Concesion

CONTENTS ANALYSIS OF HIGHWAY CONCESSIONS IN EUROPE French Study for the DERD/WERD

INTRODUCTION ……………………………………………………………………………………….….1 I. ROAD INFRASTRUCTURE CONCESSION PRACTICE IN EUROPE ……………………………2 I.1 TOLL CONCESSIONS …………………………………………………………………………………..5 I.1.1 Toll system advantages and disadvantages I.I.2. Toll system functions I.1.3. Acceptability of toll systems in Europe I.2 SHADOW TOLLCONCESSIONS…………………………………………………………………….14 I.2.1 Definition I.2.2 Shadow toll practice in Europe I.2.3 Advantages and disadvantages of shadow tolls I.3. INITIAL CONCLUSIONS CONCERNING THE ROAD INFRASTRUCTURE CONCESSION APPROACH IN EUROPE …………………………………………………………18 I.3.1. Concession approach and remuneration of the concession company I.3.2. Widely varying road infrastructure practice in Europe I.3.3.Concession contracts compared with other infrastructure funding systems I.3.4 Principal merits of concession contracts I.3.5 Integration of socio-economic and equity return in connection with the decision to set up a concession contract I.3.6 Comparison of state-owned and private concession companies II. KEY COMPONENTS OF A ROAD INFRASTRUCTURE CONCESSION….………………...…38 II. 1. CONCESSION LOTSIZE………………………………………………………………………….…38 II. 2. ROAD INFRASTRUCTURE CONCESSION PERIOD……………………………………..………3

II.3 DEFINITION OF TOLL CHARGES …………………………………………………..………………40 II.3.1 Setting toll charges II.3.2 Remuneration of concession companies on a DBFO type basis – the interesting "traffic band concept II.4 CONCESSION COMPANY SELECTION PROCEDURES AND CRITERIA……………………...44 II.5 CONCESSION COMPANYFREEDOM………………………………………………………………46 II.6 SHARING OF RISKS BETWEEN PUBLIC AUTHORITIES AND CONCESSION COMPANIES ……….48 II.6.1. Transfer of risks in the case of a toll concession II.6.2 Transfer of risks in a shadow toll system II.7. ROLE OF THE CONCESSION AUTHORITY…………………………………………………….…51 II.7.1. Financial support II.7.2. Watchdog for the interests of the community II.7.3. Risk coverage III. EC LEGISLATION RELATING TO CONCESSIONS ………………………………………………...55 III.1 EC APPROACHTO INFRASTRUCTURE CONCESSIONS (WORK AND SERVICES)……….55 III.1.1 Work concessions III.1.2. Service concessions III.2 EC REGULATIONS APPLICABLE TO INFRASTRUCTURE CONCESSIONS…………….…..56 III.2.1. Rules and principles of the EC Treaty III.2.2. Council directive 93/37/EC of 14 June 1993 ("work directive") III.2.3. Green paper on public contracts: EC communication on rules of fair competition and ECjurisprudence III.3 LINES OF THOUGHT CONCERNING THE AWARD AND MONITORING OF MOTORWAY CONCESSIONS……………………………………………….……..60 III.3.1 Summary of current difficulties encountered by national road administrations in the concession domain

III.3.2. Special problem of commercial risks III.3.3. Subsidised concessions: reclassification as work contracts? III.3.4 Backing and backing-extension: funding roadinfrastructures which are profitable in socio-economic terms, but not financially balanced IV. SUMMARY……………………………………………….……………………………………...…..65

IV.1 Summary of road infrastructure concession practice: differences and similarities between European countries IV.2 Role of concession authorities ANNEXES 1. Questionnaire on motorway concession practice issued to European road directorates (DERD/WERDmembers) in 1998. 2. Main figures and tables of the report

INTRODUCTION

Following the report on "Road financing and organization of road administrations in Europe" of September 1997, it became clear that the concession option was in widespread use in the road sector in Europe. France was consequently requested to complete this work by a study covering a detailed analysis of the concessionmethods practised by road administrations. How do the different European countries define motorway concessions? Do the concession authorities have roles which differ from one country to another? Are the concession companies selected on the basis of the same criteria? Is risk sharing between concession authority and concession company the...