US embassy cable - 02ROME2912

C O N F I D E N T I A L SECTION 01 OF 04 ROME 002912 
 
SIPDIS 
 
E.O. 12958: DECL: 06/05/2012 
TAGS: ELTN, KCIP, KCIP, KCIP, KCIP, IT, ITELTN, ITELTN, ITELTN 
SUBJECT: ITALIAN RAILWAY LIBERALIZATION AND SECURITY 
 
REF: A) ROME 01 4158 B) ROME 2533 
 
CLASSIFIED BY: DEPUTY ECONOMIC COUNSELOR DOHERTY FOR REASONS 1.5 (B) AN 
                       CONFIDENTIAL 
 
PAGE 02        ROME  02912  01 OF 04  141435Z 
D (D) 
 
1. (C) SUMMARY: ITALY'S RAILWAY COMPANY, FERROVIE DELLO STATO 
(FS), WHOSE HOLDINGS INCLUDE THE NATIONAL RAILWAY SERVICE AND 
RAIL INFRASTRUCTURE PROVIDERS, IS ON AN ECONOMIC UPSWING DUE 
TO A FAVORABLE MARKET AND SMART MANAGEMENT DECISIONS.  TO 
BOLSTER ITS BOTTOM LINE, FS IS FOCUSING ON INCREASING 
CAPACITY, SPEED, AND RELIABILITY IN PASSENGER SERVICES, 
MAINLY THROUGH THE CREATION OF A HIGH-SPEED RAIL NETWORK. 
DESPITE THE MORE POSITIVE ECONOMIC PERFORMANCE OF FS, THE GOI 
HAS NO PLANS TO PRIVATIZE THIS GOI ASSET.  U.S. COMPANIES MAY 
STILL FIND BUSINESS OPPORTUNITIES IN THE SECTOR, INCLUDING 
THE PROVISION OF HIGH-TECH GOODS AND SERVICES, AND IN THE 
LOCAL AND REGIONAL PASSENGER AND CARGO MARKET.  FS OFFICIALS 
REALIZE THAT THE RAILWAY NETWORK IS CRITICAL NATIONAL 
INFRASTRUCTURE THAT COULD BE TARGETED BY TERRORISTS AND HAVE 
HEIGHTENED SECURITY MEASURES SINCE SEPTEMBER 11.  EMBOFFS 
PLAN TO ATTEND, AS OBSERVERS, AN OCTOBER 2002 MEETING IN ROME 
OF EUROPEAN RAILWAY SECURITY OFFICIALS TO ENGAGE THE GOI ON 
THIS AND POSSIBLY OTHER CRITICAL INFRASTRUCTURE ISSUES.  END 
SUMMARY. 
 
BACKGROUND 
---------- 
2. (SBU) ECONOFF HELD A SERIES OF MEETINGS WITH SENIOR 
RAILWAY OFFICIALS TO GAUGE THE STATE OF THE SECTOR'S 
LIBERALIZATION AND TO DISCUSS ITALIAN RAILWAY INFRASTRUCTURE 
SECURITY IN THE POST-9/11 WORLD.  OUR IMPRESSION IS THAT OF A 
RAILWAY SECTOR ON THE ECONOMIC UPSWING, WITH BUSINESS 
DIRECTORS MODERNIZING SYSTEMS TO IMPROVE PERFORMANCE, AND 
WITH SECURITY DIRECTORS WHO HAVE IMPROVED SECURITY OVER THE 
                       CONFIDENTIAL 
 
PAGE 03        ROME  02912  01 OF 04  141435Z 
PAST YEAR.  INDIVIDUALS WITH WHOM WE SPOKE INCLUDE: MARIA 
COSTA, DIRECTOR OF FOREIGN RELATIONS OF FS (THE ITALIAN 
NATIONAL RAILWAY COMPANY); VINCENZO SOPRANO, DIRECTOR FOR 
BUSINESS DEVELOPMENT OF FS; ENZO CELLI, DIRECTOR GENERAL FOR 
RAILROADS OF THE MINISTRY OF TRANSPORTATION AND 
INFRASTRUCTURES (MOT); GIOVANNI SATTA, DIRECTOR OF 
FEDERTRASPORTO, A CONFEDERATION OF ITALIAN TRANSPORTATION 
ASSOCIATIONS; DAMIANO TOSELLI, CORPORATE SECURITY DIRECTOR OF 
FS; FRANCO FIUMARA, SECURITY DIRECTOR OF THE ITALIAN RAILWAY 
NETWORK (RFI), AN FS HOLDING; AND RICCARDO MATTEI OF THE 
RAILWAY CONSULTING FIRM STEER DAVIES GLEAVE. 
 
SNAPSHOT OF THE RAILWAY SYSTEM 
------------------------------ 
3. (U) A CORPORATE HOLDING COMPANY 100 PERCENT OWNED BY THE 
ITALIAN FINANCE MINISTRY, FERROVIE DELLO STATO WAS PART OF 
THE MINISTRY OF TRANSPORT UNTIL 1992 WHEN, AS MANDATED BY 
EUROPEAN UNION (EU) DIRECTIVES (REF. A), IT BECAME A SEPARATE 
STATE-OWNED HOLDING COMPANY.  IN ACCORDANCE WITH SIMILAR EU 
DIRECTIVES CALLING FOR THE SEPARATION OF THE BUDGETS OF 
RAILROAD INFRASTRUCTURES AND RAILROAD SERVICES, FS IN 2000 
CREATED TWO MAJOR HOLDINGS WITH SEPARATE MANAGEMENT AND 
BUDGETS: TRENITALIA (THE PREDOMINANT ITALIAN RAILWAY SERVICE 
COMPANY) AND RETE FERROVIARIA ITALIANA (RFI), THE NATIONAL 
RAILWAY INFRASTRUCTURE PROVIDER.  FURTHER FS HOLDINGS INCLUDE 
GRANDI STAZIONI (THE HANDLING COMPANY OF 12 MAJOR TRAIN 
STATIONS, MEDIE STAZIONI (THE HANDLING COMPANY OF 1,000 
ITALIAN MINOR STATIONS), AND TAV (ITALY'S HIGH SPEED RAIL 
COMPANY).  FERROVIE DELLO STATO REMAINS A MAJORITY 
STAKEHOLDER IN MOST OF THESE HOLDINGS, AND A SIZABLE MINORITY 
STAKEHOLDER IN THE OTHERS. 
                       CONFIDENTIAL 
 
PAGE 04        ROME  02912  01 OF 04  141435Z 
 
4. (U) SINCE THE FINANCE MINISTRY IS THE SOLE SHAREHOLDER OF 
FS, THE ITALIAN INTERMINISTERIAL COMMITTEE FOR POLITICAL 
ECONOMY (CIPE) EXERCISES CONTROL OVER ITS MAJOR ECONOMIC 
TRANSACTIONS.  THE TRANSPORT MINISTRY CREATES POLICIES 
RELATED TO SAFETY, QUALITY OF SERVICE, INFRASTRUCTURE 
DEVELOPMENT, AND COMMERCIAL COMPETITION. 
 
5. (U) VINCENZO SOPRANO, DIRECTOR OF BUSINESS DEVELOPMENT FOR 
FS, PROVIDED US WITH A SNAPSHOT OF FERROVIE DELLO STATO, AND 
SOME STATISTICS ON ITS TWO MAJOR HOLDINGS.  THROUGH 
TRENITALIA AND RFI, FS OWNS AND OPERATES OVER 16,000 
KILOMETERS OF NATIONAL RAILWAY LINES, 4,500 LOCOMOTIVES, MORE 
THAN 10,000 PASSENGER CARS AND 50,000 FREIGHT CARS, 2,500 
STATIONS, 570 CARGO AREAS, AND 367 ELECTRICAL STATIONS AND 
SUBSTATIONS.  IT HAS APPROXIMATELY 110,000 EMPLOYEES, DOWN 
FROM 160,000 A FEW YEARS AGO (MOSTLY THROUGH ATTRITION).  FS 
EARNED APPROXIMATELY 6.9 BILLION EUROS IN REVENUES IN 2001, 
AND HAD 4.7 BILLION EUROS IN CAPITAL EXPENDITURES.  IT 
TRANSPORTS APPROXIMATELY 90 MILLION TONS OF CARGO EACH YEAR 
ON NEARLY 1,200 FREIGHT TRAINS PER DAY. 
 
ECONOMIC PERFORMANCE: TURNING THE CORNER? 
----------------------------------------- 
 
                       CONFIDENTIAL 
 
                           CONFIDENTIAL     PTQ2633 
 
PAGE 01        ROME  02912  02 OF 04  141436Z 
ACTION EUR-00 
 
INFO  LOG-00   MFA-00   AF-00    AID-00   CEA-01   CIAE-00  CTME-00 
      DODE-00  DOTE-00  WHA-00   SRPP-00  DS-00    EAP-00   EB-00 
      EXIM-01  E-00     VC-00    FRB-00   H-01     TEDE-00  INR-00 
      IO-00    ITC-01   L-00     AC-01    NEA-00   NSAE-00  NSCE-00 
      OMB-01   OPIC-01  ACE-00   SP-00    IRM-00   SSO-00   SS-00 
      STR-00   TRSE-00  USIE-00  SA-00    EPAE-00  DSCC-00  G-00 
      SAS-00     /007W 
                  ------------------BD3F31  141437Z /38 
R 141500Z JUN 02 
FM AMEMBASSY ROME 
TO SECSTATE WASHDC 4222 
INFO EU MEMBER STATES COLLECTIVE 
AMCONSUL FLORENCE 
AMCONSUL MILAN 
AMCONSUL NAPLES 
DEPT OF COMMERCE WASHDC 
DEPT OF TRANSPORTATION WASHDC 
 
C O N F I D E N T I A L SECTION 02 OF 04 ROME 002912 
 
SIPDIS 
 
E.O. 12958: DECL: 06/05/2012 
TAGS: ELTN, KCIP, IT 
SUBJECT: ITALIAN RAILWAY LIBERALIZATION AND SECURITY 
 
6. (U) BOTH SOPRANO AND MARIA COSTA OF FS ARE OPTIMISTIC 
ABOUT THE STATE-OWNED COMPANY'S FUTURE PERFORMANCE.  FS 
REGISTERED A MINUSCULE BUT SYMBOLIC PROFIT IN 2001 OF 20 
                       CONFIDENTIAL 
 
PAGE 02        ROME  02912  02 OF 04  141436Z 
MILLION EUROS -- ITS FIRST PROFIT EVER, UP FROM A LOSS OF 683 
MILLION EUROS IN 2000 AND 1.45 BILLION EUROS IN 1999. 
SOPRANO AND COSTA ATTRIBUTE MUCH OF THIS SUCCESS TO THE 
"PRIVATE-SECTOR CULTURE" IN TRENITALIA (WHICH MANAGES LONG 
DISTANCE, REGIONAL, AND METROPOLITAN PASSENGER AND FREIGHT 
SERVICES), NOTING THAT IT AND RFI MUST NOW OPERATE WITH THEIR 
OWN BUDGET, RESOURCES, AND ABILITIES.  ACCORDING TO INTERNAL 
FS STATISTICS, CUSTOMER SATISFACTION AND CORPORATE IMAGE HAVE 
IMPROVED AS WELL AS THE COMPANY'S SAFETY RECORD.  SOPRANO 
STATED THAT FS' .28 ACCIDENTS PER MILLION KILOMETERS TRAVELED 
(THE LOWEST IN A DOWNWARD TREND DATING FROM 1996) IS WELL 
BELOW THE EUROPEAN BENCHMARK OF .6 - .7 ACCIDENTS 
 
7. (U) FS AIMS TO IMPROVE PERFORMANCE BY ENHANCING THE 
CAPACITY, SPEED AND RELIABILITY OF ITS SERVICES, FOCUSING ON 
PASSENGER (AS OPPOSED TO FREIGHT) TRAFFIC.  A KEY PART OF 
THIS STRATEGY IS THE DEVELOPMENT OF ITALY'S HIGH-SPEED RAIL 
NETWORK THROUGH ONE OF ITS HOLDINGS, TAV (A PUBLIC-PRIVATE 
PARTNERSHIP COMPANY FORTY PERCENT OWNED BY FS).  THE 
HIGH-PEED RAIL NETWORK WILL BE CONCENTRATED AROUND ITAL'S 
FASTEST GROWING CITIES OF ROME, NAPLES, TURIN BOLOGNA, 
FLORENCE, GENOA, AND VENICE.  WHILE THS DUAL GAUGE TRACK 
SYSTEM IS DESIGNED FOR PASSENGR SERVICE, FS HOPES THAT THIS 
"VERTICAL BACKBONE (EVENTUALLY PLANNED TO INCLUDE 1,300 
KILOMETERSOF TRACK) MAY ONE DAY TRANSPORT FREIGHT TRAFFIC AS 
WELL.  (NOTE: BY SOME ESTIMATES, ITALIAN INTERNAIONAL 
RAILWAY FREIGHT IS EXPECTED TO GROW BY SEVETY-FIVE PERCENT 
BY 2005.  END NOTE). 
8. (U) TA'S INCREASING PORTION OF FS' CAPITAL EXPENDITURES 
(APPROXIMATELY 2 BILLION OF 4.7 BILLION EUROS IN 001) 
INDICATES THE IMPORTANCE OF THE HIGH-SPEED AIL PROJECT IN 
                       CONFIDENTIAL 
 
PAGE 03        ROME  02912  02 OF 04  141436Z 
FS' BUSINESS PLAN.  WHILE ONLY THE FLORENCE - ROME LINK IS 
YET OPERATIONAL, THE RAILWAY COMPANY EXPECTS TO COMPLETE THE 
HIGH-SPED LINK FROM ROME TO NAPLES IN 2004, TURIN TO MILA 
IN 2005, FLORENCE TO BOLOGNA TO MILAN IN 2007, ND GENOA TO 
VENICE IN 2010.  GRUPPO FERROVIARIO BEDA IS MANUFACTURING 
THE FLEET OF SIXTY, 13-CAR,NON-TILTING TRAINS FOR USE ON THE 
NETWORK. 
 
STATE OF PLAY: MARKET LIBERALIZATION 
------------------------------------ 
9. (U) THROUGH THE CREATION OF TRENITALIA AND RFI, ITALY HAS 
TAKEN A BIG STEP IN FORWARD IN PUTTING ITS RAILWAY SECTOR ON 
A MARKET BASED STANDARD.  NONETHELESS, THERE IS STILL A LONG 
WAY TO GO.  IN SEPTEMBER 2001, A FREIGHT TRAIN OWNED BY 
FERROVIE NORD WAS THE FIRST, NON-FS TRAIN TO TRAVEL ON THE 
ITALIAN RAIL NETWORK.   TO BE ABLE TO PROVIDE RAILWAY SERVICE 
IN ITALY, AN INTERESTED COMPANY MUST FIRST ACQUIRE A LICENSE 
FROM THE MOT AND A CERTIFICATE OF SAFETY AND SECURITY FROM 
RFI.  WHILE APPROXIMATELY TEN COMPANIES (ALL CARGO PROVIDERS) 
HAVE ACQUIRED THE REQUIRED LICENSE, ONLY FERROVIE NORD HAS 
ACQUIRED BOTH THE NECESSARY  LICENSE AND SECURITY 
CERTIFICATE. 
 
10. (SBU) REGARDING ANY FUTURE PRIVATIZATION, MOT DIRECTOR 
GENERAL ENZO CELLI (AND OTHERS) EXPLAINED THAT THE GOI WOULD 
NOT BE ABLE TO SELL ITS STAKE IN FS, OR ANY PART THEREOF, FOR 
A PROFIT UNLESS FS COULD FIRST BE MADE MORE COMPETITIVE.  HE 
STATED THAT IT WOULD BE YEARS BEFORE THE RAILWAY SECTOR IS 
READY FOR PRIVATIZATION AND THAT THE SECTOR WOULD 
REQUIRE HEAVY INVESTMENT IN THE MEANTIME TO BE MADE MORE 
ATTRACTIVE TO BUYERS.  THIS INVESTMENT, HE EXPLAINED, IS 
                       CONFIDENTIAL 
 
PAGE 04        ROME  02912  02 OF 04  141436Z 
BEING MADE THROUGH THE HIGH-SPEED RAIL PROJECT (AMONG 
OTHERS).  WITH AN EYE TOWARD A FUTURE MORE LIBERALIZED 
MARKET, FS' SOPRANO TOLD US THAT HIS STRATEGY IS TO INCREASE 
SHAREHOLDER VALUE BY INCREASING THE RAILWAY NETWORK'S 
CAPACITY, IMPROVING EFFICIENCY IN RAILWAY OPERATIONS, AND 
IMPROVING CUSTOMER SATISFACTION.  HE CONCURRED WITH CELLI, 
THAT INCREASED LIBERALIZATION (AND EVEN PRIVATIZATION) WILL 
BE IMPOSSIBLE WITHOUT FIRST TAKING THESE STEPS. 
 
11. (SBU) CELLI AND SOPRANO BOTH NOTED THAT WHILE THE GOI MAY 
EVENTUALLY SELL SOME OR ALL OF ITS SHARE IN TRENITALIA, THEY 
WOULD LIKELY KEEP RFI STATE-OWNED.  THE PROVISION AND 
MAINTENANCE OF RAILWAY INFRASTRUCTURE IS NOT A PROFIT MAKING 
ENTERPRISE THAT CAN EASILY ATTRACT PRIVATE INTERESTS, AND THE 
STATE DOES NOT WANT TO SEE A DETERIORATION OF SERVICES 
COMPARABLE TO THE BRITISH. 
 
MARKET OPENINGS FOR U.S. COMPANIES 
---------------------------------- 
12. (U) GIOVANNI SATTA OF FEDERTRANSPORTO, THE CONFEDERATION 
OF ITALIAN TRANSPORT COMPANIES, BELIEVES THERE ARE MARKET 
OPPORTUNITIES FOR U.S. FIRMS IN IT AND RAIL-TRAFFIC CONTROL 
SYSTEMS.  HE STATED, AND SOPRANO OF FS CONCURRED, THAT FS 
INTENDS TO IMPROVE SERVICES THROUGH THE MODERNIZATION OF ITS 
 
                       CONFIDENTIAL 
 
                           CONFIDENTIAL     PTQ2636 
 
PAGE 01        ROME  02912  03 OF 04  141436Z 
ACTION EUR-00 
 
INFO  LOG-00   MFA-00   AF-00    AID-00   CEA-01   CIAE-00  CTME-00 
      DODE-00  DOTE-00  WHA-00   SRPP-00  DS-00    EAP-00   EB-00 
      EXIM-01  OIGO-00  E-00     VC-00    FRB-00   H-01     TEDE-00 
      INR-00   IO-00    ITC-01   MED-07   AC-01    NEA-00   DCP-01 
      NSAE-00  NSCE-00  OMB-01   OPIC-01  ACE-00   SP-00    IRM-00 
      SSO-00   SS-00    STR-00   TRSE-00  USIE-00  SA-00    EPAE-00 
      DSCC-00  G-00     SAS-00     /015W 
                  ------------------BD3F47  141438Z /38 
R 141500Z JUN 02 
FM AMEMBASSY ROME 
TO SECSTATE WASHDC 4223 
INFO EU MEMBER STATES COLLECTIVE 
AMCONSUL FLORENCE 
AMCONSUL MILAN 
AMCONSUL NAPLES 
DEPT OF COMMERCE WASHDC 
DEPT OF TRANSPORTATION WASHDC 
 
C O N F I D E N T I A L SECTION 03 OF 04 ROME 002912 
 
SIPDIS 
 
E.O. 12958: DECL: 06/05/2012 
TAGS: ELTN, KCIP, IT 
SUBJECT: ITALIAN RAILWAY LIBERALIZATION AND SECURITY 
 
ELECTRONIC AND INFORMATION TECHNOLOGY (IT) CAPABILITIES. 
LIKEWISE, AS THE RAILWAY SECTOR LIBERALIZATION PROCESS 
CONTINUES, U.S. FIRMS COULD PROVIDE SIMILAR PRODUCTS AND 
                       CONFIDENTIAL 
 
PAGE 02        ROME  02912  03 OF 04  141436Z 
SERVICES TO NEW ENTRANTS IN THE ITALIAN RAILWAY MARKET.  WE 
ALSO BELIEVE THAT OPPORTUNITIES EXIST FOR U.S. COMPANIES IN 
THE REGIONAL AND LOCAL PASSENGER AND CARGO MARKETS (REF. A). 
 
SECURITY CONCERNS AND MEASURES 
------------------------------ 
13. (C) ECONOFF MET WITH FS SECURITY MANAGER DAMIANO TOSELLI 
AND, ALONG WITH POST'S TSA SECURITY LIAISON OFFICER (CASLO) 
KARL BROWN, WITH FRANCO FIUMARA, DIRECTOR OF SECURITY OF RFI, 
TO DISCUSS ITALIAN RAILWAY SECURITY POST-9/11. (FIUMARA WAS 
ALSO A SPEAKER AT THE EMBASSY-SPONSORED CRITICAL 
INFRASTRUCTURE PROTECTION CONFERENCE, SEE REF B.).  TOSELLI 
CHARACTERIZED THE ITALIAN RAILWAY NETWORK (INCLUDING THE 
THOUSANDS OF KILOMETERS OF RAILWAY, TRAINS, TUNNELS, 
STATIONS, PARKING FACILITIES, AND ASSOCIATED RESTAURANTS AND 
SHOPS) AS HIGH-RISK INFRASTRUCTURE, SINCE IT CONSTITUTES AN 
"OPEN" SYSTEM TO WHICH THE PUBLIC HAS ALMOST UNRESTRICTED 
ACCESS.  HE EXPLAINED FS' FOUR-PART PLAN TO PROTECT THE 
RAILWAY SYSTEM FROM ATTACK: INTELLIGENCE INTEGRATION, 
TECHNOLOGY IMPLEMENTATION, PROCEDURAL REVIEW, AND PERSONNEL 
TRAINING.  THIS PLAN, HE EXPLAINED, IS CARRIED OUT THROUGH 
THE COMBINED EFFORTS OF ALL LAW ENFORCEMENT UNITS INVOLVED: 
THE RAILWAY POLICE (PART OF THE NATIONAL POLICE FORCE), THE 
RAILWAY COMPANY'S PRIVATE SECURITY FORCE, VARIOUS MUNICIPAL 
POLICE FORCES, AND THE ITALIAN MILITARY. 
 
14. (C) TOSELLI EXPLAINED IN DETAIL THE ACTIONS TAKEN IN 
RESPONSE TO THE ATTACKS OF SEPTEMBER 11, 2001 TO HEIGHTEN 
SECURITY ON THE RAILWAY NETWORK.  THE NATIONAL RAILWAY POLICE 
NOW CONDUCT INCREASED ONBOARD PASSENGER CHECKS, INCREASED 
RAILWAY TRACK CONTROL WITH THE USE OF GROUND PERSONNEL AND 
                       CONFIDENTIAL 
 
PAGE 03        ROME  02912  03 OF 04  141436Z 
HELICOPTERS, AND INCREASED EXPLOSIVE DEVICE CHECKS WITH 
CANINE ASSETS.  ITALIAN MILITARY FORCES SET UP INCREASED 
GUARD SERVICES AND PATROLS AT SELECT BRIDGES AND TUNNELS AS 
WELL AS AT KEY FACILITIES SUCH AS STATIONS AND MAINTENANCE 
FACILITIES. 
 
15. (C) THE ITALIAN RAILWAY CORPORATE SECURITY FORCE ALSO 
TOOK ACTION, INCLUDING: 
- PERFORMING A RISK EVALUATION, IN COOPERATION WITH PUBLIC 
SECURITY FORCES, OF THE RAILWAY NETWORK'S FIXED ASSETS 
(STATIONS, TUNNELS, AND BRIDGES), 
- CLOSING THE SELF-SERVICE LUGGAGE DROP-OFF PROGRAM (NOW 
MONITORED BY THE POLICE), 
- UPDATING THE EMERGENCY ACTION PLANS OF BOTH STATIONS AND 
RAILWAY OFFICES, 
- INCREASING PRIVATE SECURITY GUARD AND PATROL SERVICES AT 
STATIONS, ROLLING STOCK YARDS, AND CHEMICAL AND HAZARDOUS 
MATERIAL YARDS, 
- ENHANCING SECURITY MEASURES IN POSTAL SERVICE AREAS (X-RAY 
CONTROL AND THE USE OF MASKS FOR EMPLOYEES), 
- CONDUCTING COMMUNICATION AWARENESS SEMINARS FOR RAILWAY 
SECURITY STAFF, 
- SECURING INFORMATION TECHNOLOGY SYSTEMS IN THE RAILWAY 
COMPANIES DATA ELABORATION CENTER AND TRAFFIC CONTROL CENTER 
AND 
- INCREASING RAILWAY STAFF TRAINING THROUGH SECURITY 
AWARENESS SEMINARS AND EVACUATION DRILLS. 
 
16. (C) FIUMARA SPOKE SPECIFICALLY OF THE DIFFICULTY OF 
PROVIDING SECURITY FOR ITALY'S ENTIRE NATIONAL RAILWAY 
INFRASTRUCTURE, INCLUDING OVER 16,000 KILOMETERS OF TRACK AND 
                       CONFIDENTIAL 
 
PAGE 04        ROME  02912  03 OF 04  141436Z 
ALL RAILWAY STATIONS.  HE AND POST'S CASLO SAID THAT THEY 
WOULD CONSIDER INFORMATION AND PERSONNEL EXCHANGES IN THE 
FUTURE. 
 
17. (C) BOTH TOSELLI AND FIUMARA EXPECT INCREASED 
PARTICIPATION AND INTEREST IN THE OCTOBER 2002 MEETING, TO BE 
HELD IN ROME, OF COLPOFER (COLLABORATION OF RAILWAY POLICE 
AND SECURITY SERVICES), THE TWENTY-NINE MEMBER ORGANIZATION 
OF EUROPEAN RAILWAY COMPANY SECURITY OFFICIALS AND RAILWAY 
POLICE FORCES DEDICATED TO INCREASED COOPERATION ON RAILWAY 
SECURITY ISSUES.  THEY SAID THAT THE EVENTS OF 9/11 HAVE 
REVITALIZED WHAT WAS AT ONE POINT A LARGELY INACTIVE GROUP. 
TOSELLI, THE CHAIRMAN OF COLPOFER, AND FIUMARA, THE SECRETARY 
GENERAL, WILL HOST THE UPCOMING MEETING AND INVITED EMBOFFS 
TO ATTEND AS OBSERVERS. 
 
COMMENT 
------- 
18. (SBU) THE OPTIMISM AND SECURITY-MINDEDNESS OF OUR FS 
COUNTERPARTS GENUINELY IMPRESSED US.  FS' ABILITY TO TURN A 
PROFIT (HOWEVER SMALL), AND TO REIN IN THE SIZE OF ITS LABOR 
FORCE, INDICATE THE POSITIVE DIRECTION OF ITALY'S ONLY 
PASSENGER-RAIL CARRIER.  THROUGH THE EVENTUAL COMPLETION OF 
THE HIGH-SPEED RAIL NETWORK, FS MAY SOON BE ABLE TO COMPETE 
 
                       CONFIDENTIAL 
 
                           CONFIDENTIAL     PTQ2637 
 
PAGE 01        ROME  02912  04 OF 04  141436Z 
ACTION EUR-00 
 
INFO  LOG-00   MFA-00   AF-00    AID-00   CEA-01   CIAE-00  CTME-00 
      DODE-00  DOTE-00  WHA-00   SRPP-00  DS-00    EAP-00   EB-00 
      EXIM-01  E-00     VC-00    FRB-00   H-01     TEDE-00  INR-00 
      IO-00    ITC-01   AC-01    NEA-00   NSAE-00  NSCE-00  OMB-01 
      OPIC-01  ACE-00   SP-00    SSO-00   SS-00    STR-00   TRSE-00 
      USIE-00  SA-00    DSCC-00  G-00     SAS-00     /007W 
                  ------------------BD3F4C  141438Z /38 
R 141500Z JUN 02 
FM AMEMBASSY ROME 
TO SECSTATE WASHDC 4224 
INFO EU MEMBER STATES COLLECTIVE 
AMCONSUL FLORENCE 
AMCONSUL MILAN 
AMCONSUL NAPLES 
DEPT OF COMMERCE WASHDC 
DEPT OF TRANSPORTATION WASHDC 
 
C O N F I D E N T I A L SECTION 04 OF 04 ROME 002912 
 
SIPDIS 
 
E.O. 12958: DECL: 06/05/2012 
TAGS: ELTN, KCIP, IT 
SUBJECT: ITALIAN RAILWAY LIBERALIZATION AND SECURITY 
 
MORE DIRECTLY WITH THE ITALIAN AIRLINES WHICH, PLAGUED BY 
DELAYS AND INCONVENIENCES, STAND TO LOSE PASSENGERS ALONG 
COVETED INTRA-ITALY LINKS LIKE THE MILAN - ROME BUSINESS RUN. 
 
                       CONFIDENTIAL 
 
PAGE 02        ROME  02912  04 OF 04  141436Z 
19. (SBU) A FULLY LIBERALIZED RAILWAY SECTOR AND AN ABILITY 
BY TRENITALIA TO COMPETE IN A TRULY OPEN MARKET ARE GOALS YET 
TO BE ACHIEVED.  ITALIAN LABOR UNION OPPOSITION TO 
LIBERALIZATION, AND THE ABILITY TO MAINTAIN PRESSURE ON THE 
GOI, ENSURE THAT THE MOST COSTLY INPUT INTO FS' BUSINESS 
EQUATION -- PERSONNEL -- WILL REMAIN A DRAG ON THE COMPANY'S 
PROFITABILITY AND THAT OF ITS HOLDINGS.  THIS IS TRUE FOR 
OTHERS WHO WILL ATTEMPT TO CHALLENGE TRENITALIA IN THE 
MARKET.  FOR THE FORESEEABLE FUTURE, THEREFORE, FS' HOLDINGS 
WILL REMAIN ITALY'S ONLY PASSENGER RAIL SERVICE PROVIDERS. 
 
20. (SBU) WE PLAN ON ATTENDING THE OCTOBER 2002 COLPOFER 
EVENT, WHICH COULD SERVE AS AN EXCELLENT FORUM IN WHICH TO 
ENGAGE THE GOI AND ITALIAN PRIVATE SECTOR ON RAILWAY SECURITY 
AND OTHER CRITICAL INFRASTRUCTURE ISSUES.  WE WILL ALSO 
INVESTIGATE THE POSSIBILITY OF ATTENDANCE BY WASHINGTON-BASED 
OFFICIALS, AND WOULD APPRECIATE HEARING FROM THOSE INTERESTED 
IN ATTENDING. 
SEMBLER 
 
                       CONFIDENTIAL 
 
> 
 2002ROME02912 - Classification: CONFIDENTIAL