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France Infrastructure Report Q3 2009Published by: Business Monitor International Published: Jul. 2, 2009 - 77 Pages Table of Contents
AbstractThe third tender for the construction of a new high-speed railway in southern France dominated thetransport infrastructure sector this quarter. It was solely a French affair, with the usual suspects - Vinci,Eiffage and Bouygues - shortlisted for the contract to build, maintain and operate the ContournmentNimes-Montpellier (CNM) high-speed railway line. This is in line with our view that the government’sintention to accelerate large-scale public works programmes will create opportunities for the Frenchinfrastructure players.We see no reason to alter our forecasts this quarter. First, apart from the progress on the high-speedrailways tenders, there has been little else in the market to prompt us to anticipate increased or evensustained activity. Second, according to INSEE, the national statistics agency, economic activitydeteriorated in Q309, and is expected to fall further in the coming months. We therefore hold ourforecasts steady this quarter, forecasting a contraction of industry value real growth of -5.5% for 2009. Industry value will decline in 2009 from EUR122bn in 2008 to EUR116bn in 2009 and fall further toEUR112bn in 2010. The stimulus plan represents a risk to the upside for our forecasts, albeit not one thatcould lift the real growth figure in positive territory easily, given the scope of demand destruction comingfrom the private sector. French companies that operate in the infrastructure sectors such as Vinci, Bouygues, EDF, Veolia andLafarge are among the leaders in their respective fields globally. Though their 2008 financial performancewas relatively stable, they have all expressed concern for the short to medium term. They all pin theirhopes on the infrastructure-geared fiscal stimulus plans of France, other European countries and theUnited States and beyond, though there is precious little else at the moment to offer comfort from thedownturn. In December 2008, French President Nicolas Sarkozy announced a EUR26bn (US$33bn) stimuluspackage to boost the country's economy. Under the scheme, state-owned companies will increaseinvestment by EUR4bn (US$5.1bn) in 2009 and the government will supplement this with a furtherEUR4bn on high-speed rail projects, dams and canals, university campuses, and road maintenance amongother projects. Though this will provide momentum for the sector, the international scope of operations ofthe French infrastructure majors means that they are also pinning their hopes on overseas fiscal stimuluspackages (such as the one in the US for instance) to breathe life in their order backlogs in 2009. Get Full Details About This Report >> |
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