Mazzoncini and FS challenges: TPL, goods, full mobility, and international expansion

The CEO of Gruppo FS Italiane, Renato Mazzoncini, during an audit in Transport Commission of the Chamber of Deputies, has shown the guidelines for the near future of FS to Members of Parliament and to all of those that followed the live streaming.

Rome, 22 March 2016

TPL and mobility, transport of goods, international expansion, competition and strategies.
The CEO of Gruppo FS Italiane, Renato Mazzoncini, during an audit in Transport Commission of the Chamber of Deputies, has shown the guidelines for the near future of FS to Members of Parliament and to all of those that followed the live streaming

From transport company to mobility company, for modal integration

“We need to convert FS from a railway company to a mobility company, this is a cultural change that absolutely is a must. Our railwaymen now think about trains, but travellers are those we have to think about: if we do not get a move on, Ferrovie will have troubles. Ferrovie dello Stato - said the top managers - are already the backbone of the country's mobility. We must become a mobility supplier: if not us, someone else will. I always say that: we must start to think also to sell Ntv or Alitalia tickets."

FS, first company in Italy for investments

“In the last 10 years we made two important things as a group: we change trains, from those of the 70s to the train of 2000, and we fixed the accounts: this year we will close the financial year with a good profit, especially if compared with other European companies." Even if without figures, Mazzoncini highlighted that "it will be a profit with a significant growth" if compared to the positive result of 300 million Euro of the previous year. "I would recommend to leave the profits in Ferrovie and invest it in the business plan. It is an important plan that requires funding and the resources generated are important.” Taking about investments, the CEO said that FS has “actually 4,1 billion of investments in 2015, we have a budget of 6,2 billion in 2016, while the second company for investments, Enel, has 3 billion.” In short, "FS invests twice if compared to the second company for investments."

By the end of the year, Mercitalia will come to light

"We lost a lot of money on goods. We have a dozen companies and we are working for the reorganization within the year, to create of a new hub for goods. We are focusing on the spin off of Trenitalia Cargo Division in Mercitalia, a new company in which we will put all the realities of the field, so that our customers will finally have a single point of contact."
"We have not yet submitted the business plan - added the CEO - but on the first draft of the plan, half a billion of investments on freight transport has been planned, about 220 to 230 million will be invested to renew the rolling stock and the same amount for the part of logistic platform."

Spin off the network means to kill the group

"If the decision will be for stock exchange listing of Ferrovie dello Stato Italiane and the railway network will be given to State property, the direct effect could be a weakening of FS." The value of the network, said the CEO, is 26 billion, which "are inactive", but "when we go to the bank to fund major works, they give us very low rates because we have these great assets." Spin off the railway network of Ferrovie dello Stato Italiane group "means to kill the group, we could lose the whole know-how. It is one of the most important things that we are discussing with the Ministry. There are different options, we will try to not divide it, "said again Mazzoncini, adding that the business plan that he is developing" will also face this issue, and it will answer to many questions." On listing, Mazzoncini explained that "the issue has been moved to 2017 and we will take a decision after the business plan. I do not have any kind of ideological preclusion, because according to dpcm, the control remains fully public. I just need to be sure that it is a successful operation and therefore it must be" based on a serious and very strong business plan."

The single European railway market

"We are absolutely favourable to the opening of European railway spaces. Here in Italy, we have the competitor space already occupied by Ntv." Focusing on the ongoing discussions about the IV European railway package, the CEO does not seem to be worried of the possible arrival of the French and German railways on the Italian high speed market. “We already have Italo. Sure - he said - with all respect, I am mostly worried of competing with French or German railways. We are the only country that has competitors on the High speed, and we already became stronger."

FSE, ATAC, Trenord

Ferrovie dello Stato Italiane are interested in a possible acquisition of Ferrovie Sud Est. By answering the question of some journalists before the beginning of the audit, Mazzoncini replied: "Of course, we are interested in everything related to public transport."

About the ATAC, the CEO said: “If the question is if I am interested on ATAC, the answer is no. “If the question is if I am interested on road transport in the Capital city, the answer is yes. The best would be competitions. We have adialogue with the Municipality of Rome, which has the problem of a company with 1,7 billion of debt, technically bankrupt: they would be naive to not start any interlocutions. We have to move or foreign companies will," said Mazzoncini, sure that municipal companies, sooner or later, "will be given up" by local authorities. "We are the only party - added - which can also propose a pricing integration."
Fro what concern Trenord, "as said by Maroni, we opened a dialogue to arrive to a reorganization for the upcoming challenges, the service agreement expires in 2020 and we must face the problem of how to meet them. We proposed to Maroni to take control of Trenord, in order to ensure the investments. The current equal model, from my point of view, has no logic, and it also makes difficult for Lombardia Region to be the controller." To a question on the operation times, Mazzoncini replied that "I think we can do it even now."

Interest for Greek railways

FS are interested in privatization of Greek railways. "We are participating to data room for privatization of Trainose companies - confirmed Mazzoncini. - At the moment we are three, along with China and Russia. It is a very small reality, because it is not related to rails, is an operation that will be worth less than 100 million Euros." The deadline for submission of expressions of interest, which was initially set at yesterday, has been postponed to about mid-April.

FS, requests from Iran to Sweden

In the railway world "only seven nations have high-speed trains, and Italians and Japanese people have the best systems," thanks to this skill "we can go around the world." There are many requests for the Italian railway excellence, "from Iran to Sweden.” Iran represents "a very important opportunity and we are able to do it." Furthermore, "as operators, we participate to a competition in UK, for the London-Edinburgh line, very important, where today the service is provided by Virgin of Richard Branson - explains the CEO - we are in Ati (Associazione temporanea di impresa) with a strong British company, and we are the only non-British company to have obtained the passport, a license for competition in England. We are very confident. International development is extremely important, if we remain only in Italy we will become a colony piece-after-piece."