On 19 October 2023, the Court of Justice handed down its judgment in Case C‑186/22, Sad Trasporto Locale SpA v Provincia autonoma di Bolzano, on the interpretation of Article 1(2) of Regulation (EC) No 1370/2007 and of Article 107(1) of the Treaty on the Functioning of the European Union (TFEU). The request has been made in proceedings between Sad Trasporto Locale SpA (“Sad”) and the Provincia autonoma di Bolzano (Autonomous Province of Bolzano) regarding the direct award, to an internal operator, by means of a concession, of a public passenger transport service on certain rail and cableway networks to Strutture Trasporto Alto Adige SpA A.G. (“STA”).

By two decisions of 30 December 1991 and 15 June 2001, the effects of which were extended until 19 March 2021, the Autonomous Province of Bolzano assigned to Sad the management of local public transport services, comprising funicular railway, cableway and tramway fixed installations. Such services were then awarded internally by the latter to STA, a company the entire share capital of which is owned by Sad, from 19 May 2021 to 30 April 2030. At a later time, the Autonomous Province of Bolzano, on the one hand, approved a public service contract providing for the payment of a contractual fee to STA and the business plan concerning its relationship with the latter and, on the other hand, required Sad to continue to provide transport services until STA became responsible for them.

Sad, therefore, brought an action for annulment before the Tribunale Regionale di Giustizia Amministrativa del Trentino Alto Adige, Sezione autonoma di Bolzano (Regional Administrative Court of Trentino Alto Adige, Autonomous Section of Bolzano) of the two Decisions and related measures, including the report relating to the internal award, the service contract in question and the corresponding business plan. Since, however, its action was dismissed, Sad appealed to the Consiglio di Stato (Council of State; the “referring court”) which, in light of the need to interpret the relevant European legislation, decided to stay the proceedings and to the Court of Justice whether Article 1(2) of Regulation No 1370/2007 must be interpreted as precluding the application of that regulation to a mixed service contract for multimodal public passenger transport services, comprising transport by tramway, funicular railway and cableway, even in a context where track-based transport accounts for the majority of the transport services in respect of which management has been awarded.

According to the Court, by the terms “transport services by rail and other track-based modes” Regulation 1370/2007 intended to target modes of transport characterised by the movement of vehicles on a single track or several parallel tracks. Therefore, it does not apply neither to a mode of transport such as cable car nor to mixed contracts including forms of transport other than those provided for in its Article 1(2), including where track-based transport accounts for more than 50% of the contract in question.

Marco Stillo