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In 2006, the government sold its stakes in highway companies for 14.8 billion euros. Twenty years later, those same companies pay out several billion euros in dividends to their shareholders each year, while tolls continue to rise. How did a public service designed to be self-financing become, in just a few decades, one of France’s most criticized sources of revenue? We’ve broken down the French highway scandal for you, with a focus on what it reveals about the risk currently facing the rail sector:
To understand the cost of highways, we must first look back at a system that, originally, was anything but a profit-making machine.
The first section of a French highway opened in 1951 between Lille and Carvin, the predecessor of today’s A1. With limited postwar funding, the government entrusted construction and operation to companies under its control: motorists paid a toll, but the money was used primarily to repay construction costs and maintain the network. Later, the “back-to-back” system made it possible to finance new highways using revenue from existing, already profitable highways, in exchange for extending the duration of the concessions. Originally, therefore, the highway remained a public tool for regional development, not a financial product.
At the turn of the 2000s, France’s public debt stood at 63.9% of GDP. Rather than retaining toll revenue spread out over several decades, the government chose to realize an immediate gain by selling its stakes in the highway companies. However, at the time of the sale, these companies were already largely amortized and generating stable, predictable profits—assets that several economic analyses at the time deemed to be significantly undervalued in the sale price.
In 2006, the government sold its stakes for 14.8 billion euros. The Vinci and Eiffage groups (in partnership with Macquarie) and the Spanish company Abertis became the owners of virtually all of the long-standing concession companies. A 2020 Senate report subsequently estimated that these terms of sale resulted in a loss of revenue of several billion euros for the government, a finding that has since been echoed by several oversight agencies.
Since privatization, one trend has remained consistent: the price paid by car buyers has been rising almost continuously, while dealership profits have reached record highs.
On a trip from Paris to Bordeaux (about 585 km), a driver now pays about €60 in tolls, compared to about €52 in 2012 and about €50 in the early 2000s—a rise of more than 20% in just twenty years, not including fuel and vehicle wear and tear.
Rates rose by +4.75% in February 2023—one of the sharpest increases in recent decades—and then by approximately +3.23% in 2024. This ongoing increase is due to contractual provisions that index rates to inflation and investment costs, even when inflation itself is slowing—a contractual mechanism, not merely an economic fluctuation.
According to the annual report from the Transportation Regulatory Authority, revenue for highway concession companies is projected to reach 12.8 billion euros in 2024 (up 4.3% year-over-year), with 4.3 billion euros in profits—meaning that more than one out of every three euros paid in tolls ends up as profit. By way of comparison, the SNCF posted a net profit of approximately 1.6 billion euros that same year on revenue of 43.4 billion euros, representing a net margin of only 3.6 to 4 percent: a far less profitable model, despite the fact that the service is used more frequently by the French public on a daily basis.
Behind the numbers, the crux of the scandal lies in the very structure of the concession contracts, which are designed to last for decades and are virtually impossible to renegotiate once signed.
The concessions signed in 2006 span approximately three decades and bind the government through 2031–2036. This duration significantly limits the government’s ability to regain control: any attempt to cap tolls, require additional work, or shorten the duration of the concessions almost automatically results in financial compensation to the concession companies.
In December 2014, Environment Minister Ségolène Royal announced a freeze on toll rates, sparking outrage among highway operators, who threatened to take legal action. A few months later, in April 2015, she finally signed—along with then-Minister of the Economy Emmanuel Macron, a memorandum of understanding with all the highway operators: a document that remained confidential for a long time, the actual contents of which were only made public later by the Council of State.
This 2015 protocol contains a so-called “fiscal neutrality” clause, which requires the government to automatically compensate highway concessionaires in the event of a new tax: in practice, any tax increase results either in higher tolls or in an extension of the concession terms. One provision, Article 38, theoretically allows the government to terminate a concession contract in the public interest, but the cost of doing so is estimated at between 20 and 50 billion euros for contracts expiring between 2031 and 2036.
For HOURRAIL!, this mechanism is by no means trivial: it directly highlights the risk currently facing the French rail network.
The contrast is stark: while highway operators post a net margin of over 33% on a delegated public service, the SNCF hovers around 3.6% to 4%, despite operating a much more extensive network used daily by millions of French people. Today, the government directly manages only a small portion of the national highway network, as Nelo Magalhães, a researcher and author of the book, reminds us Pour concrete, build roads, on our podcast :
“The government has practically nothing left. So the highways are privately owned. There’s just a tiny bit of national highway left under government control—1,000 km—really not much at all. There are a million kilometers of roads in France, so the government really has nothing left. And it has transferred everything to the departmental roads. And then there’s the municipal network. And in fact, who pays for it? It’s the departmental councils and the municipalities.” - Nelo Magalhães
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The history of highways shows that once a legal framework is set in stone, it becomes nearly impossible to change it without exorbitant costs to the government. Applying the same logic of profitability to the rail network—reducing public investment, introducing competition, and fragmenting the network—would pose a similar risk to small-line railways and commuter trains, benefiting only the most profitable high-speed rail routes.
Owning a car represents a significant expense for a household: fuel, insurance, maintenance—not to mention tolls that are constantly rising. Taking the train means avoiding this dependence on a system where profits go primarily to private shareholders, even though the infrastructure was originally funded by all taxpayers.
The privatization of French highways is far from a simple change of ownership: it is the transformation of public infrastructure into a profit-making machine, locked into contracts spanning several decades that the government is now struggling to renegotiate. This story can be seen as a warning for the rail network, which remains far less profitable—and far more useful to the general public—than the highways.
Why did the government privatize the highways in 2006? To quickly reduce its public debt—which stood at 63.9% of GDP at the time—by collecting 14.8 billion euros rather than relying on toll revenue spread out over several decades.
Who owns France's highways today? Three main groups—Vinci, Eiffage, and the Spanish company Abertis—have shared virtually the entire concession network since 2006.
Are tolls rising faster than inflation? Yes, almost automatically: +4.75% in 2023, +3.23% in 2024—an increase every year since privatization.
How much do highway concession companies earn each year? 4.3 billion euros in profits in 2024, on revenue of 12.8 billion, representing a net margin of more than 33%.
Can the government reverse its decision? In theory, yes, under Article 38, which allows for the termination of a concession contract, but the cost is estimated at between 20 and 50 billion euros.
Want to travel differently, without relying on a model that primarily benefits private shareholders? Feel free to subscribe to our newsletter To get plenty of inspiration and great tips for traveling without a plane or a car (it's free!), join the HOURRAIL Club! :
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The HOURRAIL Club: the community for low-carbon travel and slow travel
Issue du monde de la communication et des médias, Sophie est Responsable éditoriale chez HOURRAIL ! depuis août 2024. Elle est notamment derrière le contenu éditorial du site ainsi que La Locomissive (de l'inspiration voyage bas carbone et des bons plans, un jeudi sur deux, gratuitement dans ta boîte mail !).
Convaincue que les changements d’habitude passent par la transformation de nos imaginaires, elle s’attache à montrer qu’il est possible de voyager autrement, de manière plus consciente, plus lente et plus joyeuse. Son objectif : rendre le slow travel accessible à toutes et tous, à travers des astuces, des décryptages et surtout, de nouveaux récits.
