Transcript Les “Local Authorities” aux Etats-Unis
Public private partnerships: French and European cases
Wagner School, Rudin Center, NYU New York City, March 25, 2008
Sebastien GOURGOUILLAT Transportation and Construction Attaché Embassy of France in the USA [email protected]
Outline of the presentation
PPPs in France: historical and modern examples in transportation
Main frameworks and key issues
Enlarging the focus:
– PPPs outside the transportation field – European examples
France
(= Texas)
550 000 km² - 342 000 sq. miles 63 millions inhabitants 22 regions 96 departments 36600 municipalities 30 millions cars 6 millions trucks
1/3 -French PPPs in transportation
A very long tradition of PPPs in France
Canal de Craponne (Southeast) : 1554 Canal du Midi (Southwest) : 1666
Main rail network development in the XIX
th
century through PPPs
1832-1870
10 600 miles
By private companies, with State regulation… and many State engineers !
Private companies merged in a national publicly owned company (SNCF) in 1937
Since 1955: The building of a 5000 mile , high-quality highway network through PPPs (concession)
75%
of the French highways are toll highways
Urban public transportation A major field for PPPs 108 38 53 1 Networks 0.8 0.4 0.5 16 600 8 000 9 700 4.7 58 600 0.4 Turnover Billion Euros 4 700 Employees
Private sector Public sector Mixed
Since 2006:
rail PPPs,
an opportunity for HSR
In the upcoming years, RFF will build at least 3 HSLs at the same time Constraint on public spendings Availability of private capital Historical practices of PPP Public support remains necessary for rail infrastructure
HSL Britany HSL SEA 2013-2016 HSL EE 2007 HSL RR 2011 L N.M. by pass 2012
Recent examples of PPP: railways
LGV 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 a part of public investment.
– 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.
2/3 - PPP schemes and key issues
(Almost) every country faces the same dilemma !
Urgent need for infrastructures and services :
– Congestion, delays – Pollution – Economic competitiveness…
But :
– Limited public funding – No political will to raise taxes…
Find the money where it is, but with respect of the public interest PPPs :
– decision of balance between tax and users’ money – Allow innovation and add competition – The public authority keeps the control but lifts the stress on its budget and benefits from the performance of the private sector (time and money saving)
The concession model
The public authority entrusts by contract a private partner to
design, finance (even partly), build, operate and maintain
the system The partner’s revenue directly
depends on the incomes
of the service provided (gets
tolls
from the user) The system remains
publicly owned and regulated
(level of service, price, safety, accountability) The private partner assumes the
operating risks
but has a right to a balanced contract : risk related to ridership, quality of service and dynamic of revenues from users (“customers”)
Risk allocation
and performance goals are specified by the
contract
The public authority remains the latest
guarantee
The (limited) duration of the contract is determined by the public authority, depending on the time requested to pay the investment off In case of a public subsidy, this one must be predefined and
inclusive
.
A “
reasonable
” profitability (balance between public money and private financial management)
The shadow toll model
Created to face the cases where perceiving a toll is impossible or inefficient The public authority pays a lease which level depends to the quality of service Risk is technical more than commercial : the private partner’s income is related to the efficiency of operations The public effort is spread on the whole contract duration
Rail PPPs
Partnership contracts or concessions Consortia that include civil engineering, rolling stock manufacturer, operator, bank 3 types: Infrastructure only, Operations and maintenance only and Infra + operations The contract includes four major phases: Precise definition of the object, preparation of the terms of reference Design and building of the infrastructure and the rolling stock, Operation and maintenance Transfer to the public authority The operator’s role: important since the beginning
Lessons learnt about risk Management
The public authority must elaborate a good project
Enlarging the focus
European examples
The “Chunnel”:
The channel tunnel: the concession
7 years of works without revenue Fast financial worsening : risk of bankruptcy in 1997.
The Barcelona light rail: a typical PPP project
Barcelona: main feedbacks
A lot of
changes at the early stage:
was not granted for the whole system before design was initiated political support Once a consensus was achieved, very efficient and fast construction and commissioning No problems with unions ; decision to appoint and train
new and young drivers.
Importance of the use of
proven technology
The efficiency of the
system integrator
(Alstom) was a key factor Cooperation between the Operator and the Municipality has been an asset
PPPs Project Operated by French Companies around the world – Airports Management
Airports Management in Phnom-Penh (Cambodia), Abidjan (Ivory Cost)
PPPs Project Operated by French Companies around the world – Bridges, tunnels, highways
Rion-Antirion Bridge in Greece Vasco de Gama Bridge on the Tagus River in Lisbon (Portugal) - 7.5 Miles Confederation Bridge between the continent and Prince Edward’s Island (Canada) – 8 Miles Millau bridge, tunnels in the Alps (France) SR 91 in Orange County, CA
PPPs can be useful in many fields of public interest
Water and Sanitation in France
80% 55%
Private sector Public sector
45% 20% Drinking Water Sanitation
% of the population
Waste Management in France
60% 92% 40% 8% Collection Treatment
Private sector Public sector
% of the population
Energy in France
14% 20% 86% 80% 90%
Private sector Public sector Electricity Gas
10%
Heating
Thank You !
Sébastien Gourgouillat
Transportation and Construction Attaché Embassy of France in the USA