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France’s Eiffage calls for joint bids to beat China’s construction giants
Present in Senegal since 1926, the French group has extended its presence to West Africa. It is particularly targeting energy-related projects. But without strong consortiums it will be hard to beat Chinese competitors, it believes.
Eiffage, France’s third-largest construction and public works group behind Vinci and Bouygues, has extended its West African footprint from Senegal, where it has been established for nearly a century.
As the firm completes work on the Dakar-Diamniadio TER rail project, it begins the Grand-Tortuga gas mega-project, off the coast of Senegal and Mauritania.
In Abidjan, it is continuing work on the Félix-Houphouët-Boigny bridge, after delivering the Ghanaian port terminal of Tema at the end of 2019.
In order to continue its growth, the group is banking on the development of infrastructure linked to electrification, according to Ludovic Duplan, its international general manager for energy, and Guillaume Sauvé, its president of the civil engineering branch.
Until a few years ago, Senegal was Eiffage’s only stronghold in Africa. How far beyond have you expanded?
Guillaume Sauvé: Most of our international revenues are generated in Africa. These markets are complex and increasingly competitive. We are developing project by project in each country, each time on works that allow us to combine a particular technical skillset with civil engineering: desalination plants, water and waste treatment plants, hydraulic dams, etc.
The projects we are looking at are representative of those on which we have already worked. After the Singrobo-Ahouaty Ivorian dam, we are taking a close look at all hydroelectricity-related projects.
Our development depends on our ability to combine local teams with experts from elsewhere. This is what we are successfully carrying out on the dike site of the Grand-Tortue gas project, for which we have to immerse some 20 units as big as the Arc de Triomphe 10 km offshore.
Ludovic Duplan: The states want to densify the energy transmission networks and speed up distribution in the villages.
Senegal, where we have just delivered one of the first wind farms in West Africa, is well advanced in the field; Côte d’Ivoire is up and running; Benin and Togo are following suit. With our turnkey power plants, we are well positioned.
Do you think that after the crisis, states will be able to maintain their infrastructure spending?
G.S.: We don’t know what will happen in the next few months and whether there will still be projects on the table. We hope that there will be no pause in investment. We were looking to build hospitals: the importance of this market may grow.
T.D.: Unlike what happened in France, where business has come to a complete halt, we have maintained our African shipyards, making it easier to restart. We are only working on projects related to electricity, water and waste treatment which, at the height of the crisis, were considered to be in the public interest.
You started in April the construction site of Grand-Tortue. Its operational launch may be delayed. Does it affect the construction?
G.S.: The project continues. We are adapting to the decisions made by BP, including the adjustments requested. The oil and gas economy is not what it used to be. When you lose three or four months in a marine project, you end up with much less favourable weather conditions. And we have to wait several more months.
You hold the concession for the Dakar-Diamniadio motorway for twenty years. The authorities were planning to renegotiate the toll price downwards. Will you accede to their request?
G.S.: There can always be adjustments, but it has to be balanced. There is nothing to prevent the two parties from changing their contract, which is usual for this type of concession.
Are you looking at any other highway projects?
G.S. We will be attentive to opportunities in countries where we have already been active. This can only work if there is trust and dialogue with the authorities. Our presence in all segments of the value chain, in design, construction and operation, allows us to be competitive.
Eiffage’s name has been mentioned in relation to an equity stake in Dakar’s Blaise-Diagne International Airport. Are you interested?
G.S. This sector is even more complicated than that of highways and construction. Air traffic is one of the activities that is suffering most from the crisis. One wonders whether the economic balance of this project can be maintained.
You competed last year for contracts in Gabon and Guinea-Bissau won by Sinohydro. How do you position yourself in the face of competition from these giants who benefit from Eximbank’s support?
G.S.: We need to build consortia that can mobilize funding and be competitive. Eximbank is a real tool for Chinese groups. On the French and European side, other instruments can be mobilised. But responding to an offer costs several million euros each time. We’ll only do it if we have a chance.