A63 Motorway

Key Data

Country:
France
Sector:
Transportation
Project Capital Cost:
c.US$1.4bn
Investment Date:
2011
Status:
Realised in 2016
Asset Overview:

Upgrade of an existing c.100km secondary road linking Salles (Gironde) and St-Geours de Maremne (Landes)

The story in stats

US$1.4bn

project capital cost

40 year

concession

7 months

ahead of schedule

Driving Success

The A63 motorway project in South West France included the widening and upgrade of an existing 105km road linking the towns of Salles (Gironde) and St-Geours de Maremne (Landes) from a two to a three-lane highway. The project also comprised the construction of two cross-lane toll barriers and parking facilities for 1,200 heavy goods vehicles (HGVs).
The modern, wider, motorway reduces the journey time for drivers travelling between the greater Bordeaux region and the Basque coast. It also provides an efficient route for the transfer of goods between Europe and the Iberian Peninsula, thereby helping to reduce pollution.

Safety was a key consideration as we looked to improve the motorway, and the expansion to three lanes includes a dedicated light vehicle lane which HGVs are barred from using. In addition, the parking space created for over one thousand HGVs has provided drivers at risk of fatigue with a secure place to rest. The number of accidents along the route has declined since the upgrade.

The environmental aspect of the development was a key focus for us and we worked with our partners to ensure it did not impact negatively on the local fauna. To this end, bridges were put in place to help animals such as deer to cross the motorway and there is ongoing monitoring of the local habitat and wildlife population.

The prevention of fires in the pine forests bordering the motorway has also been a priority. In conjunction with our partners we introduced some innovative awareness campaigns specifically aimed at drivers, highlighting the actions they can take to avoid inadvertently starting fires. We have delivered messages through the motorway radio, placed flyers in service stations and made non-flammable ash trays available. We have also worked with a local haulage company, using the backs of trucks as billboards to display campaign messages. Our effort to prevent forest fires not only seeks to reduce risk to the environment but also to mitigate the safety hazard and potential operational disruption that a blaze in the vicinity of the motorway would cause.

In line with our expertise in renewable energy, we welcomed an initiative by our partner Colas, which saw the world’s first solar motorway trial in which skid-resistant solar panels have been installed along a stretch of the road. The energy generated from this section of solar panels is sufficient to power all the equipment of the Saugnacq-et-Muret toll plaza. The initiative has seen strong support among regional stakeholders.

Background

Our Infrastructure team possesses a wealth of experience in the development, financial structuring and operation of long-term, concession-style Public Private Partnerships (PPP). The A63 motorway project was an opportunity to bring our experience and knowledge to a complex and high profile European PPP project. It also aligned with our philosophy of partnering with similarly-minded top-tier developers and operators.

Our partners in the Atlandes consortium asked us to join early in the development period because of our experience of leading projects and our in-depth understanding of traffic revenue forecasting. This helped underpin the viability and success of the project. We also played a major role in assembling the bid team and we were able to use our project management expertise to help lead a successful bid.

The project was eligible for EU funding while the construction and operation of a toll system provides income throughout the 40-year concession. In addition, an innovative financing structure, rarely seen in traffic infrastructure projects, has helped to provide stability and certainty over the long-term concession. It has introduced a tranche of long-term debt from both the European Investment Bank and commercial lenders at initial financial close.

In June 2015, the project was successfully refinanced on a long term basis, with no residual refinancing risk, at very attractive conditions.

Creating Real Value

The construction of the A63 motorway project was successfully completed in November 2013, a remarkable seven months ahead of schedule. The shortened timeframe was notably due to two key components in the process. First, the collaboration we fostered between the project partners that enabled quick and efficient decision making and second, the contracts and incentives we put in place with subcontractors which ensured timeframes were met or were ahead of schedule.

The initial investment in the asset, which InfraRed made on behalf of its investors, was fully realised in November 2016 through a sale to two leading French institutional investors. Separately, we successfully completed the acquisition in January 2017 of an investment from two co-shareholders for our listed investment company, HICL.

On a complex project like this, it really helps to work with partners that get the big picture, as well as scrutinising the detail. InfraRed’s straightforward approach and hands-on involvement meant we were able to work very well as a team to successfully deliver this project.

Patrice Dessiaume
Former senior bid director at Colas and former General Manager of Atlandes SA during the construction period