The Italian Ministry of Transport said in a report Tuesday that France's rail links with Italy would waste public funds and have a "strong negative" financial impact, which would exacerbate tensions within the coalition.
Work has begun in a 58-kilometer (36-mile) tunnel across the Alps, estimated to cost 8.6 billion euros ($9.7 billion), and France and the European Union will join Italy in joining the bill.
The Italian Ministry of Transport said that the entire railway link was supported by the ruling coalition party, but was strongly opposed by the five-star movement, a government partner, whose price exceeded 20 billion euros.
The 79-page cost-benefit analysis estimates the negative balance between the cost of building the so-called TAV route and its expected economic returns to be 7.7-7.8 billion euros ($790-880 million).
"As everyone can see now, the amount of economic and transport analysis is extremely negative," said Danilo Toninelli, Minister of Transport, a five-star politician entrusted with controversial reports.
"It's up to the government to decide now."
The far-right coalition says the links between Lyon and Turin are crucial to Italy's export-oriented economy. There was no immediate comment on Tuesday.
Five Stars has repeatedly said that it will never approve the project while it is still in power. Coalition leader Matteo Salvini proposed a referendum to decide the matter.
Close the railway
Another analysis released by the Italian Ministry of Transport predicts that a possible contract penalty could cost up to 1.3 billion euros to suspend this phase of work.
France agreed in December to freeze new tunneling contracts until the Italian government, which took office last June, completed its cost-benefit analysis.
Relations between Paris and Rome have deteriorated since then. President Emmanuel Macron recalled last week that French ambassadors in Rome, after a spat with the Alliance and the Five-Star Alliance, accused Paris of undermining Italy's economic, foreign and immigration policies.
France and Italy are the second largest trading partners and business leaders on both sides of the Alps, saying that TAV will promote business development.
There is also a dispute between Rome and the European Commission over its budget expansion plan for 2019. However, Toninelli said the controversy had nothing to do with TAV analysis.
"I want to emphasize that the negative assessment of the Turin-Lyon links generated by this analysis is not directed at the EU or France," he said.
Stefano Bernabei and Giselda Vagnoni; written by Crispian Balmer; edited by Alexander Smith
Hot Model No.: