Vinci kicked out of €750m French road deal

The French government has withdrawn Vinci’s preferred bidder status for the contract to build and maintain the A355 western Strasbourg bypass. The government claims Vinci couldn’t reach financial close on the project, but Vinci counters it could have clinched it had it been given more time to do so.

French infrastructure group Vinci is embroiled in a war of words with the socialist President Francois Hollande’s new administration over a €750 million road project known as the A355 western Strasbourg bypass.

In January, Vinci had been named preferred bidder for the project by the French Ministry for Ecology, Sustainable Development, Transport and Housing – at the time, still run by Nicolas Sarkozy’s conservative administration. But earlier this month, the new government decided to withdraw the preferred bidder status from Vinci, alleging it did not reach financial close on the project within the allotted time.

In a curt statement, Vinci said it “takes note of this decision and points out that several banks had already confirmed their participation in the financing of the project. The extension of the preferred bidder status beyond May 28 2012 would have enabled the last two financial institutions to confirm their participation in the project and finalise the financing arrangements within the maximum authorised timeframe”.

Speculation abounds as to why the new government decided against extending the amount of time Vinci would be given to close the project. But most media outlets are pointing out the A355 project simply lost political support with the new government.

In a separate statement, the mayor of Strasbourg, also a socialist, pointed out that Vinci’s failure to close on the project was proof that the A355 did not garner enough support within the project finance community. The mayor added that he would be open to using the money earmarked for the A355 to help fund other projects outside the roads sector.

The 55-year contract nearly awarded to Vinci covered the design, financing, construction, operation and maintenance of a new 24-kilometre section of tolled motorway which would bypass the eastern French city of Strasbourg to the north and west through the Kchersberg region, linking the A4 to the A35/A352 junction.