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Illegal concession closes French toll road

A FRENCH local authority last week ordered the closure of a major toll road after a High Court ruling declared the concession agreement illegal.

Lyons urban council has closed the 373M road after being found guilty of awarding the concession without putting it out to competitive tender.

Council officials were due to meet on Monday night to decide what to do next.

The project forms a vital part of efforts to relieve heavy traffic congestion in central Lyon. The city straddles the Rhone and Saone rivers. With no ring road, through traffic and local traffic is funnelled across a limited number of bridges and through tunnels under steep hills close to the city centre.

Lyon awarded the concession of the 8.5km dual carriageway northern ring road to a Bouygues-led consortium in 1991 after inviting it and Dumez to submit bids to negotiate concession terms.

Bouygues subsequently won the contract and formed a joint venture with Dumez to build, finance and operate it.

The Lyon authorities did not put the project out to competitive tender because France had not transposed European public procurement law into domestic law when Bouygues and Dumez were invited to bid.

But a French high court ruled that this was illegal as the European directive had been passed in 1989.

Bouygues, Dumez and a group of banks have invested 21.3M in the project and have raised floating rate loans and bonds finance worth 326.7M. Lyon city council has also put in 173.3M.

It is unclear who will take over the operation of the road and who will repay the finance for the project.

Andrew Bolton

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