Italy has suspended the tenders for the Turin-Lyon high-speed rail project after differences over the project escalated within the ruling coalition.
Italian Prime Minister Giuseppe Conte said that the government has asked the project developer TELT to suspend the tenders scheduled to be launched this week.
The government will now completely re-discuss the project.
Commonly known as TAV link, the Turin-Lyon high-speed rail project has been a cause of dispute between the ruling League party and its coalition partner the 5-Star Movement.
The project is opposed by the 5-Star Movement due to its high costs. It advocates that the Italian share should be utilised in rehabilitating existing infrastructures.
The opposition increased after a recent report commissioned by the Italian government found that the project will not be profitable. The report stated that the project would result in a loss of around €7bn by 2059.
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According to Italy’s transport minister Danilo Toninelli, the project is estimated to cost more than €20bn. The European Union (EU) is expected to share 40% of the costs, while Italy will contribute 35% and France will provide 25% of the total amount.
However, the EU has proposed to increase its contribution to 50%, while the remaining half will be equally shared between France and Italy.
With the tenders now suspended, Italy will discuss with the French Government and EU over the feasibility of the rail project.
The high-speed rail link may lose up to €300m if the tenders are not launched by the end of this month.
Overall, the 270km route is scheduled to connect the Italian city of Turin with Lyon in France through the Alps mountain range.