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Theses case studies were selected since they have been completed or are underway by the company EIFFAGE. Moreover, the choice relies on this type of PPP project because they are almost identical (in size) in order to compare them and identify CSFs. The researcher needs to compare the results and findings of CSFs from the literature with those from case studies.
4.2 Case study: Millau Viaduct
According to Jacques Godfrain (2002), "the city of Millau will acquire a new reputation in the world thanks to this exceptional structure"(Journal du Viaduct NÂ°2, 2002). In fact, Millau was especially known due to its endless traffic jams before becoming famous for its bridge over the Tarn.
The Millau Viaduct is a multiple cable-stayed bridge of 2.46Km crossing the Causse Rouge in the north and the Causse du Larzac in the south. The Millau Viaduc is the missing link of the A75 motorway between Clermont-Ferrand and Béziers and it has developed an entire region (Omega Centre, 2012).
The French government has signed a concession contract with the "Compagnie Eiffage du Viaduc de Millau" (CEVM), implying the design (partial) financing, build, operation and maintenance of the public service for a period of 78 years and will be remunerated directly from users through a toll.
The cost of implementation of the overall work is estimated at around â‚¬ 400 million of which â‚¬ 270 million financed by equity of EIFFAGE.
4.2.2 Project Organisation
The contract required that the concessionaire should structure its Organisation according to the traditional scheme with the client is clearly separated of designers and contractors. The role of the state was to check that the contract requirements are met and for that he was advised by a committee of high-level expert (Omega Centre, 2012).
The figure 4 shows the general project organisation where the French State is the Awarding Authority (public partner) and the CEVM is the Concessionaire (private partner).
Figure 1Â : Project organisation structure
The main actors involved in the project are the following:
The Awarding Authority represented by:
The SPV, Designer and Contractor:
MOA: CEVM (Concessionaire);
MOE: Group SETEC and SNCF (Designer);
Supply chain for the construction: Eiffage TP for Civil engineering and Eiffage CM for Steel manufacturer (Contractors).
Civil engineering: STOA/Eiffage TP/EEG-Simecsol (+ Thales+ SERF)/Arcadis;
Steel and launch of the deck: BE Greisch.
Experts advising the Awarding Authority:
Architect: Norman Foster & Partners (Coste, 2009 cited in Omega Centre, 2012).
The CEVM is the Concessionaire for this PPP and belongs totally to EIFFAGE. The CEVM has signed a building contract with two subsidiaries of EIFFAGE: EIFFAGE Travaux Publics and EIFFAGE Construction Métallique (formerly EIFFEL). In addition, these two subsidiaries have also subcontracted work to other subsidiaries as APPIA and FORCLUM. Nevertheless, the choice of partners was also ported to other external companies when skills were not available within EIFFAGE such as the company Freyssinet for cables. As well, the design and monitoring of work has been carried out by a consortium composed of the engineering offices SETEC and SNCF.
The Millau Viaduc has been receptioned on 14 december 2004, which is three years after putting the first stone and three month ahead of the schedule. In spite of the difficulties encountered on the site, the success factors that allowed meeting the deadline of the project are the following:
"the choice of constructing the bridge in steel (compared to about 52 months in concrete) which allowed:
building the piers and the deck at the same time;
pre-fabricating the work pieces in factory.
the choice of the launching method;
integrated research and studies;
the work organization consisting of autonomous working units". (Coste, 2009 cited in Omega Centre, 2012).
Moreover, it is important to highlight the involvement of the French State because he plays a key role on the success of the project. Concerning the operation of the Milllau Viaduct, the levels of traffic are upper than those were planned and therefore the toll barrier which had 14 lignes in 2004 was extended to 18 lines since 2005. Source: Visit to the Millau Viaduct (23/12/2009)
According to Patrice Parisé, Jean Francois Coste, Pascal Lechanteur and Marc Legrand, the success factors related to the organisation of the project are as followed:
"the initial planning and route;
the procurement decisions and the concession;
the technical choices, in particular the decision to build the bridge in steel;
the people who contributed to the different phases of the Viaduct" (Viaduc de Millau, Revue, 2005 cited in Omega Centre, 2012).
Regarding the project in general, the critical factors that contributed to the success are the following:
"The planning: from the studies of the initial route to the choice of the project. The design of the Millau Viaduct consists of the original design proposal of the Administration (SETRA) conceived by Michel Virlogeux. However, expert and public scrutiny challenged this initial project leading to the involvement of the British architect Sir Norman Foster and international expertise and competencies. As a result, the project improved over the process.
The procurement: the success of the PPP process relies on sound project governance and treatment of risks. The Millau Viaduct is a case of cooperation and coordination between actors at the different stages of the project. The procurement stage drew greatly upon the previous conception stage led by the Administration.
The construction: the Millau Viaduct does not constitute a technological innovation in itself but is characterized by a genuine and innovative application of existing techniques. The decision to build the deck in steel is part of this process and helped in reducing delays, delivering the project on time and providing good safety conditions for workers on site"(Omega Centre, 2012).
Eventually, the Millau Viaduct project resulted from a perfect balance between the French State and the concessionaire EIFFAGE which has conducted to the success of the PPP model in France and to a win-win partnership for this project.
4.3 Case study: Large Stadium of Lille Metropole
The Urban Community of Lille Metropole ("Lille Métropole Communauté Urbaine" or LMCU) has decided to provide a new stadium for the city of Lille in order to accommodate all matches of the LOSC football club and other events contributing to the influence of the metropolis.
LMCU signed on 15 october 2008, with Eiffage Lille Stadium Arena (ELISA, a 100% subsidiary of Eiffage) a CP including the design, financing, build and maintenance of the Large Stadium of Lille Metropole ("Grand Stade de Lille Métropole" or GSLM) for 31 years beyond the construction period of 45 months.
ELISA will also operate the Stadium for 31 years after its opening, knowing that this equipment has required an investment of â‚¬ 324 million. The funding of the project has been provided entirely by ELISA. This latter has brought â‚¬ 60 million from its own funds. The balance of â‚¬ 264 million includes a debt owed to a bank pool and a grant of â‚¬ 45 million provided by the Regional Council of Nord-Pas-Calais.
4.3.2 Project Organisation
ELISA, through a design-build contract, gives to a consortium the missions of architectural design and build up to its delivery for LMCU. The management of architectural work is carried out by the Agencies Valode & Pistre Architects and Pierre Ferret.
The figure 5 shows the general project organisation where LMCU is the Awarding Authority (public partner) and ELISA is the Special Purpose Vehicle (private partner).
Figure 2Â : Project organisation structure
The PPP project combines the experience of architects of international renown and the expertise of EIFFAGE for exceptional project.
More emblematic than the Millau Viaduct, all branches of EIFFAGE (EIFFAGE TP, EIFFAGE CM, EIFFAGE Energie, EIFFAGE Construction, EIFFAGE Immobilier and EIFFAGE Concession) contributed to this project. For the engineering and design, a large tandem signature was established with Valode Denis and Pierre Ferret. Moreover, a partnership with the consultant Egis-Iosis for EIFFAGE TP and Greisch for EIFFAGE CM was established.
The Large Stadium of Lille Metropole is an exceptional equipment, since it combines in one place, a Stadium, an Arena and a Sports Palace. In fact, It has two major innovations: a removable roof and a unique mobile lawn, which can be transformed within 24 hours, the largest arena in Europe, in order to accommodate great indoor events in configuration "Palais des sports" (Sport Palace) or "Boite à spectacles" (Spectacles Box). Another major innovation, the northern half of the stadium is mobile. Indeed, it can lift 2 meters despite its 4000 tonnes, and drags above the southern half to form an "Arena" of 29 500 seats. The Grand Stade Lille Métropole can also accommodate "corporate" events organized for companies.
According the architect Denis Valode (2012),"nowadays, major cities exist across their major sports facilities like Beijing symbolized yesterday by the Forbidden City, and now by the Bird's Nest stadium built for the Olympics in 2008. Similarly, the GSLM will constitute for the Metropole of Lille a symbol recognized around the world. " (Synergie 17, 2012).
4.4 Comparison of the two Case Studies
These are partnership arrangement in which the public sector (Awarding Authority) allows to the private sector (EIFFAGE) to design, build, finance, operate and maintain the public service over a period of time. The Concessionaire (or Special Purpose Vehicle for CP) will collect toll from the users of the public for the concession (Millau Viaduct) and a rent from the Awarding Authority for the CP (Large Stadium of Lille Metropole) so that they can make their capital and profit. When the contract is finished according to the agreement, the facility is transferred to the public partner.
The Figure 6 is a diagram representing the transfer of risk from the public partner to the private partner according to the type of contract. The most significant contrast between the CP for the Large Stadium of Lille Metropole and the Concession for the Millau Viaduct is based on the fact that the private partner bears all risks including those linked to revenue. Indeed, for the Millau Viaduct, the CEVM is remunerated directly from users through a toll.
Figure 3Â : Risk sharing according to the type of contract (adapted from IGD, p3, 2006)
At the level concept, the architectural design of the Millau Viaduct was imposed by the Awarding Authority and the functional program was relatively simple and well defined. In addition, technical design and construction of the Millau Viaduct had not something new for EIFFAGE even if the height of the piers and deck has required innovations which allowed the Millau Viaduct to enter into the Book of Records.
In addition, EIFFAGE has undertaken significant risks by fully funding this project by equity which required huge commitment from all actors. Regarding the organisation of the project, the structure was similar to a traditional contract where the client, the designer and the builder are clearly separated. Finally, the operation of the viaduct has not complex functional specifications except the toll barrier. In conclusion, the Millau Viaduct project was a success for all phases of the project lifecycle, including the design, financing, construction, operation and maintenance.
The project of Large Stadium of Lille Metropole presents many difficulties like the roof or the spectacles box. In addition, the interfaces of the different building trades required a perfect coordination and communication between all the actors. The CP provided the opportunity to recover "recette de valorisation" that is to say additional revenue but outside of the scope of the public service which allows the LOSC to host football match.
Therefore, it was necessary to define complete and detailed specifications to fully optimize the equipment so as to have the best bid with the lowest rent possible for LMCU. Also, the design and construction of a multifunctional stadium of this scale in CP has never been used in France. Thus, ELISA has signed a design-build contract with a strong and competent consortium for this complex project.
For the operation, the various features of the equipment (football stadium box show ....) require an adequate organisation in order to meet performance objectives of LMCU. Today, all project stakeholders interviewed are unanimous to affirm that the Large Stadium of Lille Metropole project is a success despite some difficulties to respect the budget during the construction. Concerning the operation, the first official results have not been published yet, however, it appears from the first orders and bookings that the revenues confirm forecasts made by ELISA.
In conclusion, these two PPP projects undertaken entirely by EIFFAGE have shown that it has the skills and resources to manage successfully project of this scale. Thus, EIFFAGE has perfectly structured its Organisation to design, finance, build, operate and maintain these PPP projects.