France's Competition Authority Calls for Tighter Regulation of Highway Concession Sector

By Ruth Bender

PARIS--France's competition authority on Thursday called for tighter regulation of the highway concession sector, in an attempt to tackle the imbalance between costs charged to drivers and profits generated by companies including Vinci SA (VCISY) and Eiffage SA (FGR.FR).

In a recommendation published on Wednesday to a parliamentary finance commission, the Autorité de la Concurrence criticized the high profits concession companies make in relation to the costs they have to put up.

According to the report, highway concession companies make between 20 euros and 24 euros ($26-$31) of net profit on EUR100 paid by a highway user, an amount the antitrust watchdog calls "unjustified" in relation to the risk of their activity.

Business units of Vinci and Eiffage are among France's largest highway toll operators.

A spokesman for Vinci declined to comment on the report. No one at Eiffage was immediately available for comment.

The competition authority said a new formula to calculate toll fees should be put in place in order to limit the rise in fees, or to even allow a drop in charges as part of a list of 13 recommendations on how to better regulate the highway concession sector.

According to the competition authority, France's seven largest highway concession companies make up 92% of the revenue generated on France's near 12,000 kilometers of highways.

But in the same report, the competition authority underlined the difficulty in changing regulation in the sector as highway concessions between private operators and the French state run for a very long period of time.

(Thomas Varela also contributed to this article.)

Write to Ruth Bender at [e-mail]

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