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February 01, 2018

Duron proposes three scenarios for French infrastructure investment

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Duron proposes three scenarios for French infrastructure investment David Gubler

AFTER a comprehensive review of France’s pipeline of proposed major projects, the Infrastructure Policy Board published its recommendations on February 1 for the development of the country’s transport network over the next 20 years.

In his 212-page report, the board’s president, former mayor of Caen Mr Philippe Duron, presents the government with a choice of three scenarios for the implementation of major infrastructure projects, which range in cost from €48bn to €80bn. Publication of the report follows a three-month consultation, which was held last autumn.

“Not everything is possible,” Duron says in his introduction to the report. “It is necessary to make a choice to define the priorities among the numerous projects the territories are hoping for.”

Scenario 1 is effectively a steady-state option intended to avoid allocating significant additional resources to transport projects, with an allocation of €48bn for the period to 2037. This is an extrapolation of current government investment budget of around €2.4bn per year planned for 2018-2020, around 25% above the annual expenditure in 2012-2016.

However, the report warns that this option will do little to alleviate the investment backlog on the conventional rail network and leaves little scope for decongesting bottlenecks. Furthermore, major projects could be paused for at least 5-10 years, pushing the completion of regional high-speed links far into the future.

The report says Scenario 2 has been designed to “meet the priorities set by the president of the republic” and with a pricetag of €60bn over 20 years requires the commitment of significant additional funding for transport. This represents an increase of €600m per year over the Scenario 1 baseline, or around €3bn annually. This is 55% higher than the expenditure in 2012-2016, but provides “consistent and sustained” funding for the enhancement of the network.

Scenario 2 favours investment in the modernisation of existing infrastructure and the “improvement of daily mobility,” while still providing sufficient funding to advance the initial stages of major new-build projects.

Scenario 3 would accelerate the measures in Scenario 2 to better meet regional and local expectations, albeit at significantly higher cost. This option would require an investment of around €80bn by 2037, equivalent to an annual budget of some €3.5bn in the period to 2022, increasing to €4.4bn a year in the decade to 2032, before falling back to €4bn a year thereafter.

The report questions the viability of sustaining funding at this level given the current financial and budgetary framework, which requires parity between the state and local and regional sources in the financing of major infrastructure projects.

These three scenarios seek to address four priorities:
• improve the quality of networks
• develop the performance of urban transport and combat traffic congestion and pollution
• reduce territorial inequalities by ensuring better access to mobility for medium-sized towns and cities, and
• develop efficient freight infrastructure and services to support the French economy.

Speaking at the unveiling of the report, transport minister Mrs Elisabeth Borne said the country now has an opportunity to set a clearer agenda for infrastructure investment. “The break on new major projects gave us time to think collectively about the investments we wanted for our country,” she says. “We had to get out of this spiral of multiplying unfunded promises, which our country has suffered from. For too long, we promised projects with no idea how to finance them. These projects were pushed back indefinitely, we ended up with lot of frustration among elected officials and fellow citizens who no longer believed in the promises they were given.”

The report can be viewed in full here (PDF link).