Bouygues to build French ‘Pentagon’

The French developer beat competition from Eiffage and VINCI and is now the preferred bidder to build a €600m military headquarters intended to house the nation’s top officials.

A consortium led by French developer Bouygues has been named the preferred bidder to build and maintain a new military headquarters in Paris that will group France’s top officials, the ministry of defence announced in a statement.

The project, nicknamed the French Pentagon, will be built in Ballard, in Paris’ 15th arrondissement, or administrative district. It will be able to house some 10,000 senior military officials and ministry of defence employees. Bouygues beat competition from consortia led by Eiffage and VINCI.

Construction is estimated to cost some €600 million with the total value of the contract coming in at a little over €3 billion. After the building is up and running in late 2014, the procuring authority will pay the Bouygues-led team annual availability payments over a 27-year period. These payments – said to be between €125 million and €130 million per annum – will be paid to the concessionaire in exchange for making the asset available in good condition.

The contract is expected to be officially signed in April, the ministry of defence said. In addition to Bouygues, the winning team also includes French firms Thales, Sodexo and Dalkia as well as local infrastructure funds FIDEPPP and SEIEF.

If the winner wishes, it can make use of the French government’s debt guarantee, covering a maximum of 80 percent of the debt used to fund the project. If it does, it can expect the guarantee to add between 75 basis points and 150 basis points to the debt portions it covers.

To find out more about France’s multi-billion euro deal pipeline, be sure to read our country report on France published in the February 2011 issue of Infrastructure Investor magazine, out now.