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November the 13th, 2008 ROAD PRICING IN FRANCE ONTARIO’S ROAD PRICING FORUM Toronto, ON, CANADA Nicolas MERY Road concessions contract manager General Direction for Infrastructure, Transport and The Sea Ministry for Ecology, Energy, Sustainable Development & Regional Planning

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ROAD PRICING IN FRANCE

ONTARIO’S ROAD PRICING FORUM

Toronto, ON, CANADA

Nicolas MERYRoad concessions contract manager

General Direction for Infrastructure, Transport and The Sea

Ministry for Ecology, Energy,

Sustainable Development & Regional Planning

WWW.developpement-durable.gouv.fr


Summary l.jpg

Toronto Road Pricing Forum

1 - French experience of toll concessions and PPPs

3

1.1 - Historical overview of the French concession system

4

1.2 – New PPP contracts

11

2 - Road pricing practices on toll motorways in France

13

2.1 - General principles of road pricing on toll motorways in France

14

2.2 - Variable tolling experimentations

19

3 - Looking to the future

24

Summary


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1 - French experience of toll concessions and PPPs


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1.1 – Historical overview of the French concession system

  • Motorway network in France : 11,000 km, of which 8,500 km are conceded to private parties.

Free Urban Motorways

National Gov. Operated

11%

Free Intercity Motorways

National Gov. Operated

14%

Privately operated Toll Motorways

75%


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1.1 – Historical overview of the French concession system

  • Currently under construction :

  • ARCOUR (A19)

  • ADELAC (A41)


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1.1 – Historical overview of the French concession system

  • Role of the State in toll road concessions :

    - The State owns the National Motorway System including the toll highways.

    - The State has power to realize road concession within the main transportation network.

    -The State monitors the execution and issue authorisation to commission motorways.

  • Type of PPP and risk allocation :

    - Road concessionaire is vested with rights and duties of the State according to DBFOM(*) formula of the infrastructure.

    - Road concessionaire is responsible for all risk and perils of the concession (including risk linked to traffic).

    • Contractual framework :

      - Global concession contract.

      - 5 years-term objective contract

(*) : Design, Build, Finance, Operate and Maintain.


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1.1 – Historical overview of the French concession system

  • The main motorway policy in France was established in 1955.

  • A historical system called “Adossement” :

    - Any new motorway section was automatically granted to the local “concessionnaire” : local monopolistic companies.

    -Construction of new sections was financed by revenues from stretches already in operation : cross- subzidation process.

    • A successful mechanism, but a practice inconsistent with the principles of fairness and equality.


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1.1 – Historical overview of the French concession system

  • A new way of awarding concessions since :

    - The European “public work directive” of 1991 : awarding of motorway concession is subject to obligation of prior publication and respect of equality between candidates

    - Law « Sapin » of 1993 : any new section must be economically viable on its own.

    • This has led to greater transparencyand greater competitiveness.5 new sections have been succesfully awarded: A28, the Millau Viaduct, A41,A19,A65.

The Millau viaduct has been conceded to CEVM in 2003. It has been financed solely on private funds. It is the highest motorway viaduct in the world (343m).


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1.1 – Historical overview of the French concession system

  • Privatizationof the “historical” highway operators early 2006 :

    • Cofiroute and ASF-ESCOTA : Vinci.

    • SANEF-SAPN : Abertis 53% - CDC 15% - Predica 12% - Axa 10%

    • APRR-AREA : Eiffage 37% – Macquarie 37% - Lagrummet December EU 10% - Elliott Management 10%.

    • CEVM : Eiffage.

    • ALIS : IXIS CIB 26% - Bouygues 15% - HBOS UBERIOR 13%.

    • A’lienor : 65% Eiffage - 35 % Sanef.

  • Other are national or local authorities owned company :

    • Tancarville and Normandy Bridge : Normandy chamber of commerce.

    • Tunnels ATMB & SFTRF : French and Italian National Govs.


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1997

1980

1970

1960

1.1 – Historical overview of the French concession system

motorways

Of wich

Conceded

motorways


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1.2 – New PPP contracts

  • A new type of PPP to experiment : the partnership contract defined in the new french ordinance of June 17th 2004.

  • A new way to subsidize the private partner : throughout the contract life cycle and not only during the construction phase.

  • The ordinance is restrictive. It requires an evaluation is compulsory to show that the contract is more beneficial than classic public procurement on the basis of 2 criterions:

  • After this preliminary phase, negociations start with local authorities involved in the project to share the financial burden.

complexity or urgency

www.ppp.bercy.gouv.fr


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1.2 – New PPP contracts

Road projects selected by the Government as potential road PPPs in October 2005 :

  • Delinking of A4 and A86 motorways in the South East of Paris

  • Widening of RN88 between Albi and the A75 motorway (would include already widened sections, long scheme: 133 km)

  • L2 part of Marseilles ringroad

  • LEO part of Avignon ringroad

Preliminary evaluation process achieved

Preliminary evaluation process in progress


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2 – Road pricing practices in France


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2.1 - General principles of road pricing in France

  • Prices are defined in the concession contract.

  • Dominating “user-pays-for-use-policy” : each network is subdivised in elemental section. Those section (usually 100 to 200 km long) have an imposed Price-per-kilometer (PKM).

  • Modulation is possible within each section but cannot exceed +/- 20% of this PKM.


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2.1 - General principles of road pricing in France

  • PKM depends on the type of vehicule. 3 Criterion : height - weight -number of axle :

    - Class 1 : cars

    - Class 2 : trailers

    - Class 3 : HGVs with less than 3 axle

    - Class 4 : HGVs with 3 axle or more

    - Class 5 : motos

  • PKM between class is defined by a coefficient.


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2.1 - General principles of road pricing in France

  • Prices are fixed per the Ministry of Ecology, Energy, Sustainable Development and Spatial Planning. The Direction of transportation infrastructures is responsible for the regulation of road concessions granted by the national government

  • Prices evolution is based on the inflation :

  • However, in the case of additional investment (enlargement for example, especially for the large historical concessions for which the network is several hundred kilometers long), 5 year-term objective contracts are negotiated and could have an impact on toll charges.


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2.1 - General principles of road pricing in France

  • Means of payment used (year 2007) :


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2.1 - General principles of road pricing in France

  • Electronic toll collection (ETC) on the french motorway network is now present on more than 3,000 specific lanes. It ease the the flow of the trafic at toll plaza.

  • « Liber-T » for car, motorbikes and trailers :

    - 2,144,000 pass holders ;

    - 320 M of transactions ;

    - 167 transaction / pass /year.

  • TIS-PL for HGVs :

    • - 465,000 pass ;

    • - 19.2 M of transactions

  • ETC spreads all over the motorway network.

    But legislation does not give the opportunity to remove barriers from the toll plaza.


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    2.2 - Variable tolling systems

    • The contractual framework gives the mean to concessionnaries to experiment variable tolling system in order to ease the flow of trafic and therefore improve the service given to users.

    • General principles :

      - Limited in time and space.

      - Revenues should be even.

    • 2 existing operations on the french motorway network


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    2.2 - Variable tolling systems

    • Operator : Sanef.

    • Opened in 1967.

    • Length 211km.

    • Regular fare (Lille / Paris) :

      - Car : 13.80€

      - HGVs : 40.70€

    A1 (Autoroute du Nord) links Paris to Lille and Northern Europe.

    Most frequented motorway in France (3M of transaction – 90.000 veh/day on the Paris suburbs section )


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    2.2 - Variable tolling systems

    • The 1st french operation of variable tolling system has been put in place on the A1 in 1992.

    • Aim : ease trafic peak on sundays night.

    • Two periods :

      - « Green » : 2.30PM to 4.30PM with a 25% discount on the regular fare.

      - « Red » : 8.30PM to 11.30 PM , price increase to 25%.

    • A successful measure:

      - stability of this system.

      - trafic report are estimated up to 10 % (2.000 veh. per « red » period).


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    2.2 - Variable tolling systems

    • A 14 Orgeval / Paris

      - The A14 motroway is the only urban toll motorway in Ile-de- France. It links the buisines district of La Defense to the west surbubs of Paris ;

      - It supports a commuting traffic and is exposed to congestion on peak hours (8.000 veh/hours).

    • Length : 15.6 km

    • Cost of construction : 690 M€

    • Open in 1996

    • Operator : SAPN


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    2.2 - Variable tolling systems

    • In order to fight the congestion phenomena, an incentive measure has been put in place. Since 1998, price of the infrastructure are modulated depending on the time of the trip.

    • A distinction has been made between peak hours (6.00 to 10.00 AM and 4.00 PM to 8.00 PM) and slack periods.

    • Gap between the 2 rates has been widened up to 30%, in order to reinforce the efficiency of the measure

      - Cars : 7.10 €, reduced to 5€ between 10 AM to 4PM and 8PM to 6AM – Monday to Friday.

      - HGVs : 33.60 € reduced to 23.70 € between 10 AM to 4PM and 8PM to 6AM – Monday to Friday.

      - Free for carpoolers (at least 3 persons in the vehicule).

    • Trafic switch are estimated between 2 and 4 %.


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    3 – Looking to the future


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    3 – Looking to the future

    A nation-wide forum, the so-called “Grenelle for the Environment”, was initiated by the government between July and October 2007.

    The law voted at first reading on October the 21st, 2008, define key points of governemental policy on ecological and sustainable developpement issues for the next 5 years.

    Web site : www.legrenelle-environnement.fr

    The Minister of State, Mr BORLOO, on october the 21st, 2008.


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    3 – Looking to the future

    • The goal for road infrastructure is to improve its environmental performances by :

      - Reducing gaz emission linked to transportation.

      - Developping a comprehensive and multimodal approach.

    • Incentives mesures :

      - Non stop tolls and variable tolls experimentation on conceded highways.

      - Creation of “Ecotax” based on mileage payable for HGVs using the non-concessionary network.


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    3 – Looking to the future

    • Contractual framework allowed the State to ask operators to conduct :

      - Design new variable tolling experimentation.

      - Free flow experimentations on their tolling system.

    • Design new variable tolling experimentation

      - Aim is to reduce congestion.

      - Revenues must be even.

      - Experimentation have to be conducted on significant scales.

      - Conclusions of the on-going sensibility-tests should be known early 2009.


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    3 – Looking to the future

    • Projected free flow experimentations on tolling system of ASF and ESCOTA :

    ASF on the A7 : toll plaza of Lançon-de-Provence, which support more than 140,000 vehicles on peak days.

    ESCOTA on the A8 : toll plaza of Antibes, located on the daily congestionned bypass of Nice


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    3 – Looking to the future

    • A key measure from the “Grenelle for the Environment” is the implementation of a pay-per-kilometre Eco-charge on Heavy Goods Vehicles :

      • it aims at giving a price signal (by burdening road freight transportation).

      • It will help levying new resources for new transport infrastructure developments guided by a clear intermodal strategy.

  • Eco-tax to apply to about 15,000 km of roads :

    • 12,000 km = the full non-conceded State Road Network (except toll motorways) ;

    • plus around 3000 km of local governments roads.

  • All trucks over 3.5 t will be subjected, i.e. 600,000 domestic vehicles and about 200,000 foreign vehicles that use French roads.


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    3 – Looking to the future

    • This eco-charge collection will be entrusted to one private partner, “manager” of the collection system, to be duly “commissioned” by the government.

    • Eco tax implementation timetable

      • the eco-charge concept appears in the “Grenelle I” Act voted at first reading by the Parliament

      • the eco-charge will be established by the Finance Act for 2009, to be voted

      • prior call for tenders to be put

      • expected time for the tax coming into effect, after full collection system development, integration tests and OBEs’ distribution :

    by early November 2008

    on October the 21st 2008

    in december 2008

    by mid january 2009

    in the course of 2011


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    Thank you for your attention


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    Web sites :

    www.developpement-durable.gouv.fr

    www.ppp.bercy.gouv.fr

    www.autoroutes.fr

    Contact info :

    Email : [email protected]

    Phone : +33-1-40-81-16-96


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