France submits 3.6 bln euro motorway plan to Brussels

PARIS Fri May 16, 2014 8:25am EDT

PARIS May 16 (Reuters) - France said it would submit a 3.6 billion euro ($4.9 billion) plan to upgrade the country's motorways to EU competition watchdogs on Friday involving companies Vinci, Eiffage and Abertis unit Sanef.

After lengthy negotiations, the companies agreed with the French government late last year to bear the cost of the investments in exchange for an average three-year extension of their concessions.

Vinci has said it would inject around 2 billion euros and Sanef 700 million, leaving Eiffage with 900 million. French Transport Minister Frederic Cuvillier said he expected the upgrade work to create some 15,000 jobs.

The plan is a much-awaited boost to France's builders, which have been hit hard by deficit-reduction measures. Revenue from public works in France had been expected to drop 21 percent this year, with the sector seen shedding 12,000 jobs out of a total of 280,000.

The EU review aims to ensure that the motorway plan is not considered to be a form of state aid or unfair competition by antitrust regulators.

Brussels is expected to rule on the plan within about two months, according to a source familiar with the matter. Both Eiffage and Vinci have said they hope to launch the upgrade work in the first half of this year.

Neither Vinci, Eiffage nor Sanef could be immediately reached for comment.

Abertis told Reuters in an interview earlier this year that Sanef would need a capital hike of about 400 million euros to be able to support the investment.

For the plan to benefit all of France's construction industry, the government had said 55 percent of the upgrade work must go to small and medium businesses that are not subsidiaries of Eiffage, Vinci or Abertis. ($1 = 0.7291 Euros) (Reporting by Natalie Huet and Gilles Guillaume; Editing by James Regan)