The Italian government has approved the privatization of as much as 40 percent of its national rail operator, Ferrovie dello Stato, according to a statement posted to the organization’s website Tuesday. During a cabinet meeting Monday in Rome, the Italian Council of Ministers approved the privatization but did not provide details or a date for the sale, the Financial Times reported. Italy’s finance ministry has previously said the sale could take place in the second half of next year.
“This is the beginning of a path,” Italian transportation minister Graziano Delrio told the Financial Times. Despite the sale, the railway’s infrastructure will still be owned by the government. Delrio also said the sale is meant to improve the performance of the country’s struggling regional and commuter rail services, which are operating far behind the more lucrative and efficient high-speed railways.
The sale will be made through an initial public offer and may be carried out over several stages, Think Railways reported. It is also part of the Italian government’s privatization plan that has recently seen the sale of Poste Italiane, the country’s postal service, and ENAV, the country’s air traffic control service.
The railway operator's sale highlights a surge in confidence in Prime Minister Matteo Renzi’s center-left government that investors are becoming increasingly interested in the country’s state-owned assets. Italy’s economy began growing again in 2015, after enduring a triple-dip recession.
Renzi has ramped up privatization efforts in Italy this year, after slowing them down last year out of concerns that results would not live up to expectations, particularly after the disappointing performance of shipbuilding company Fincantieri, which is trading far below its 2014 listing price.
Last year, Ferrovie dello Stato reported 2.1 billion euros of earnings — up 3.9 percent from the year before — before interest, tax, depreciation and amortization.