Grand Paris Express
Context
- Grand Paris Express is a metro rail project being delivered by Société du Grand Paris (SGP) that will expand the Paris Metro network to approximately double its size.
- The project involves the design and construction of 200 km of new fully-automated metro across four lines (Lines 15–18) to the north, south, east, and west of Paris, with services typically operating at a 2–3 minute headway (90 seconds during peak).
- The new metro lines will be 90% underground, provide 68 new stations (an increase of 20% across the network), and will provide connections to three international airports.
- The project has a total budget of EUR35 billion (USD42.6 billion).
- Delivery of the project is highly complex with approximately 450 contracts in execution as of June 2021.
Problem
- Highly complex megaprojects such as Grand Paris Express can suffer from a lack of centralised government engineering, a lack of project management staff with the capability and experience of delivering projects of this scale, and restrictions associated with their being delivered under the organisational structure and governance processes of a traditional government agency. This can lead to unfavourable project outcomes such as increased costs and time delays.
- In its early phases, the project was being procured in the traditional French model where an 80% complete detailed design was produced by the client team before engaging a contractor. This was done with the objective of de-risking the project. However, for large complex projects of this type a failure to involve contractors early can result in the selection of an inappropriate packaging strategy or contracting model which may result in lower bidder participation and increased interface risk. Additionally, a lack of collaboration between the design and contracting teams may result in technical challenges not being addressed efficiently.
- A Cour des comptes (the French Government’s ‘Court of Audit’) review published in December 2017 found this governance structure struggled from the planning to construction stages as the supervisory board had insufficient ability to influence management. This resulted in a lack of transparency on cost and schedule changes as cost estimates slipped from EUR19 billion (USD22.4 billion) in 2010 to EUR35 billion (USD42.6 billion) at present.
- The operation and maintenance of the new lines is not within the scope of the project and remains under the authority of the existing operators and authorities in charge of the Paris Region metro and railway. Consequently, there is no single point of responsibility for the lifecycle costs of the project. The procurement process must therefore anticipate the requirements of operators who do not participate directly to the Grand Paris Express.
Improvement
- SGP is a public company (‘Etablissement Public Industriel et Commercial’) established in 2010 dedicated to the development of the new metro network of Greater Paris. It is governed by a board of three directors and supervised by a supervisory board consisting of representatives from the State and local authorities.
- The organisation employed over 820 staff as of April 2021 with a target of over 1000 by the end of 2021. The majority are specialists in delivering transport infrastructure across a variety of disciplines such as engineering, interface management, and project and contract management.
- The purpose of the organisation is to provide a dedicated public body that is accountable for delivering the project (including raising external financing, construction of the new lines, stations, and other facilities, acquisition of rolling stock, and development within and around the stations) and to centralise the specialist expertise required to oversee and direct a long-term highly complex infrastructure program into a single organisation.
- Because the organisation is fully owned by the French State it is not subject to private sector bankruptcy law, with the French state ultimately responsible for its financial obligations in the event of insolvency.
- SGP is classified by rating agencies as a government-related issuer/entity (GRI/GRE) with a quality of credit aligned to that of the Republic of France and the funding of the project is fully secured by the periodic issuance of green bonds together with EU subsidies and affected tax revenues. The choice of a dedicated self financed agency enables to
- receive fiscal ressources paid by the parisian taxpayers => to be immune to budgetary stop & go (otherwise not cost efficient) and to remain consensual overtime (the one who pay are the one who will use the most the infrastructure)
- raise financing => to accelerate the delivery of the infrastructure (otherwise not timely efficient : 20 years rather than 50 years to complete the project)
- The award of the 2024 Summer Olympic Games to Paris led to a change in the transportation requirements and the sequencing of the works. These combined changes, as well as the identification of fragilities in the management of the project as a whole led to SGP initiating a review into the project’s organisation and procurement strategy to investigate potential opportunities for improvement. The findings of this review led to SGP
- Strengthening its internal project management resources
- Reinforce the relationship with the entities in charge of operation and maintenance of the Paris Region metro and railway
- Developing a new contractual model that combined design and construction activities for certain sections of the project, and launching competitive dialogues for the award of such contracts. The aim of this approach was to increase efficiency and to ensure cost and schedule reliability while maintaining the expected level of performance, and allow a greater involvement from industry in early design.
Stakeholders involved
- SGP – statutory delivery authority
- French Government
- Municipal and regional councils
- RAPT – French public transport operator
- Ile de France Mobilités – Paris Region transportation authority
- SYSTRA – Delivery partner (integrated project management approach)
- Advisors and contractors – various.
Timeline
- June 2010 – SGP established
- 2010-2015 – Planning and Design activities and public consultations undertaken
- June 2016 – Construction commenced
- July 2017 – Paris awarded the 2024 Summer Olympic Games
- 2024 – Expected completion of first new line
- 2030 – Expected completion of all lines.
Results / impact
- Use of a delivery agency responsible for delivering the project resulted in a concentration of resources and expertise required to deliver the project in a timely and efficient manner and avoided potential inefficiencies arising from government agency-led delivery.
- The dialogue process with the private sector through market consultation helped SGP to adopt a contractual and packaging model that was able to be bid competitively by more, better engaged tenderers and contributed to a higher level of program assurance, clearer and better optimised interfaces, fairer risk allocation and management, and more effective schedule and cost planning.
Key lessons learnt
- The Cour des comptes review found that SGP’s supervisory board needs strong technical and financial expertise in delivery of large infrastructure projects in addition to political appointees if it is to be able to provide adequate oversight of project approvals, contracts, funding, cost, and delivery program.
- The review also found that it is critical that SGP clearly defines its optimal workforce sizing within the delivery agency (split into direct employees and consultants) over a multi-year period to ensure there is sufficient lead time for scaling the organisation’s workforce. Optimising its workforce size would enable SGP to continue delivering its responsibilities as the project advances from planning, to procurement, to construction and its workforce requirements change accordingly.
- Use of the traditional procurement models of progressing to a nearly-completed level of design before engaging contractors can be inappropriate for large and complex programs such as the Grand Paris Express that are technically challenging with a large number of packages and interfaces. Instead, engaging contractors early in the design process can yield greater de-risking benefits.
Grand Paris Express official homepage
Australian Constructors Association Industry: Practice Note - Early works packaging
Last Updated:
25 November 2021