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France Infrastructure Report Q1 2012
Business Monitor International, Jan 2012, Pages: 90
Business Monitor International's France Infrastructure Report provides industry professionals and strategists, corporate analysts, infrastructure associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on France's infrastructure industry.
BMI's overall forecast for France's infrastructure sector remains positive, and BMI expects the industry to report annual growth of around 5.5% between 2011 and 2016, rising from growth of slightly more than 5% in 2010. BMI expects expenditure on transport infrastructure to account for 79% in 2011, rising to 87.2% by the end of the forecast period in 2021. Meanwhile, investment in energy and utilities infrastructure in 2011 is estimated to have reached EUR7.4bn in 2011 – 21% of the country's total infrastructure expenditure, though this figure should fall to 16.8% by 2016.
- Despite a generally positive outlook, BMI has highlighted a number of risks which could affect France's infrastructure industry. These are primarily related to public-private partnerships (PPPs), austerity measures and the proximity of the country's banking sector to Greek sovereign debt. As such, BMI expects key players within the construction sector, such as Vinci, to fall back on their operations in the world's emerging markets.
- The recent quarter has seen further progress made in the development of high-speed rail links within France. Most recently, in October 2011, RFF received two final bids for the Paris- Montpellier line from Bouygues and VINCI. There are also discussions over the possibility of extending cross-border rail links within Europe.
- In addition, the government has seen a positive response to its offshore wind farm project, after opening the first round of bidding in July 2011. In particular, French firms have been keen to participate in the project, with a number of firms, including GDF Suez, Areva and VINCI, announcing plans to form partnerships in order to strengthen their positions. Once complete, 23% of France's energy will be generated by renewable sources. France has also announced plans to develop its solar energy infrastructure
In addition, preparation for France's hosting of the UEFA Euro 2016 Football Championship will create new contracts and new jobs in the construction sector, albeit not at a level comparable to that seen in Poland and Ukraine, where the 2012 games are being held. Overall, the sector should continue to report growth over the forecast period until 2021.
Private investment in construction is likely to increase, as austerity measures reach the infrastructure segment, and French firms are likely to look to their overseas clients in order to secure new contracts. Nonetheless, business ties between France and other countries, particularly Russia, should benefit French firms looking to boost their presence overseas.
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