How we got there: some facts and simple ideas about the French transportation policy

National Conference of State LegislaturesNew Orleans, Louisiana, July 24, 2008

Sebastien GOURGOUILLATTransportation and Construction AttachéEmbassy of France in the USAsebastien.gourgouillat@missioneco.org

342 000 sq. miles63 millions inhabitants

22 regions,96 departments36600 communes

1 150 miles of high speed lines5 500 miles of highways200 public transit networks

30 millions cars, 440 TGVs

France (= size of Texas)

The railnetwork

The rail network

24000 miles conventional, 1150 miles HSLConventional network built mainly in the XIXth century by private companies… became public in 1937HSL network since 1981 (studies 1968)– 100 million passengers per year– 1+ billion euros of operating profit in 2007– Dominant mode for collective passenger

transportation (up to 80% market share under 3 hours trip)

– Upgrades and European network underway

TGV yearly traffic growth 1981-2006

0100002000030000400005000060000700008000090000

100000

198119831985198719

891991199319951997199

920

01200320052007

Years

Thou

sand

s pa

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gers

thalyseurostarnord-Europeintersecteuratlantiquesud est

The French high speed rail: the reasons of its success

Technical options : a whole new system, new lines dedicated to passenger service, high connectivity to the conventional network, high frequency and comprehensive schedules, interoperabilityCost control in building and operation, start with the most profitable linksTechnology : significant world records (327 MPH in 2007, 1250 miles over 310 MPH, 663 miles in 3h29 in 2001Safe, environmentally and community friendlyGood project management organization

Number of people killed by billion passenger.mile

Land requirements are smaller

A flexible design

TGV is landscape-friendly

Intermodality : airport connections and TOD

Institutional organization of rail in France (‘97)

Government (DOT)

Control and regulation authority

Infrastructure owner and operator (RFF+SNCF management contract)

Trains owner and operator (SNCF)

Infrastructure charges / access fees

Improvement / development

Maintenance

Timetables

Capacity allocation

Traffic control

Trains ownership, operation and maintenance

Stations ownership, operation and maintenance

Commercial activity / customers relations

Freight / passengers, long / short haul

Access fees

Nothing but a dream : the prospective 2020 worldwide map

The highwaynetwork

The highway network

A 5 500 miles toll highway network, 40% of the total trafficConstruction started 1955 under concessioncontracts with five “historical” companies– Limited social/labor concern

Since 1992 : European regulation introduced a competitive process for procurement– Financial, technical and delivery optimization

Usually 50-60 years contracts, until 78 years (Millau viaduct)– Traffic forecasts and contract terms are key issues

Upgrading the transportation systems:simple ideas

Political– Transportation systems as a major support to economic

growth: a post-WWII but still important idea– A big political leadership to improvement programs:

from C. De Gaulle to N. SarkozyTechnical– An integrated system : rail and roads as complements,

with intermodal facilities, a hierarchical networks– Concessions into a global master plan

Economic and Financial– A progressive development, starting with the most

profitable links– Private funding within respect of the public interest– Financial accountability

The funding issue

A post WWII starting point: different context on public investment!Another look on energy issues in France (the “TIPP”)A different fiscal structure:

The general fiscal year budget:

Mixes all incomes

Income tax

Gas tax

Business tax

Every national tax

Education

Army

Health

And so forth…

Transportation

How did we get there ? New financing concepts

PPPs : A long tradition for financing major infrastructures in FranceWithout concessions, no highways in FrancePPPs now for railways as well– Upcoming years: 3 HSL+ being built at the same time

Basic principles:– The user must be the payer– The contract terms must help assuring the public

interest– A win-win deal

To start, focus on profitable businesses (SNCF long haul division, trunk highways)PPPs rely on availability, experience and willingness of private investors

PPPs in France : other fields

Public transit : 108 network out of 200 operated by the private sectorBridges and tunnels : Millau, Mont Blanc…Public facilities: stadiumsairportssea portsPublic buildings : prisons (new 1.4 bEurosprogram underway)Water supply (80%) and sanitation (55%)Waste management (>90%)Energy

XXIth Century : a new ecological focus

New political and administrative principlesA large public overview of every public policy:– The so called “Grenelle de l’Environnement”

Transportation outcomes:– A 1200 miles, 40 billion euros upgrade of the HSR

network by 2020-2025– Priority given to public transport: over 900 miles of

new bus routes, streetcar lines and cycle lines– A financial eco-tag incentive & development of

green vehicles– Developing rail and sea motorways– Ecotax based on mileage for trucks

PPPs will be more than ever useful– An experience still to be improved

un ministère nouveau aux vastes missions

MINISTÈRE DE L’ÉCOLOGIE, DU DÉVELOPPEMENT ET DE L’AMÉNAGEMENT DURABLES

State Minister

Junior ministerFor Transportation

Junior minister forEcology

Ministry of transportation,

construction and land planning

Ministry of Ecology and sustainable

development General planning Authority

Energy Administration

+

Mr Jean-Louis BORLOO

Mr Dominique BUSSEREAU

Ms Nathalie KOSCIUSKO-MORIZET

Ministry For ecology, sustainable land planning and development

+ +

Join us in San Diego, october 8

APTA Expo – FTA sponsored

Thank You !

Sébastien GourgouillatTransportation and Construction Attaché

Embassy of France in the USASebastien.gourgouillat@missioneco.org

The concession model

The public authority entrusts a private partner to design, finance (even partly), build, operate and maintain the systemThe partner gets tolls from the user: its revenue is narrowly related to the provided serviceThe system remains publicly owned and regulated (level of service, price, safety, accountability)The private partner assumes all the operating risks (ridership, quality of service) but has a right to a balanced contractRisk allocation and performance goals specified by contractThe public authority remains the latest guaranteeThe (limited) duration of the contract is determined by the public authority, depending on the time requested to pay the investmentoff and on the service provided (Heavy maintenance, upgrades…)If a public investment is needed to balance the contract, it must be predefined and inclusive. The global financial equation must allow a “reasonable” profitability

Recent examples of PPP: highwaysA41 highway

– 20 km in the northern Alps inc. 3-kilometers tunnel and 4 viaducts. – 871 million euros 100% financed by private equity. 80% is debt and 20% own equity. – 55-year concession with AREA (historical highway operator) and Bouygues.– Contract signed on October 2005. Opening 2008.

Millau viaduct– a 2460 meters-long, 245 meters-high bridge completing the 3rd north-south highway

axle in France.– 400 million euros financed by the private partner.– 78-year concession with Eiffage, the 3rd French contractor.– Full fare is about 6 euros for cars.– Contract signed in august 2001. Opened to traffic at the beginning of 2005

A86 Paris super-ring– Two tunnels (10 and 7.5 km) completing the A86 super-ring in Western Paris. – 1700 million euros financed 100% by the partner Cofiroute. – 70-year concession – Toll fares are changing during the day under the principle of congestion-pricing.– Contract signed in 1999. 1st section opening to traffic in 2008.

Recent examples of PPP: railwaysLGV Sud-Europe Atlantique (South East Atlantic High Speed Line)

– 300 kilometers from Tours (240 km Southwest from Paris) to Bordeaux.– Paris-Bordeaux: 2 hours and 5 minutes instead of 3 hours– 7.2 billion euros, opening 2015, with public subsidy.– 40 years + concession (design, build, maintain and finance at its own risks).

Charles de Gaulle Express link– 32-kilometer fast rail link between the centre of Paris and Charles de Gaulle

International Airport. – 640 million euros (120 for the rolling stock). 100% financed by the private

partner (use of existing right of way, expected high profitability).– 40 years + total concession. – RFI in July 2006, construction to begin in 2008, operation starting in 2012.

New cross-border HSL Perpignan-Barcelona (Spain)– 45-kilometer new high speed rail way crossing the Pyrenees.– Paris-Barcelona 5h and 30 minutes since 2009 (9h+ today).– 952 million euros (60% States, 40% private partner).– a 50-year concession granted to a Franco-Spanish venture.– Operation starting 2009.