UPDATE 1-Italy council issues ruling against Acea privatisation plan

Tue Jul 24, 2012 1:28pm EDT

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(Adds mayor's comment)

ROME, July 24 (Reuters) - The Italian Council of State upheld an appeal against plans to privatise utility company Acea, ruling that the Rome city administration had failed to respect the opposition's right to be consulted in approving the sale.

The Rome city government, which wants to cut the city's 51 percent stake in the local utility to 30 percent, had sought to accelerate the sale despite hundreds of opposition amendments intended to hamper the deal.

The ruling did not go into the merits or otherwise of the intended privatisation, but said proper procedures had not been observed.

"The deliberate obstruction by the opposition, which was clear in the current case, should be overcome by other procedural measures which do not conflict with local authority regulation," the court, which oversees the public administration, said in a statement.

The decision is a blow to the mayor of Rome, Gianni Alemanno, who like other cash-strapped city leaders is scrambling to make up a shortfall in revenue following big cuts in transfers from the central government.

He said the decision would deprive the city of as much as 200 million euros for investment and 20 million for current spending. "This is a decision which will block our city," he said in a video message posted on his personal blog. (Reporting by Stefano Bernabei and Naomi O'Leary; Editing by David Holmes)

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