The case of the LanguedocRoussillon Region Development

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• The case of the Languedoc-Roussillon Region
  Development
• Public-Private Partnerships
• Establishment and reform of BRL,
• a profesionnal third party

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Content

• 1. The Languedoc-Roussillon in the 50s 
• 2. Initial mission and organisation of a
  professionnal partner - BRL
• 3. Fifty years of evolution, crisis and reform
• 4. New partnerships, more private participation
• 5. The future, a new investment cycle
• 6. Conclusions - few lessons

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Languedoc-Roussillon
A situation of crisis in 1950 Vineyards, need for
diversification Industrial decline, rural
exodus One key constraint the insufficient
water resources availability

• Languedoc Roussillon
• 27 000 000 km²
• 2 400 000 habitants
• SAU 1 060 000 ha

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1. The Languedoc-Roussillon in 1950

• Potential
• Soil, climate, tourism ...
• Urban development and services
• Needs for many investments, particularly in
  hydraulic infrastructures
• An old idea ...

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2. Initial mission and organisation

• Need for a professional third party between the
  State and the water users
• Three possible choices for the Government
• 1. Decentralise the state administration
  ( department )
• 2. Create a National Public Company
• 3. Establish a partnership between
   stakeholders , public and private, national
  and regional / local
• Third case selected establishment of a  société
  déconomie mixte 

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2. Initial mission and organisation

•  Société déconomie mixte  partnership and
  strong political willingness
•  Commissariat général au plan 
• P. LAMOUR

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2. Initial mission and organisation

• Sustainability and ownership
• Concession / BOT

State Delegation
State control Status / Manager / BoardValidation
of the investment programmeState department
(DRAF) control
CNAR - BRL
State infrastructures Partly self-financed
(20-30)
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2. Initial mission and organisation

• Financial sharing, risks sharing
• BRL collect charges and
• reimburse part of the capital (20 à 30)
• ensure the OM and asset sustainability
  (progressive cost-recovery / charges
  intercalaires)

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3. Fifty years of evolution, a necessary reform

• The first 30 years, numerous achievements
• Canal, main pumping station of 75 m3/s, 125
  secondary pumping stations, 5000 km de pipes, 9
  dams
• 140 000 ha equipped for pressurized irrigation
• Asset development of about 1,5 billions

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3. Fifty years of evolution, a necessary reform

• A double evolution
• The State is foccussing its interventions and
  capacities at a strategic / regulatory level
• Main orientations for large infrastructure
  development (national interest)
• Concession
• Financing (in partnership)
• Delegation to local authorities / empowerment
• Regional development (departments, municipalities)

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3. Fifty years of evolution, a necessary reform

• Decentralisation
• Act I (1982)
• Development of new irrigation schemes owned by
  local authorities or local WUAs
• BRL acting as a professional third party
  (development and OM)
• Act II (2004)
• Transfert of the State concession contract

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3. Fifty years of evolution, a necessary reform

• Financial difficulties, due to many reasons
• Agricultural difficulties
• Diversification non viable
• Extension services no more needed from BRL
  (farmers increased capacity and autonomy )
• Some administratives inefficiency
• State decreasing involvement
• Dramatic consequences the crisis
• Increasing deficits and debts, lack of decision
  and orientations
• Almost bankrupt in june 1992

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4. The reform new partnerships, more private
involvement

• Re-capitalising
• Public shareholder Région Languedoc-Roussillon
• Private shareholder looking for specialised
  partner (SAUR)
• 25 millions (58 of additional capital
  private)
• Restructuring
• Group
• Specialised subsidiaries, with more private
  partners involvement

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4. The reform new partnerships, more private
involvement
STATE
CNAR - BRL SEM Shareholders State, local
authorities, banks ...
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4. The reform new partnerships, more private
involvement
State / Regional and local authorities
Concession contract CNAR - BRL 3 main
functions 1) Development2) Asset management3)
Corporate / holding activities
BRL Ingenierie
BRL Espace Naturels
BRL Exploitation OM 49 private
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BRL Group capital
64 of the capital (22,58 ME) belongs to local
authorities
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BRL Group capital
Many subsidiaries
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4. The reform new partnerships, more private
involvement

• The results
• Benefits and growth
• More professionalisation / specialisation
• Métiers conception, asset management, OM
  (quality management)
• Contract management, capacity to answer to
  tenders and provide quality services on a
  competitive basis
• Customers relationships

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5. The future in Languedoc-Roussillon,a new
investment cycle

• New challenge in water management (multipuprose
  issues)
• Water provision to the coastal areas
• Rivers valleys
• inland areas (social / equity of chances
  cohésion des territoires)
• Question how the professional third party, and
  the PPP can answer to this challenge
• New cycle, new PPP
• Better financial balance (users / taxes)

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5. The future in Languedoc-Roussillon,a new
investment cycle
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6. Conclusions - Lessons learnt

• 1. Specificity of large infrastructures (asset
  management, OM) - Sense of scale and different
  public partnerships national / regional / local
• 2. Importance of risk management for sustainable
  private partnerships (contracts and
  flexibility)
• 3. Economic and financial analysis for balancing
  tax and user participation (cf. economic
  research) - Irrigation / Multipurpose

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6. Conclusions - Lessons learnt

• 4. Private efficiency flexibility / adaptability
  compare to administrative processes
• 5. Replicability at the international (Guerdane
  ) - BRL experience to
• select potential project
• initiate the project (discussion with other
  partners government / users) and develop it
  from the conception to the OM
• develop partnerships (local investors and
  partners)