Italian police seizes Caronte & Tourist ferries on charges of public corruption

   June 9, 2023 ,   Cruise Industry

Earlier this week, Italian authorities took action against the ferry company Caronte & Tourist (serving domestic routes to/from Italy's Sicily Island), seizing its vessels and assets due to allegations of public corruption. This marks the second time in three years that Caronte & Tourist and its senior executives have faced such accusations. The charges stem from their successful bid in 2016 to secure government subsidies for maintaining ferry services in the Strait of Messina, which connects Sicily and Calabria, as well as to the outlying islands.

Italian media reports state that officers from the Guardia di Finanza, responsible for financial crime, conducted the raids on June 6. Three RoPax ferries, namely Ulisse, Helga, and Bridge, were impounded and ordered to remain docked during the investigation. These vessels are vital for transporting goods and residents to the outlying islands, with Helga operating between Palermo and Ustica, Bridge servicing the Aeolian Islands, and Ulisse recently being used for transportation between Palermo and Ustica.

In addition to the ships, the court also froze nearly EUR 30 million held in the company's bank accounts. The judge in Palermo issued a decree stating that these assets would be held during the preliminary investigation of public fraud. Furthermore, four senior executives of the company have been implicated in the investigation.

Caronte & Tourist won a tender in 2016 to provide various Sicily-based ferry services. While many of these services are not profitable during the winter months, they are essential for transporting goods and residents. As it is considered a vital transportation service, Italy is permitted by the European Union to subsidize the operator. The government provides a subsidy to cover the operational costs that are not met by the revenues.

As part of the tender, the company was required to ensure that its vessels were accessible for physically challenged individuals, including those with reduced mobility. Prosecutors allege that the vessels do not meet the accessibility standards outlined in the tender and safety requirements. They further argue that the company engaged in fraudulent activities by failing to upgrade the ships to meet the necessary standards.

Government officials are working to minimize disruptions to transportation services following the seizure. Although the routes experience low volumes during the winter months, the ships are busy during the summer travel season, which is commencing in Italy.

Caronte & Tourist Group, formed through the merger of two companies in 2001, has been in operation for two decades. They claim to transport approximately five million people annually and have also acquired another Sicilian ferry company, Siremar.

The company faced similar allegations in 2020, resulting in the suspension of three vessels and the freezing of assets. In 2021, it was placed under judicial administration on charges of mafia infiltration. According to Italy's anti-mafia police, a notorious Sicilian family had allegedly gained control of the company's management and used their positions to award contracts to mafia-controlled companies for various services on the ferries, including catering, cleaning, and ticket booking.

Caronte & Tourist currently holds a monopoly on the routes in the Strait of Messina and from Sicily due to its government contract.