Urbanities,
Vol. 4
·
No 2
·
November 2014
© 2014
Urbanities
43
addition to legal action, the campaign included exhibitions, conferences, meetings, media
campaigns and the uninterrupted mail-bombing of MPs, cabinet ministers, local
administrators and all those involved in making decisions about water. In particular, to ensure
the respect of the result of the referendums on the adequate return on capital, the Forum and
its experts wanted to make sure that users of water services would be able to calculate the cost
net of the interests on the invested capital.
Interestingly, the Italian government disregarded the will of Italian citizens not only in
respect to the public management of water; after the 2011 referendums, it also proceeded to
allocate the responsibility for decisions on how to set water service fees to what, after some
wrangling, became the ‘Italian Regulatory Authority for Electricity, Gas and Water’.
Confusion increased. On the one hand, the Authority had to deal with fully liberalized goods,
such as gas and electricity; on the other, it had to develop ways to assess the costs and their
fairness, as part of what was essentially a not yet liberalized public water service.
Regarding the regulation of water services, this contradiction is also identified in a
recent judgement made by the Regional Administrative Court of Lombardy on water costs
(Judgement No 779/2014), which emphasizes that the water service is of general financial
interest. While employing its regulatory power, the Electricity, Gas and Water Authority opts
for a view on the ‘cost’ of the capital invested that is in line with mainstream economic
thought. In other words, in order to calculate water costs, the Authority refers to the
economic principles of the prevailing free market theory.
The Situation in Naples
In application of the Galli Law, in 1997 Campania (the Naples Region) was divided into four
ATOs meant to optimize the management of uptake services, feed, sewage, drainage and
removal of wastewater with the aim of saving water, thus avoiding waste and reducing
management costs. The Naples and Caserta provinces (and their 136 municipalities) were in
the same ATO.
11
In November 2004, the ATO’s Board decreed to privatise partially the water
management service for more than three million people,
12
provoking the immediate reaction
of the Civic Committees for the Defence of Water (an important part of the national Forum),
led by a priest, father Alex Zanotelli. At first, the protesters were few. Gradually the
opposition to the privatization of water management involved increasingly large parts of the
so-called civil society. There were many demonstrations, some of which are described below.
Some of the 136 municipalities argued for public management and lodged an appeal at the
Regional Administrative Court against the ATO’s decision.
11
The official denomination was, ‘Ambito Territoriale Ottimale no. 2, Napoli-Volturno’. Later Caserta
and its Province became part of a separate ATO. The two cities share the same water resources but
have separate management systems.
12
The agreement was that initially 40 per cent of the new company would be in private hands, the
municipal authority retaining control of the remaining 60 per cent. It was also agreed that over the
following two years the proportion in private hands would increase to 49 per cent. The finances of this
deal are interesting. The ATO’s total annual revenue was almost Euros 243,000,000. The private
shareholders would pay Euros 200,000 for their 40 per cent of the company.
