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A conversation with Andrea Giuricin

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Professor at the University of Milan teaching Transport Economics and visiting professor at the China Academy Railway Science, Andrea Giuricin mainly deals with the liberalisation of utilities, focusing on the transport sector, and works with the UN and the World Bank in this regard.

The NRRP will definitely have an impact on the infrastructure sector, how can private players help fill the investment gap, estimated at 15 trillion dollars by 2040 according to the OECD? Why is there a structural lack of private investment in this sector?

The NRRP mainly targets physical infrastructure, but there is no doubt that all such infrastructure is of little use if we do not implement reforms to improve Italy’s logistics and transport systems.

Rail freight transport provides a good example. The Government has agreed to allocate around 30 billion euros for the railway sector within the NRRP and around 10 billion euros in the “complementary fund”.

All of this infrastructure will help improve the country’s infrastructural assets, but there is no doubt that there continue to be some competitiveness problems for rail freight – which currently accounts for only 13% of the share – which cannot be solved by new infrastructures alone.

Reforms are required to improve the sector’s efficiency and make it a truly competitive one, so as to make it a logistics backbone and reduce freight prices.

But to attract private investment we need a streamlined red tape and a certain, stable regulatory environment.

This mind-set shift and these reforms are both challenging and not easy to achieve, even if the Government has taken steps forward over the last few months.

The pandemic introduced new habits (remote working) and new consumer trends. Which changes will or have already occurred in the transport sector?

The transport sector has been significantly affected by the pandemic. If we look at passenger transport in particular, it has seen a sharp drop in the traffic volumes.

To bring some examples up, in Italy in 2019, we had about 161 million passengers travelling by air, while in 2020 the number stood at 40 million passengers. 2021 is a very complex year, since in the first 10 months the drop was about 67% compared to 2019.

The same goes for rail transport, where high-speed trains, for example, have suffered a major setback. Even in this sector, however, a few elements are worth highlighting.

The pandemic creates greater uncertainty, but government regulation should help contain it.

Online meetings have certainly had an impact on business travel, which is unlikely to return to 2019 levels before 2024.

As far as the freight sector is concerned, there is no doubt that e-commerce has recorded a significant increase, moving towards a shift in consumption.

However, we have also experienced a supply shortage of many logistics providers as a result of the pandemic: let’s mention the sea sector or even the airline industry, where supply chain bottlenecks are leading to a sharp price hike.

For example, in the container sector, prices between China and Europe for sea shipping have risen from around 1,500 to over 14,000 dollars in a little over a year and a half. This can lead to a shorter supply chain for companies.

Where will sustainability come into play in redesigning infrastructure and transport in the coming years?

Sustainability is at the heart of the European Commission’s plans. The political choice to move in this direction has an enormous impact, not the least because Europe has set itself ambitious targets for 2030.

We must, at the same time, bear in mind that it is not possible to achieve this transition too quickly given the effects it may have on the manufacturing and labour sectors, and that any change has considerable costs.

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