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

National Conference of State Legislatures New Orleans, Louisiana, July 24, 2008

Sebastien GOURGOUILLAT Transportation and Construction Attaché Embassy of in the USA [email protected] France (= size of Texas)

342 000 sq. miles 63 millions inhabitants

22 regions, 96 departments 36600 communes

1 150 miles of high lines 5 500 miles of highways 200 public transit networks

30 millions cars, 440 TGVs The rail network The rail network

„ 24000 miles conventional, 1150 miles HSL „ Conventional network built mainly in the XIXth century by private companies… became public in 1937 „ HSL network since 1981 (studies 1968) – 100 million passengers per year – 1+ billion 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 growth 1981-2006

100000 90000 80000 thalys 70000 eurostar 60000 nord-Europe 50000 intersecteur 40000 atlantique 30000 sud est 20000 Thousands passengers 10000 7 7 005 00 0 99 003 2 2 99 9 2001 2 7 993 995 1 1 991 1 1 985 98 1989 1 981 983 1 1 1 1 Years 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, interoperability „ Cost control in building and operation, start with the most profitable links „ Technology : significant world records (327 MPH in 2007, 1250 miles over 310 MPH, 663 miles in 3h29 in 2001 „ Safe, environmentally and community friendly „ Good project management organization Number of people killed by billion passenger.mile

Land requirements are smaller A flexible TGV is landscape-friendly Intermodality : connections and TOD Institutional organization of rail in France (‘97)

Government (DOT) Control and regulation authority

Infrastructure owner and Trains owner and operator (RFF+SNCF management contract) operator (SNCF)

Infrastructure charges / access fees Trains ownership, operation and maintenance Improvement / development Stations ownership, operation and Maintenance maintenance Access fees Timetables Commercial activity / customers Capacity allocation relations Traffic control Freight / passengers, long / short haul

Nothing but a dream : the prospective 2020 worldwide map The highway network The highway network

„ A 5 500 miles toll highway network, 40% of the total traffic „ Construction started 1955 under concession contracts 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 ( ) – 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. Sarkozy „ Technical – An integrated system : rail and 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: Education Income The general fiscal Gas tax year budget: Army Health Business tax Mixes all incomes Transportation Every national tax And so forth… How did we get there ? New financing concepts

„ PPPs : A long tradition for financing major in France „ Without concessions, no highways in France „ PPPs 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 sector „ and tunnels : Millau, Mont Blanc… „ Public facilities: stadiums sea „ Public buildings : prisons (new 1.4 bEuros program underway) „ Water supply (80%) and sanitation (55%) „ Waste management (>90%) „ Energy XXIth Century : a new ecological focus

„ New political and administrative principles „ A large public overview of every : – 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 : 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 Ministry For ecology, sustainableun ministère land nouveau planning and developmentaux vastes missions

State Minister

Mr Jean-Louis BORLOO Junior minister Junior minister for For Transportation Ecology

Mr Dominique Ms Nathalie BUSSEREAU KOSCIUSKO- Ministry of MORIZET transportation, construction and Ministry of land planning Ecology and sustainable development + General planning Authority + Energy MINISTÈRE DE L’ÉCOLOGIE, + Administration DU DÉVELOPPEMENT ET DE L’AMÉNAGEMENT DURABLES Join us in San Diego, october 8

APTA Expo – FTA sponsored Thank You !

Sébastien Gourgouillat Transportation and Construction Attaché Embassy of France in the USA [email protected] The concession model

„ The public authority entrusts a private partner to design, finance (even partly), build, operate and maintain the system „ The partner gets tolls from the user: its revenue is narrowly related to the provided service „ The 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 contract „ Risk allocation and performance goals specified by 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 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: highways A41 highway – 20 km in the northern Alps inc. 3-kilometers tunnel and 4 . – 871 million euros 100% financed by private equity. 80% is debt and 20% own equity. – 55-year concession with AREA (historical highway operator) and . – Contract signed on October 2005. Opening 2008.

Millau viaduct – a 2460 meters-long, 245 meters-high completing the 3rd north-south highway axle in France. – 400 million euros financed by the private partner. – 78-year concession with , 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 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: 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 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 () – 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.