» France’s southeastern metropolis readies a downtown-airport connection with help from the private sector.
After the collapse of the massive London Underground PPP scheme early this month, the future of major private involvement in the maintenance and operation of public transit systems was put on the skids. There, the city took back full control of a system whose maintenance and reconstruction had been signed off to private entities less than ten years before, claiming that municipal entities would be able to do the job keeping up the network more easily than had the PPP partners. Though there is no technical reason why such cooperation between the public and private sector had to fall apart, the recession underlined the vulnerability of having corporations assume risk over vital public resources.
The signing of a contract to operate two new transit lines between the Denver transit system and the private Denver Transit Partners, however, suggests that there may still be some merit to the idea of getting corporate involvement in public projects. Just finalized a few weeks ago, this agreement is too young to be evaluated on its merits.
But a new airport connection almost ready for operation in Lyon, France, provides an example of how such a cooperation might be structured efficiently and reasonably.
The Rhônexpress program will bring the Lyon Saint Exupéry Airport within 25 minutes of downtown’s Part-Dieu station every fifteen minutes. The line will operate using six Stadler tram-trains running on tracks partially shared with the T3 tramway line completed in December 2006.
The contract, signed in 2007 between the département (the French version of the county) and the Rhônexpress group, commits local entities to €31.35 million in expenses for the construction of a train maintenance center and a maximum of €3.5 million in annual subsidies for thirty years, increased at a standard 2% yearly rate. The French government also contributed €10 million. The private entity, operating under European Union rules for public service provision, has paid the majority of the corridor’s estimated €110 million construction costs and will be liable for any operational losses.
The Rhônexpress group is a cooperative between several French entities; it is controlled 36.6% by the Caisse des Dépôts et Consignations (a semi-public investment bank), 28.2% by Vinci (a contractor), and 28.2% by Veolia (a transit operator). Each has on its own been closely involved in other French public transportation programs.
Their willingness to commit to an initial investment in the line’s construction suggests that they expect it to be operationally profitable, at least above the €3.5 million subsidy they’ll be receiving every year to operate trains. Though the local and national governments have committed a total of €146.6 million to the project’s construction in 2007 dollars, that money is to be distributed over a course of 30 years. It will almost certainly be less than overall infrastructure and operations spending on the corridor.
Also, by agreeing to distribute most payments year-by-year rather than alone in the construction program, the local governments are minimizing the hit on any one annual budget. This could be a lesson for U.S. systems considering similar deals: Rather than pay for all of the infrastructure upfront and then assume that the operator can simply pay for operations, the local governments have ensured that the private group has a steady source of income throughout the 30-year contract — this may, in turn, have lowered the needed commitment to the initial infrastructure program. This could in turn be a relatively good deal for the governments.
Of course, whether the Rhônexpress program was worth any public investment at all is a matter that certainly merits debate. The new trains will replace the Satobus with a new service that is only five minutes quicker and almost 50% more expensive. Even if the project is profitable, it won’t improve service much for the region’s inhabitants. (Passengers are guaranteed a 50% discount if trains are ten minutes late and a full payback if they’re more than 20 minutes late.)
Nonetheless, Lyon proceeded quite reasonably in the implementation of this infrastructure project; a €146.6 million total commitment isn’t bad for a new airport rail link. But the city and its regional transit authority were smart: they have been planning since 2001 for this line and made a number of provisions in other transit projects to ensure lowered costs.
The region committed first to the T3 tram, which runs east from the Part-Dieu station in downtown Lyon to an industrial district. As part of that 9-mile project, the line included from the beginning bypass tracks at many of the stations — a minimal expense for a big payoff. Once the Rhônexpress project is up and running in August, the airport-bound trains, stopping at only two stops between downtown and the terminals, will be able to bypass local trams. On most of the tracks, the Rhônexpress will share tracks with trams and run at urban speeds. The only construction necessary for the new link, then, was a 4.3-mile track on a new alignment. There, the tram-trains will be able to reach 60 mph, not bad at all.
Lyon’s airport project suggests a reasonable way for private involvement in public infrastructure. Long-term payments, a commitment from corporate entities for initial infrastructure costs, and a reduction of costs through shared tracks with another transit program has likely saved the region money over the long-term.
Image above: Rhônexpress photomontage, from Rhônexpress