Having sold its motorway business in Italy, Atlantia is investing in smart traffic technology. This is to help drive development of cleaner transport and open up new markets such as the United States. Controlled by the Benetton family, the infrastructure group is seeking to finally put behind it a dispute triggered by the deadly collapse of a motorway bridge operated by its Autostrade per l’Italia business in Genoa in 2018.
After selling that business and has started using some of the 8 billion euro ($8.7 billion). In January, it bought Siemens Yunex Traffic division for 950 million euros. This move made it the only major motorway operator in Europe with a smart traffic business. Also, it has the opportunity to expand this business and consolidate a fragmented market. The company, which will update investors about its future strategy on March 11, sees the traffic technology business as important in its own right.
The value of any highway and airport business without technology is destined to fall. In 5-6 years, this could become another core business of Atlantia, as per the sources. Atlantia’s main operations are motorways, airports and digital toll payment company Telepass. The group controls Spanish highway operator Abertis, runs a series of airports in Italy and France. It has a 15% stake in channel tunnel operator Getlink and owns 51% of Telepass.
The group was scouting bolt-on technology opportunities like special purpose acquisition companies (SPACs) owned by private equity. Yunex will allow Atlantia to understand quickly the market in which it competes with around 300 other smart tech groups. Carmakers could be interesting partners given the clear synergies. Atlantia’s drive comes as governments around the world look to high tech to cut vehicle congestion and pollution to make big cities more liveable and businesses more efficient. The European Union’s pressure to cut emissions, has turned many European cities towards technology to optimise traffic flows.
Yunex, operates in more than 500 cities worldwide. It has developed a raft of services including a system where traffic lights, cameras and sensors relay data to a control room that crunches the data. This is to reduce congestion and accidents. In the western German city of Wiesbaden, a Yunex system introduced in November. This gives route and speed recommendations on digital roadside displays controlled by a traffic management centre. The Wiesbaden control room can manage flows to ease traffic jams on major roads. Atlantia said that in January it expected the Intelligent Transport Systems (ITS) market to grow at an average rate of 10% a year.
ITS technology will be needed to set up tolling systems. Also, it analyses and manage traffic volumes. The U.S. market is particularly interesting given the demand for innovation technology. This is to map connections between airports and highways. Yunex is already operating in U.S. cities like Boston and counties like Miami-Dade in Florida. Here, it provides its traffic management system. The business could offer double the returns of Atlantia’s traditional motorway concession business.
In Europe, Atlantia plans to replicate Yunex operations. This is by offering services to monitor urban traffic and manage highway intersections and tunnels. Getlink could become one of Yunex’s new customers. Atlantia, has not made any public statement on its intentions. In January, Atlantia said that it expected sales at Yunex. And, that is to reach 1 billion euros in the next five years. The shift to tech, includes Atlantia’s recent investment in electric air taxi maker Volocopter. This could also reduce the regulatory risk that is associated with the group’s portfolio of concession-based businesses. Following the bridge disaster, the regulatory risk is difficult to assess and manage.
