Motorway Tolls in France - Who Sets the Price?

Bobby SHEPHERD / 10h52 - 26 november 2017 / 0 comments

As of February 2018, toll rates for motorways will increase by approximately 1.04% to 2.05%. Claudia Cohen of French Radio London (FRL) looks into the economics behind these tolls.

In January 2017, the French government and the motorway companies signed another investment plan agreement for €803.5 million. This plan included some 50 operations such as development work and environmental improvements on the motorway network. The work is being financed by increases in toll rates as well as subsidies from local authorities.

However, according to the independent supervisory authority Arafer, the cost of the works has been largely overestimated - by as much as 350 million euros - given that operations already included in the initial agreements represent only 87 million euros.

The increase in toll rates is based on the level of inflation - estimated at 1.026 % on 1st October 2017 - but this time it will also take into account catching up on the increased State fee decided by the State in 2013. This fee is the sum of money that motorway development companies pay annually to the State for the right to occupy part of the public domain.

According to the 'Journal du Dimanche' the Ministry of Transport services presented these new rates to the Users' Committee on 23rd November.

Today there are three companies which are involved in a five-year plan agreement with the State: Vinci, Eiffage and Spanish Abertis, and during this period the companies will benefit from an additional increase . Indeed between 2019 and 2023 motorists will have to make up for lost revenue due to Ségolène Royal's decision to freeze tariffs in 2015. An extra cost of about 500 million euros is waiting for motorists.

Since 2007, profits from motorway tolls have increased by almost 20 %. These continual increases probably seem unjustified in the eyes of motorists considering that the number of employees present at the toll barriers has dropped by 30 percent.

As a reminder, it was in 2006, under the government of former Prime Minister Dominique de Villepin, that motorway companies were privatised; previously most of them belonged to the state with the exception of Cofiroute. Since that decision, toll increases have been almost consistently higher than inflation.

Today, motorway companies are doing well, with an annual turnover of 9.8 billion euros and a dividend of about 1.8 billion euros a year for shareholders. A report drawn up by the French Competition Authority in 2014 showed that out of one hundred euros paid by motorists, around twenty euros went directly into the coffers of motorway companies.

FRL is a commercial radio station broadcasting to the French community in London and Francophiles.