Activities

The HERMES (Higher Education and Research on Mobility Regulation and the Economics of Local Services) research center promotes high quality research and sustains post-graduate education on the themes of law and economics of local public transport and regulated services. The initial activities of HERMES concerned the study of legal and economic problems connected with the Local Public Transport (LPT) reform started with Law 549/95 and Legislative Directives 422/97 and 400/99, and implemented through regional laws. The first studies embraced a series of topics which can be summarized as follows:

- technology, cost structure and production efficiency;
- tender procedures, subsidy policies and incentive mechanisms;
- demand analysis and tariff integration;
- evolution of local level regulation and legislative discipline concerning labour contracts.

HERMES has subsequently expanded its field of analysis to study other regulated sectors similar to TPL: energy (gas and electricity), water services and environmental services (waste collection and treatment). Many public utilities have already been active for some time in several network services and new multi-product companies are appearing following the liberalization process of public services. The study of economic and technological links among different activities (e.g. cross-subsidization, scope economies), and of the aspects which are common to different utility services are therefore useful in evaluating the future market structures, the strategic conduct of the operators and the repercussions on users in terms of tariff levels and quality of the services. To this respect, the 2002 Financial Law is particularly relevant, in that it provides for all local public services:

- the separation between network ownership and service management;
- the resort to tender procedures for all services with industrial characteristics;
- the need to privatize for those companies which intend to participate in the bidding.

The liberalization process of public utilities is not confined to Italy but embraces all European countries. The aim is to create a single European market for energy, environmental, water, transport and telecommunications services, thus giving concrete life to the idea of a "European consumer". The future research themes of HERMES then naturally will be extended to analyse how the above cited issues are taken in other European countries. Comparative studies can in fact be useful to critically analyse the evolution of the institutional and regulatory framework in our country.