The motorways file, with the two reports of which we have just been made aware, that of the Transport Regulatory Authority (ART) and that of the General Inspectorate of Finances (IGF), sheds new light : it is always more topical and even more burning.
The first, that of ART, published on January 26, 2023, is about concession economics. It confirms what we have already been saying for almost ten years, namely that the concession contracts of the historical companies (ASF, SAPN, APRR, Escota, Sanef, Area, Cofiroute) are governed by provisions and rules which are particularly favorable.
Thus, it is rich in lessons on certain provisions of the memorandum of understanding, which was negotiated by the State and signed with these same companies in April 2015 by Emmanuel Macron as Minister of the Economy and Ségolène Royal as Minister of the environment
A protocol which, I remind you, first of all recorded an extension of the duration of concessions, between two years and four years and two months, in return for the implementation by the latter of a motorway recovery plan 3.2 billion euros from 2015-2016.
The Autorité de Régulation des Transports tells us first of all that the possibility of triggering the review clause, which provides for the early termination of a concession contract in the event of excess profit, has a “almost zero probability”given its calibration, as indicated by its vice-president Florence Rousse.
It also confirms the reality of the tax neutrality clause included in this 2015 agreement, since while the finance law for 2020 indexed the land development tax paid by motorway concession companies (SCA) on the inflation, they consider that this provision should give rise to compensation.
The Transport Regulatory Authority did not fail to point out that this indexation would only have a slight impact on their profitability (-0.02 percentage points) and that it was relevant to compare this additional charge to the savings generated by the reduction in corporate tax from which they benefited (from 33.3% to 25%), which according to its calculations “represents a cumulative gain of 7.9 billion current euros for historical SCAs by the end of the concessions.
Should highways be nationalized?
The authority also questioned the current rules governing the annual increases in tolls, at least equal to 70% of the rate of inflation. Florence Rousse explains that the inflationary context is favorable to them and she adds that this could represent a cumulative gain of 5.4 billion current euros until the end of the contracts.
Moreover, as of this year, the tariffs of the main tolls of the concession network will increase on average by + 4.75% after a 2% increase in 2022.
For Vincent Delahaye, centrist senator and rapporteur for the commission of inquiry on motorway concessions carried out in 2020, the increase should have been only 1.8% since operating expenses represent only 30% of turnover.
And it is not the announcement made on January 30, 2023 by Vinci of a blocking of toll rates on 70% of short journeys of less than 30 km that can create any illusion: this counterfire is not up to the profitability “non-standard” then pinned by Senator Vincent Delahaye.
There is another report, which has never been published, although it was submitted to the Minister of the Economy Bruno Le Maire in February 2021, it is that of the General Inspectorate of Finance (IGF). It is “le Canard enchaîné” which, in its edition of January 25, 2023, informed its readers of its content. This only confirmed the rent situation enjoyed by the historical companies after their privatization in 2005 for a sum close to 15 billion euros.
This situation, which was already denounced by the Court of Auditors in July 2013, by the Competition Authority in September 2014 and by myself, as rapporteur for a fact-finding mission on behalf of the Development Commission Sustainable Development and Regional Planning entitled “Motorways, it’s time to take control”.
The price of tolls still higher, despite the record profits of motorway companies
According to the IGF, SCAs enjoy“profitability much higher than expected” what “goes against the principle of reasonable remuneration”. It stigmatizes the abnormally high profitability of two major concessions, ASF-Escota (Vinci) and APRR-Area (Eiffage) approaching +12%, i.e. a threshold well above the target of +7.67% imagined in 2006.
An observation with which the former Inspector of Finance, Emmanuel Macron, can only agree, he who declared on March 4, 2015 before the Senate “that there were very profitable and unreasonable (motorway) contracts”.
ART, for its part, which has calculated an internal rate of return over the total duration of the concession amounting to +7.8%, considers, through the voice of its vice-president, that this is “with a profitability that is in the high average”. Even if the authority gives us a polished and restrained reading of the profitability of concessions, it does not hesitate to identify the many elements that contribute to strengthening it (lower corporate tax, inflation, fiscal neutrality , extension of concessions, absence of competition, level of profits and dividends, etc.).
The senior officials of the IGF also made various proposals:
- the first was based on a 60% reduction in toll rates from 2022, a far cry from the measure decided on January 30, 2023 by Vinci;
- the second proposed cutting off 63% of the gross surplus of companies that had made “surpluses” ;
- the third advanced option was to impose an end “anticipated” concessions from 2026.
As they point out, only the last hypothesis is possible, the other two having no legal basis.
This early termination of contracts entered into with large groups under Article 38 (for reasons of general interest) of each of them, which we have been advocating since 2015, is today validated by the extraordinary amount of dividends paid to the shareholders of these groups since the privatization in 2005, nearly 40 billion euros (end of 2021) including more than 3.2 billion in 2021 “a historically high level” as noted in ART.
Motorway concessions: why the annual price increase is legally questionable
On the government side, they reject any excess profitability and stick to the status quo. Moreover, we can legitimately worry about the lack of weight of our Minister Delegate for Transport, Clément Beaune, who only obtained from Vinci a small blockage of certain tolls, after having, as he told RTL, “spent weeks negotiating with motorway companies”.
Likewise, what can we expect from the establishment of a working group on the subject of their economic and financial balance at the start of 2023, as the Minister would have promised to do with Vincent Delahaye? In fact, a group identical to the one we had already obtained in 2015 from Manuel Valls to redefine and rebalance the content of concession contracts…
But, having learned from experience, I am very much afraid that once again this will be exploited, by the rulers and Bercy, so that nothing changes and that the motorway rent.
A motorway income that some might be tempted to perpetuate through a further extension of concession periods to allow companies to carry out a major ecological transition investment plan. The concession motorway sector faces significant needs for mitigation and adaptation to climate change.
Nothing works. For almost ten years, the reports have followed one another, the figures have multiplied, and the State still refuses to be a strategic State by resorting to its full sovereignty over the public motorway service.
