The government has asked the Council of State how it would be possible to shorten "by a few years" the duration of the concessions of some motorway companies, which have been more profitable than expected, said Wednesday the Minister of the Economy, Bruno Le Maire.

The Mayor admitted before the Finance and Sustainable Development Committees of the National Assembly that the profitability calculations for shareholders made during the privatization of highways in 2006 had "not been good".

As interest rates fell sharply, concession companies - notably Vinci, Eiffage and Spain's Abertis - were able to repay their investment at a lower cost, improving their profitability, while toll rates continued to rise steadily in accordance with contracts concluded with the State.

"Avoid any annuity"

"We were wrong," the minister acknowledged, before noting that the current rise in interest rates would probably force a redo in the calculations. "We will have to see the rate of return on the entire concession," he insisted. Wanting to "avoid any rent", Le Maire plans to "shorten the duration of concessions (...) by a few years." "This is the path that seems to us legally the most solid and economically promising," he added.

He announced the publication on Wednesday evening of a report by the General Inspectorate of Finance (IGF) of February 2021 – recently found by Le Canard enchaîné – which points to the profits made by ASF-Escota (Vinci) and AREE-Area (Eiffage), and goes so far as to evoke the possibility of a reduction in their toll rates of almost 60% to "realign (their) profitability" with what was planned in 2006.

Early end

The text, however, considers "legally possible" only a shortening of the duration of concessions, which according to its authors "presupposes a strong political will and would result in a deterioration of relations between the State and the SCAs", the motorway concession companies.

The report envisages an early end of the concessions on 30 April 2026 for ASF and Escota, i.e. a shortening of ten and five and a half years respectively, and on 30 September 2026 for APRR and Area, i.e. a shortening of nine and ten years.

The state would run "the risk that the judge would consider the profitability of concessions as reasonable and their early termination as entailing a right to compensation," the report said. Hence the referral to the Council of State.

Renationalisation excluded

The Minister Delegate for Transport, Clément Beaune, noted that the lawyers of the Royal Palace should also study "all fiscal options", the government intends to put the motorway companies to contribute to finance the announced effort on the rail. The Mayor also wants, as suggested by the Transport Regulatory Authority (ART), that the new contracts be shorter, and include "a clause to review toll rates according to the level of profitability".

The two ministers did not hide Wednesday their preference for a renewal of the current model of concessions - certainly arranged - Le Maire rejecting any renationalization of highways which according to him would cost between 40 and 50 billion euros to the taxpayer.

While the main current concessions, covering more than 90% of the motorways conceded, are due to expire between 2031 and 2036, Mr. Beaune announced the organization of "Assises des autoroutes" by the summer. "All questions will be asked about the future of concessions," he guaranteed.

  • Society
  • Bruno Le Maire
  • Motorway
  • Economy