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Government's Plan for Beach Concessions: Extensions and Compensation

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Government's Plan for Beach Concessions: Extensions and Compensation

30 set 2024

The Italian government is working on a new plan for beach concessions to be negotiated with the European Commission.
The plan includes extending current concessions until at least the end of 2025, with potential extensions up to 2029 based on regional availability of free beaches.
The government aims to finalize a coastal mapping by April 2025, which will determine the length of extensions.
The plan also addresses pre-emption rights, compensation for outgoing concessionaires, and potential increases in concession fees.
The government seeks an informal opinion from the European Commission before proceeding with the plan.

In response to the ongoing discussions among beach concessionaires about potential strikes, the Italian government has been developing a new plan to present to the European Commission.
This plan, which has emerged from various internal discussions, includes a draft proposal outlining a complex timeline for concession tenders and extensions.

According to a parliamentary source, the plan proposes that current concessions remain valid until December 31, 2025, at a minimum, and potentially until December 31, 2029, depending on regional circumstances.
The government asserts that, despite rulings from the Council of State and the European Union's concerns, existing concessions are effective until December 31, 2024, or until the end of 2025 if there are objective reasons preventing the completion of tenders.

The draft plan introduces new criteria for initiating tenders in compliance with EU law and includes an initial extension until December 31, 2025.
Additionally, the government plans to enhance the coastal mapping process, incorporating regional and qualitative data to assess the accessibility and attractiveness of free beaches for potential new concessionaires.
The Prime Minister is expected to adopt this mapping by April 30, 2025, which will be crucial in determining the extent of extensions region by region.

In regions where less than 25% of the coastline is available for new concessions, current concessions would be extended until December 31, 2027.
In regions with more than 25% availability, extensions could last until December 31, 2029.
Only after these dates would the old concessions be put up for tender.
The government argues that where there is no "scarcity of natural resources," existing concessions can be extended for a longer period.
Meanwhile, local authorities could tender the free beach areas.

This approach has previously been viewed skeptically by the European Commission, especially following the government's response to the Commission's reasoned opinion, which has brought the infringement procedure closer to referral to the European Court of Justice.

The government is seeking a difficult last-minute compromise.
It awaits an informal opinion from the European Commission on the new draft and, if there is a positive response, plans to include it in the "save-infractions" decree, potentially bringing it to the Council of Ministers by the end of August.

The plan also addresses pre-emption rights and compensation, which are contentious issues in negotiations with Brussels.
Outgoing concessionaires would have the right to exercise a first pre-emption and, in the absence of other interest, retain the concession for another seven years.
If there are multiple candidates, municipalities would initiate tenders, but current concessionaires could exercise a second pre-emption by matching the winning offer.

The criteria for ranking bids include awarding points for technical and professional experience, reliance on the concession as the primary source of income in the past five years, and the number of employees the new concessionaire commits to hiring from the outgoing concessionaire.

If outgoing concessionaires do not win the tender, they would be entitled to compensation determined by an expert appraisal, which would assess the value of investments, business value, and tangible and intangible assets used in the activity.
This compensation would set the minimum bid amount for the tender.

The maximum duration of new concessions, whether 15 or 20 years, remains under discussion.
Meanwhile, the government is considering a potential 10% increase in concession fees, given the plan's numerous benefits for the concessionaires.