In June 1918 the SNF decided to sell the Menaggio-Porlezza and Ponte Tresa-Luino railways and concentrate on operating steamboat services on Lake Lugano. The Società Varesina per le Imprese Elettriche (SVIE) at Varese agreed to purchase the railways, the legal formalities of which were completed in June 1919. The SVIE operated several 1100mm gauge tramways in the Varese area, including a 25 km line between Varese and Luino. The Ponte Tresa-Luino line was merged into the SVIE network and conversion to the SVIE 1100mm gauge and electrification (600v dc) was completed on 3 May 1924.
Map of the SVIE tramway network around Varese in the 1920/30s
The Menaggio-Porlezza line was remote from the rest of the SVIE network and the SVIE arranged for the creation of a separate company (the Società Anonima Prealpina di Trasporto [SPT]) which was jointly owned (one third each) by SVIE, Società Ferrovia Nord Milano (North Milan Railway Company) and the Commercial Bank of Milan. The SPT undertook to electrify the Menaggio-Porlezza railway, but this was never done.
The SPT was faced with numerous problems from the outset. Tourist traffic was slow to return to the region after the war and increasing competition from road transport meant the number of passengers carried on the railway never returned to the pre-1914 levels. By the early 1920s the track and rolling stock needed a lot of maintenance and the locomotives were getting old and worn. The price of coal increased sharply in 1921 with repercussions on the operating expenses. A reduction in the number of staff employed followed.
By 1927 the journey between Menaggio and Porlezza was 10 minutes faster and 5% cheaper by motor coach. The railway had increasing losses each year after 1927 and in March 1932 an unsuccessful proposal was made to close the railway. A combination of the economic depression of the period and competition from road transport saw passenger numbers decline. The number of passengers carried in the years 1930 to 1932 were 133,616, 117,489 and 97,975 respectively. The situation became worse in 1935 with the completion of the final section of sealed road between Menaggio and Lugano. Also, the shortage of coal meant peat had to be used for fuel, increasing the operating costs further.
Losses continued and government approval was given to close the Menaggio-Porlezza Railway from 1 November 1939. This, however, was not quite the end of the Railway's history.
Liquidation of the SPT and sale of the track and buildings was delayed by Italy's entry into the Second World War in June 1940. In 1946, in order to encourage a return of tourists to the region, attempts were made by a number of local citizens to have the line re-opened, electrified and extended at the Menaggio end as far as the Villa Carlotta and Tremezzo. After 15 years of planning and debate, the government eventually refused to support the proposal and the delayed disposal of the track and buildings was finally completed in 1966.
The Ponte Tresa-Luino line was closed on 3 September 1948. The remainder of the SVIE tramway network around Varese was closed by 1955.