Apulia and Basilicata move towards deal

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An agreement over water transfers would remove a significant obstacle to privatising one of Italy’s largest water authorities.

The southern Italian regions of Apulia and Basilicata may be close to reaching an agreement over a longstanding dispute involving the running of water services and the remuneration of water transfers that has led them to court.

Resolution of the dispute would open the way for Apulia’s water services operator, Acquedotto Pugliese (AQP), to disentangle its interests from the Basilicata regional authority. AQP runs water services for 60% of Basilicata and, in turn, the Basilicata regional authority has a 16% share of AQP. This cross shareholding is seen to be an obstacle to AQP’s plans for privatisation. The proposed solution is to divide the company into two units, one serving Apulia, which could move towards privatisation, and the other serving Basilicata, which could be owned by the Basilicata regional authority.

The central issue is the price of water transfers from the water-rich but scarcely populated Basilicata to the larger, richer, but dryer Apulia region. The disagreement prompted Basilicata’s municipalities to join forces to set up a separate water operator, Acquedotto Lucano (AQL), to run water services in the region. AQP asked the local administrative court to prevent the newly formed AQL from operating, claiming that in doing so it would damage AQP’s financial interest, deriving from its 18-year licence to run water services in 60% of Basilicata’s territory. The case was adjourned in October on the understanding that an agreement between the two parties may be in sight.

A source involved in the negotiations said that a court judgement in favour of either side would not make any real difference to the situation or jeopardise the chances of successfully closing the negotiations. A compromise deal was believed to be sitting on the desks of the chairmen of the two regional authorities as GWI was going to press.