Agency), in charge of managing and planning sustainable mobility services, and “Patrimonio S.r.l” created to manage investment processes. Before such a division, the transportation companies have witnessed many transformations. The year 2000 saw the introduction of two entities, Trambus and Met.Ro, which respectively managed the tram system and the underground system, with Atac acting as an overarching supervising institution. Moreover, for the first time, the peripheral lines were contracted to a private company, Tevere Tpl (now Roma Tpl). However, such an arrangement proved to be nonfunctional and the three entities registered losses. The 2010 reform mentioned above was introduced by center-right Mayor Alemanno who decided to re-incorporate all of the different entities and their respective deficits back into ATAC.

It is during the Alemanno administration that the famous “Parentopoli” scandal comes to the surface. Corruption scandals, mismanagement and continuous changes in the governance model brought about the crisis of Atac and its bankruptcy; we argue that these factors and a constant transformation of the system in term of players, roles, regulations, and relations produced the suboptimal infrastructural investment that led to the inefficient situation we find ourselves in today.

Moreover, this political crisis revealed the financial origins of such a failure: while Atac receives 556 millions of euros of subsidies by the City of Rome every year, it spends an equal amount of money to pay its employees (12 thousand people) and it cashes in only half of this cost from ticket fees. On top of this, Atac is supposed to invest in maintenance and renewal costs. The result is a debt of 1.3 billion euros accumulated in the last 15 years.

Having mentioned the governance and clientelism issues of the public transportation system, the mobility behavior and modal shares of Rome’s inhabitants come as no surprise. The governance crisis has resulted in a malfunctioning and fragmented transportation offer, which in turn produces unsustainable outcomes when it comes to the mobility behaviors of Rome’s citizens. With almost 3 million inhabitants, the Metropolitan City of Rome holds the first place as far as the use of private transportation is concerned among the biggest cities in Europe, with a stunning 50 % of modal share for car transportation, that contributes to the severe problem of congestion. As the picture below shows, the modal shares have only slightly changed between 2009 and 2015. Car and scooters represent the preferred modes of transportation, with 840 vehicles every 1000 inhabitants and around 500 000 motorcycles.

Data from the Mobility Agency of Rome. Comparison between modal shares in 2009, 2012 and 2015:https://romamobilita.it/sites/default/files/studi%20ed%20indagini/status/09_confronti_2009_2012_2015.pdf

The use of private modes of transportation has an evident impact on the environment. Legambiente data show Rome and other Italian cities in the top 5 of European city for the highest number of particles (pm10 and pm2,5) released in the air. The health risks for such transportation behavior are therefore enormous.

Moreover, if time spent commuting is calculated as a cost, Rome’s transportation failures result in important economic hindrances. Indeed, the City of Rome only operates 3 metro lines that poorly cover the great city extension. The resulting public transportation system is mainly made up of bus lines, trams, and regional trains. Rome’s inhabitant’s average commute is 79 minutes long. In Paris, it is 64 minutes long. With high traffic and congestion, bus lines are not a reliable form of transportation. Moovit calculates that people wait 20 minutes on average at bus stops and metro stations in Rome, compared to a wait of 12 minutes in Paris and 13 minutes in London. These statistics all highlight the problematic reality of Rome’s transportation system today. While a reliance on private forms of transportation produces environmental and health risks, the inefficiency of the public transportation network also produces a divided city that fails to benefit from a more integrated and time effective mobility.

  1. How to make public transportation more efficient? What governance model to implement for Rome’s urban mobility?

These questions are at the origin of the consultative referendum scheduled to take place on November 11. On the one hand, the Radical Party – organized in the “Mobilitiamo Roma” committee, gathered the signatures to raise a public referendum pushing for a liberalization of the public transportation system. On the other hand, both Rome’s M5S government and some citizens committees like “Mejo de NO” argue that liberalization should not be seen as the ultimate solution to an infrastructural problem like that of the City of Rome.

Certainly, a crucial element to augment the efficiency of the system is a better coordination between the mobility provider and contractor, that is the city administration. Specifically, the referendum expresses the necessity to govern a company which, being ‘too big to fail’ has been managed irresponsibly in the last two decades relying on public money to refund its enormous debt.

After the company declared bankrupt, the city administration defined a plan to freeze the debt and make Atac reflourish through an economic reentry plan, which according to the current estimates would need at least 20 years to succeed. Should the NO win the referendum, the new plan that poses new measures to contrast fare evasion and new investment at its center would be the main road to follow, mayor Raggi said.

In the past weeks, we interviewed some representatives of the two sides, one from the “Mejo de NO” committee, and one from “Mobilitiamo Roma”. Based on their positions, and on our own background research on the topic, we hereby present and analyze the main points from their two opposing arguments. The two sides are presented firstly, by pointing the way they approach the issue of mobility, then by expressing their proposed solution.

 

How the “Mobilitiamo Roma” frames the issue

Framing the problem:

-Governance inefficiency and lack of monitoring over the service provider created the current situation. Contracts for mobility provision and maintenance exist without being respected in their more essential contractual agreements.

-The public monopoly in Rome does not create conditions and incentives for the service to be rendered efficiently to citizens. The economic losses have been systematically refunded with public money without an actual system of sanctions.

-Being dependent on one entity, Atac, the city has no contractual power to enforce an efficient provision. It is too late, Atac cannot be saved because the debt is too high. Paying off the debt would limit investments in future years.

-Liberalization doesn’t mean privatization. Opening for a call for tenders is required by the law and it allows the system and the actors involved to be more efficient thanks to competition. It is important to overcome the monopoly.

Framing a solution

-Liberalization doesn’t mean privatization, but a new economic approach. It would assign the provision to the market in a competitive framework where the provider offering the best deal would operate. A public actor like ATM or Ferrovie Dello Stato might win the bid in what would become a sort of Public-public Partnership (PUP).

-The referendum would allow a new relationship between contractor and provider: externalizing the management of the service. The city administration would maintain the property, the ability to programme lines and service expansion, and fare tariffs while exercising a role of supervision on the concessionaire. The workers would be reintegrated by the new operator.

-Increase in accountability, separating ownership and management would contribute to a system where incentives and sanctions can be set according to standard provision achievements. This would downsize the risk of a company blackmailing the city administration, a new contractual equilibrium would then be reached.

 

How the “Mejodeno” committee frames the issue

Framing the problem:

-The cause of transport inefficiency has to be found within the infrastructural network. Thus, changing the way service is entrusted does not tackle the roots of the problem. Rome suffers from a lack of infrastructural investment and any service provider, be it public or private, will never be able to set up a satisfactory transportation service without a reform and an upgrade in the infrastructures.

– Today, around 30% of the lines has already been liberalized. The liberalized TPL quota is an evidence of how liberalization does not make the service more efficient and accountable. Workers of TPL have experienced delays in payments and the management of the service continues to be inefficient. Why? Because the problem is the infrastructure, not the service provider.

-The problem relies on a disproportion of surface bus lines and iron lines. The Mobility provision in Rome relies on economy of scale principle, the bigger the network the more efficient until a threshold that has not to be overcome. A network that is too big means diseconomy of scale and economic losses. On the one hand Rome has a disproportionate bus system generating lost and low performances, whereas, on the other hand, the scarcity of Tram and Metro lines doesn’t express the full economic potential performance.

Framing a solution:

-Adapting the infrastructural network to European standard by following the already existing Master Plan, “Piano regolatore per il traffico urbano” (PGTU), through the development of iron lines, what is called “cura del ferro”.

-There is a framing misconception done by the Radical Party, demonizing the public sector and depicting the private option as the most efficient solution for public service delivery. Keeping an in-house management, that is, a concession of the service to a public company owned by the City, the City of Rome can fully control the public transportation system, and thus better invest in the infrastructure.   users and citizens to keep the City accountable. With a private concessionaire, this accountability becomes much weaker.

-In-house management is the model used by most cities in Europe. As such, it shouldn’t be considered as the cause of the failure of Rome’s transportation service, but it should be reformed and improved based on the lessons learned from the years of bad management and lack of investments.

 

Conclusion

This short article presents some of the issues at stake when it comes to the provision of a public service like public transportation. Moreover, it gives an overview of the transportation crisis suffered by the City of Rome in recent years.

Due to the limited space and to limited time, the aim of this article was not to provide a state of the art overview on the issue of transportation governance and regulation, nor to give any best practice or ultimate solution to Rome’s transport crisis. We rather hoped to shine some light on the Roman case and report the positions of the main stakeholders in the referendum of November 11.   

As previously mentioned, a malfunctioning urban mobility network has a negative impact on both the environment and economic prosperity of the City, as well as the health of Rome’s inhabitants. In today’s global metropolises, mass public transportation as well as alternative transportation solutions are fundamental to overcome the congestion and pollution problems caused by private means of transportation like cars and scooters.  

The Roman example shows the ‘tragedy’ of a not respected regulatory framework in the provision of a networked service such as transportation. The interconnectivity of the mobility system within the city functioning has a potential cascade effects and repercussions on the entire society in case of crisis. It becomes then useful to think of urban mobility in a more relational way with the other realms of the city organism. An integrated and multidisciplinary governance approach to urban mobility is essential in order to create a network that connects people, overcomes urban segregation and boosts economic development in all of the Roman neighborhoods.  

It is important to note, that in the case of public utility provision there is no “one size fits all” solution to regulatory and governance schemes. Contextual factors, such as the specificities of people’s commutes, geographical features like Rome’s great extension, and political and economical peculiarities of the city matter. Whether the referendum will express a Yes or No to liberalize the market, the future development of the transportation system has to cope with these contextual factors to become a virtuous example.

 

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