Mandatory Credit: Photo by LUCA ZENNARO/EPA-EFE/REX/Shutterstock (9794190d) A general view showing a part of the partially collapsed Morandi bridge, in Genoa, Italy, 19 August 2018. Italian authorities, worried about the stability of remaining large sections of the bridge, evacuated about 630 people from nearby apartments. The Morandi bridge partially collapsed on 14 August, killing at least 41 people. Genoa Morandi bridge collapse aftermath, Italy - 19 Aug 2018
The Morandi bridge collapsed on August 14, 2018, sending about 35 cars and several trucks plunging 45 metres (150 ft) onto railway tracks below killing 43 people and injuring dozens © LUCA ZENNARO/EPA-EFE/REX/Shutterstock

A year on from the collapse of Genoa’s Morandi bridge, which killed 43 people, the disaster has become a symbol of the souring relationship between big business and politics under Italy’s populist, anti-establishment government. 

When Matteo Salvini, deputy prime minister, called for snap elections last week plunging the coalition government into crisis, Italian stocks tanked. But there was one notable exception: Atlantia, the infrastructure group in the eye of the political storm over its alleged role in the collapse, rose 3 per cent. 

The stock gain followed weeks of threats by the anti-business Five Star Movement, the largest party in the rocky coalition with the far-right League. Five Star’s leader Luigi Di Maio has repeatedly pledged to strip Atlantia’s toll road operator, Autostrade per l’Italia, of its concession to run Italy’s roads — without due process. 

It has underlined how the clash between Five Star and Italian big business has been one of the defining issues of the government.

Davide Serra, founder and chief executive of boutique asset manager Algebris, which has $12bn under management, says the government has “crashed the confidence of domestic entrepreneurs”. 

“For the first time you have had a strongly anti-business and anti-rule of law force in government in Italy with the Five Star Movement,” said Mr Serra, a financial backer of Italy’s former reformist prime minister Matteo Renzi. 

That anti-business sentiment was fanned by what is widely considered to have been a bungled response to the disaster by Atlantia, and the billionaire Benetton dynasty that is its biggest shareholder. 

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“The scene was surreal,” said an official at the scene. “There were these huge piles of concrete. You could see cars crushed underneath them.” 

It took days for Atlantia and Autostrade, the subsidiary responsible for the upkeep of that section of the Genoa Bridge and half of Italy’s 6,000 kilometre-long toll road network, to try to dominate the media response, said people directly involved with the events. The companies said however, that executives were on the scene within hours — although it is known that it was a week before the board met to discuss the disaster.

Shares in Atlantia lost a third of their value in the immediate aftermath of the collapse, as the government called for its licences to be revoked and heavy fines imposed against the company. 

A director at Atlantia, Bernardo Bertoldi, bought shares worth hundreds of thousands of euros when they opened sharply lower after the collapse, said people with knowledge of the events, further denting the company’s already frail public image. Mr Bertoldi later left the group when the board was almost wholly overhauled in April, a move some considered to be a purge. 

People pay tribute with flowers to bridge collapse victims, marking the first anniversary of Morandi bridge collapse in which 43 people died, in Genoa, Italy, August 13,2019. REUTERS/Massimo Pinca
Autostrade says said it has apologised for not being able to express its ‘closeness’ to the families and the city © Reuters

Atlantia declined to comment on Mr Bertoldi and the transaction. 

Autostrade, which is not listed, never issued an apology for fear of it being seen as an admission of guilt, said people familiar with the company’s thinking. 

The company said it has apologised for not being able to express its “closeness” to the families and the city, adding that it has fulfilled its duties with regards to the bridge.

A probe investigating the disaster has identified 70 suspects across business and government alike, including Giovanni Castellucci, who headed both Atlantia and Autostrade, and key figures from the country’s transport ministry.

Autostrade has earmarked €500m for disaster alleviation and begun paying victim settlements that preclude affected families from becoming plaintiffs once the case goes to trial.

Weeks after the collapse, Atlantia commissioned a report that found that extraordinary maintenance of the bridge had become necessary several times in the decade before the collapse. The FT revealed the existence of that document last month. The report has not been made public despite calls from politicians to do so.

The overhang on Atlantia’s share price from threats by Five Star to strip Autostrade of its highway concession is because it is guarantor for debt issued by its subsidiary. 

According to Standard & Poor’s, as of December 31 2018, Atlantia’s capital structure included €46bn of debt of which €5.7bn was held at Atlantia level, €11bn at Autostrade level and the remaining €26.5bn at Abertis, a Spanish infrastructure group acquired in 2018.

If the Italian government were to terminate the Autostrade concession and follow regulation, they would have to pay out about €10bn, according to advisers. A person close to the company puts that figure closer to €24bn. 

But the fear for Atlantia is that Five Star unilaterally strips Autostrade of the concessions. Governments of all stripes have coexisted with the Benettons’ lucrative highway concession — only Five Star chose the collision course.

Atlantia’s injection of €300m into embattled airline Alitalia was meant to ease tensions, people close to the company said. But Italian financial newspaper Il Sole 24 Ore reported that, given the government crisis, Atlantia could reconsider its pledge. 

“It has been a wake-up call for investors looking at Italy the extent to which Atlantia’s share price has become an inverse corollary of the power of the Five Star in the government,” one senior financier said. 

Carlo Alberto Carnevale Maffè, professor of entrepreneurship and strategy at Milan’s Bocconi University, said the government crisis underlined the volatility of Italy’s political risk to companies in a country where governments last on average less than 18 months. 

“Concessions last for 20 or 30 years and governments last for barely more than 12 months,” he said. “Concessions will survive the government, every time.” 

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