Wanted: Private Money to Bridge Italy's Infrastructure Gap
Johnson, Mark, Global Finance
A new government wants to overhaul Italy's infrastructure. It thinks only the private sector has the cash and expertise to do the job. * By Mark Johnson
Better late than never. Thirty years after it was declared a national priority, a bridge linking the island of Sicily with the southern tip of the Italian mainland may go ahead-but only if the private sector can come up with a viable funding plan for half of the estimated 10 trillion lire ($4.5 billion) cost.
The longstanding plans for a bridge were resuscitated by Italy's center-left government, defeated in mid-May by a center-right coalition under Silvio Berlusconi.The project's long history and the turbulent nature of the Italian political scene mean that few people expect to see digging anytime
But the bridge is in the manifesto of Berlusconi's alliance-which has made reviving Italy's creaking infrastructure one of its priorities.And the fact that even a center-left government was prepared to encourage private -sector participation in such a highly visible project underlines just how attitudes are changing in Italy.
"The formula of a public-private partnership is outside politics," argues Carlo Bucci, managing director of Stretto di Messina, the public company that has run the bridge project until now."It is a necessity for a left-wing government or a right-wing government."
Giulio Tremonti, the likely finance minister in the new government, wants to slash some 70 trillion lire from the country's tax bill. But he knows that Italy is only just on track to meet its budget deficit targets under the European stability pact.
Mario Monti, one of Italy's two European commissioners, has warned that making those saris add up may prove difficult-particularly if politicians wish to deliver the much needed infrastructure upgrades. It's solving that equation that's making public-private partnerships such an attractive proposition and, according to Francesca Angeloni, has project sponsors and financiers buzzing around Italy. …