Seine-Nord Canal Project Could Make The Cut, Audit Shows

Image (c) Canal Seine-Nord Europe

PARIS, Dec 11 (Reuters) – The cost of a stalled waterway project to link France’s Seine river to Belgium, Germany and the Netherlands could be cut by around 40 percent to 4.5 billion euros ($6.2 billion), a parliamentary report showed on Wednesday.

The report could pave the way for the 106-km (66-mile) Seine-Nord canal to go ahead. It was designed to relieve some of northern Europe’s most congested motorways by shifting freight from trucks to barges.

The biggest European canal project in 30 years and the first in France since World War II has been debated for over five years, while its costs have spiraled from an estimated 4 billion euros to more than 7 billion.

Last year, the costs prompted the Socialist government to suspend tenders for construction and to launch a financial audit of the project’s feasibility. Vinci, Bouygues and Eiffage had been among the companies competing to build the canal.

The audit, led by Socialist lawmaker Remi Pauvros, showed that financial and technical engineering adjustments could reduce costs by 3 billion euros to near the initial estimates, making the project more feasible.

French Transport Minister Frederic Cuvillier welcomed the report’s findings and said in a statement he would determine how to revive the stalled project “in the coming days”.

Pauvros said savings could be achieved by using 10 km of an existing canal in northern France and by entrusting a public entity, not a public-private partnership, to manage the project.

The French government would contribute 1 billion euros in funding and local authorities another 1 billion euros.

The European Union, which agreed in October to fund up to 40 percent of construction costs, would put up 2 billion, and the remaining 500 million would come from a European Investment Bank loan, Pauvros said.

If the project gets a definitive green light next year, the canal could come into service in 2022. The report expects construction of the project to create at least 10,000 jobs and operation of the canal to add around 50,000 industrial, logistics and transport sector jobs by 2050. ($1 = 0.7261 euros) (Reporting by Gilles Guillaune and Natalie Huet; editing by Jane Baird)

© 2013 Thomson Reuters. All rights reserved.

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