Audit court slams France's private motorway operators

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In 2006, France introduced the total privatisation of three-quarters of its vast motorway network, leaving almost 9,000 kilometres under the management of three concession operators. A report this summer by the country’s national audit court, commissioned by a parliamentary finance commission, presents a damning picture of practices since the sell-off and calls for far tighter controls of the operators. Dan Israel reports.

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While the August holiday getaway remains a perennial nightmare for millions of French motorists, when the traditional monthly shutdown of swathes of industry results in gigantic nationwide traffic jams, there are some rubbing their hands in glee. For this is also the period when the operators of France’s privately-managed motorways – amounting to 8,891 kilometres in total – are making their biggest profits.

But the toll fees they impose and the services they provide have come in for sharp criticism from France’s national audit court, the Court of Accounts, which has found that the motorway operators appear to be fixing their own rules of profit and investment while the government has demonstrated itself incapable of bringing them to book for repeated irregularities.

The report by the Court of Accounts was commissioned by a parliamentary finance commission to review the practices of the operators since the privatization in 2006 of 75% of the French motorway system. Until then, the state held a controlling stake in the partly-privatised network.

The 2006 sale involved the granting of concessions to manage different sections of the network, and which went to three major companies: Vinci, the world’s largest construction group and concessions operator by revenue; Eiffage, one of France’s biggest construction groups, and transport infrastructure operator Sanef, which until then was the state’s private partner in the management of motorways in north and north-east France. They and their subsidiaries now manage almost all of the country’s motorway sections located outside of cities and towns.   

The Court of Accounts delivered its scathing report to the finance commission of the lower house, the National Assembly, in July. “Current conditions do not make it possible to guarantee that the interests of [motorway] users and those of the state are sufficiently taken into account,” it said, listing a series of recommendations to rein in the operators, including strict control by government of toll fee hikes, a cap on future toll increases, “tough penalties” for the non respect of contractual motorway maintenance requirements and a “systematic” counter review of investment plans announced by the operators (see the full text of the report immediately below).

In its own report based on the Court of Accounts findings, the National Assembly finance commission underlined that “it is primordial that the state rapidly reviews both the terms of the negotiations with the motorway concession companies […] and the appropriateness of certain investments.”

The commission’s expert on transport issues, socialist Member of Parliament (MP) Olivier Faure commented: “We are not in a war of religion between the private and public sectors, but the public powers must be re-armed in their relations with the motorway companies and make the balance of force favourable to users.”

“In 2006 we sold the family silver, and we’re deprived of very significant resources,” he added.

The motorway operating companies paid a total of just more than 13 billion euros for the concessions that will last, according to their different contracts, until between 2029 and 2032. That sum was equivalent to the turnover in toll fees paid by motorway users during the first two years of operations.

Between 2008 and 2011, the companies raised motorway toll fees by 10%, when the yearly turnover of takings climbed from 6.9 billion euros to 7.6 billion euros, far greater than the rise in inflation. The Court of Accounts found that between 2009 and 2012, operating companies belonging to Vinci and Eiffage continued regularly raising toll fees above the 1.6% average inflation rate for the period.

The motorway operating companies are legally allowed to yearly raise their toll fees by 70% of the annual inflation rate. Any hike above that figure must be justified by investments to improve the motorway network they manage, which must be set out in a detailed five-year plan submitted to government. All three companies met with government approval of their initial five-year plans, as did their second and current series of five-year plans, which has allowed them to apply what has been a constant, above-inflation rise in motorway toll fees.

“The state accepted a rise in toll fees in return for a large number of small investments from which the benefit to [motorway] users has not always been demonstrated,” noted the Court of Accounts.

Building work on the French motorway network is now almost complete and there are no major construction projects on the horizon. As a result, the investment plans submitted by the operators are limited to activities that include widening the vehicle parking capacity of motorway rest stops, building structures to contain traffic noise, or the development of ‘smart’ electronic payment systems (télépéage). Regarding the latter, the Court of Accounts noted that there was a legal confusion over the validity of this given that subscriptions for the ‘smart’ payment system may already include a charge for future development of the scheme.

The report also found that motorway operating companies that are subsidiaries of Vinci and Sanef had justified investment plans with projects that involved normal maintenance for which they were already held responsible under their concession contracts. “The legitimacy of the compensation [via a rise in toll fees] of [investment] plan contracts regarding certain investments is questionable,” wrote the Court of Accounts.  

The MPs sitting on the National Assembly finance commission underlined the opacity of the cost of projects outlined in the five-year investment plans - costs which are not updated after approval of the plans. Vinci and Eiffage, whose larger activities are based in the construction sector, systematically engage their own services to carry out motorway building work. “It is impossible to really know if what is billed corresponds with reality,” commented Olivier Faure. In all probability, a tender system for carrying out the work would introduce clarity and reduce the current announced costs.    

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