SCHOOL BUS SERVICE (Conclusion of the investigation)
The Italian Competition Authority concluded its proceeding initiated last March against certain private transport companies, who operate within the Municipality of Rome, and ascertained the existence of restrictive agreements in violation of the prohibition under Section 2 of Law. no. 287/90. In view of the seriousness of these violations, the Authority ordered the parties involved to pay administrative fines.
The Authority ruled that the agreement among the three consortia Cipar, Ciat, Rossi Autoservizi and Corsi & Pampanelli reduced competition, since it was aimed at coordinating parties' behaviour, in particular through the boycotting by the transport companies of the tenders organized by the Municipality of Rome and the absence of competing bids during the assignment of the lots by means of private negotiation.
Furthermore, the Authority found the regional section's conduct of the professional association Enat Lazio to be in violation of Section 2 of Law no. 287/90, on the basis of the fact that it consisted in elaborating and giving indications of costs and tariffs to the associates, so as to coordinate companies' behaviour.
Considering the seriousness of the infringements, the Authority imposed on the parties involved administrative fines, which are different in proportion to the role effectively played by each party in the agreement. The Authority ordered Cipar, who led the agreement, to pay a fine equal to 2% of the consortium's total sales, for an amount of 226 million lire (it is to be noted that Cipar's President chairs also Enat Lazio). Further, the order required the other parties to pay the following amounts: Ciat consortium 52 million lire, Rossi Autoservizi consortium 9 million lire and Corsi & Pampanelli 9 million lire, equal to 1% of their respective total sales.
Therefore, under the Authority's decision:
a) the consortia Cipar, Ciat, Rossi Autoservizi and Corsi & Pampanelli are required to cease in the future any exchange of information about costs and prices of the service, and to avoid arranging in advance common policies dealing with participation in tenders, in particular regarding bids level and market sharing, in order to restore competitive conditions in the market of school transport service within the Municipality of Rome;
b) Enat Lazio will have to cease immediately and definitively giving any kind of indication of costs and prices about the school transport service to its associates and, in general, to companies operating in the same sector.
The Municipality of Rome, on the basis of a previous Authority's advisory opinion, arranged three subsequent tenders, in the summer and fall 1995, for the assignment of 35 out of 40 lots which the school transport service for the school year 1995-1996 was divided in, by fixing in the first tender an initial asking price lower by 10% than the minimum tariff as established by the Regional Law no. 73/89.
The initial price asked for in the other two tenders was equal to the minimum tariffs provided for by a subsequent Regional tariff list.
Only three of the 35 lots were assigned via the first tender, while the other two tenders dealing with the 32 lots left were boycotted by most of the transport companies. Considering the unsuccessful tenders, the Municipality of Rome, who is responsible for ensuring the school transport service, decided to contract the service via private negotiation, by terms subsequently postponed, to the companies which adjudicated the service already in the years 1993-1995.
The Municipality of Rome is responsible for ensuring the continuation of the school transport service
which is deemed essential for enjoying the right to study. As such, it is to be noted that, after the unsuccessful tenders, the private negotiations occurred in very particular circumstances, given that the Municipality of Rome had to supply the service, in any case and shortly, at the beginning of the school year. This means that the Municipality of Rome was able to select only a limited number of bids, especially with regards to winning prices.
A comparison among the data supplied by various Municipalities shows the greatest onerousness of the service performed in Rome. This figure is confirmed by taking into consideration both the average tariff per kilometre and the annual average tariff of the service per student. The average winning tariff of the return service within the Municipality of Rome is particularly high, even if it is accepted the restrictive supposition that the afternoon service is not supplied in none of the Municipalities.
Indeed, the average tariff applied within the Municipality of Rome is only lower than the tariff applied in Palermo. Further, it emerges that in Palermo the average cost per transported passenger is lower than the cost incurred by the Municipality of Rome.
The relative greatest onerousness of the service performed within the Municipality of Rome seems particularly evident if we use the more significant indicator, that is the daily average tariff per bus.
Table 1- Comparison among price indicators within various Municipalities - 1995/1996
| Municipality | Average tariff per Kilometre | Average tariff per passenger | Average tariff per bus | Average winning tariff of the return service |
| Bari | 4,063 | 416,647 | 250,364 | 99,500 |
| Catania | 3,367 | 564,768 | 185,779 | 229,000 |
| Genova* | 5,403 | 1,536,643 | 152,761 | 333,000 |
| Firenze | 1,366 | 912,072 | 204,000 | 240,000 |
| Palermo | n. a. | 1,209,367 | 325,818 | 400,000 |
| Roma | 21,079 | 1,498,394 | 415,841 | 396,400 |
| Torino* | 3,998 | 1,140,866 | 179,116 | 263,124 |
Source: Data supplied by the Municipalities.
*The figures regarding the Municipalities of Torino and Genova have been processed, taking into account that the special services designed for disabled people are not to be included in the relevant market subject of this proceeding.
As Table 2 shows, the tariff paid by the Municipality via private negotiation was by 12% higher, on the average, than the initial asking prices and the tariffs applied in the previous period. This variation is appreciably higher if the analysis is focused on the parties involved in the proceeding, which obtained tariffs higher, on the average, by 19,5% than the tariffs previously assigned.
Table 2 - Effects of the operators' conduct on the tariffs for the school bus service within the Municipality of Rome for the school year 1995-1996.
| Company | Average price 1993-95 | Average price in December 1995 | 1995 percentual price variation out of 1993-1995 |
| CIPAR | 357,549 | 425,509 | 19 |
| CIAT | 371,114 | 430,127 | 16 |
| ROSSI | 359,398 | 430,056 | 20 |
| C&P | 338,153 | 415,816 | 23 |
| CAAP | 351,281 | 333,181 | -5 |
| CTT | 343,924 | 334,318 | -3 |
| COTRAL | - | 341,692 | - |
| MEDIA | 353,570 | 387,243 | 12 |
Source: Data supplied by the Municipality of Rome.
