Italian ports are crucial to national and European supply chains, ranking among the largest European ports by throughput. Despite their strategic location in the Mediterranean and pivotal role in logistics and trade, Italian ports face significant challenges that hinder their growth, competitiveness, and efficiency:
Under-investment and aging infrastructure
Italy’s port infrastructure ranks poorly on global competitiveness indices, especially in terms of quality and efficiency compared to Mediterranean and European peers. This under-investment may restrict capacity expansion, modernisation efforts, and the adoption of innovative technologies, ultimately limiting growth and operational performance.
Increasing market and operational pressures
The global shipping industry’s shift toward larger vessels (“gigantism”) and rising sustainability requirements in some jurisdictions requires continuous, substantial investments in port capacity, advanced equipment, and green technologies. These investments include, for example, dock electrification and improvements in multi-modal connectivity to meet evolving demands.
Fragmented governance and inter-locality competition
The highly fragmented port authority structure weakens the ability to coordinate investments effectively at the national level. This fragmentation leads to constrained public financing, governance challenges, and inconsistent regulatory practices. This administrative and regulatory complexity hinders strategic development and slows infrastructure upgrades. As a result, port infrastructure increasingly relies on individual logistics and terminal operators to drive economically sustainable development of Italy’s local ports, rather than through concerted efforts.
The adoption of the RAB model could represent a strategic opportunity
The Italian port sector stands at a critical juncture; it requires substantial, efficient, and sustainable infrastructure investment. It is important to note that, unlike some international examples, Italian ports do not clearly exhibit a dominant market position that would typically justify the introduction of a RAB model on competition grounds. Indeed, the RAB model is typically adopted in infrastructure sectors (for example, water and energy) characterised by natural monopoly or significant market power requiring that regulation limits prices for the regulated service to protect consumers.
Instead, discussion around the RAB model in Italy arises primarily from ongoing policy discussions aimed at modernising port governance and attracting private investment. The anticipated 2026 port reform aims to modernise and strengthen the Italian port system by promoting private investment in port maintenance and development. While Italian ports do not have dominant position that necessitates regulation, the adoption of the RAB model could offer a structured and proven regulatory-financial framework to address the challenges Italian ports currently face, such as:
Attracting private investment through stability and transparency
The RAB model would provide stability by allowing port operators to recover capital and operational expenditure via regulated tariffs, which would reflect efficient levels of expenditure at the port. A clear framework for regulation and oversight could reduce investment risks by introducing more stable and predictable returns, making Italian ports more attractive to private capital, which is crucial for large infrastructure projects.
Supporting long-term infrastructure financing aligned with strategic growth
By incorporating mechanisms for cost recovery over assets’ lifespans, which would include depreciation and regulated returns based on a weighted average cost of capital (WACC), the RAB model would support sustained funding for phased port expansions, technology upgrades, and environmental requirements. This alignment would in turn encourage investment that could enhance Italian ports’ competitiveness in Europe and globally.
Incentivising operational efficiency and service quality
Performance-based incentives embedded within the RAB model would incentivise port operators to improve cost efficiency and service standards. This would drive operational improvements, reducing turnaround times, decreasing waiting periods, and enhancing the attractiveness of Italian ports to shipping companies and logistics operators.
Sharing risk between investors and port users
The RAB model could be developed to share infrastructure investment risks between private investors and port users, providing downside risk protection to investors, further helping attract capital.
Ensuring fair competition and transparency through regulated tariffs and regulatory oversight
Regulated tariffs would promote competition and limit the potential for the abuse of market power by establishing clear, harmonised rules across ports.
International precedents demonstrate feasibility
Several international port systems, including those in Jersey, Australia (Melbourne), and Scotland, have successfully implemented tailored RAB models to regulate tariffs, attract private investments, and improve infrastructure quality. However, it is important to highlight that these examples involve ports with dominant market positions or natural monopolies, which differ from the Italian context. For instance, Melbourne’s port enjoys dominance with limited competition, primarily from Sydney; the Scottish example relates to a ferry port with exclusive route control; and Jersey’s port operates as a monopoly over key maritime services. These conditions provide a clearer economic rationale for RAB regulation in those cases. In contrast, the Italian port sector is more fragmented and competitive, and the case for RAB adoption is driven more by governmental and regulatory reform discussions than by market dominance. Italy’s experience with RAB models in sectors like energy and airports also provides examples that could be adapted for ports.
The introduction of a clear and well-designed regulatory framework, combined with governance reforms, could deliver improvements in infrastructure quality, operational efficiency, and environmental sustainability. To realise these benefits through a RAB model, Italy should establish a transparent and predictable regulatory regime that provides defined routes through which investors have a reasonable prospect of recovering their costs (including their opportunity cost of capital), encourages cost control and operational performance improvement, and sets cost-reflective tariffs for users.
The RAB model could offer the Italian government a well-established and proven tool to attract private investment to modernise the Italian port system and secure long-term growth and competitiveness for Italy’s maritime infrastructure.
