IFRIC 12, SIC 29, service concession arrangements disclosures

VINCI – Annual report – 31 December 2018

Industry: utilities, concessions, construction

12. Concession intangible assets (extract)
12.2 Main features of concession and PPP contracts – intangible asset model
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12.3 Commitments made under concession contracts – intangible asset model
Contractual investment, renewal or financing obligations

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Contractual investment obligations of motorway concession companies (ASF group, Cofiroute, Arcos, Arcour) mainly consist of undertakings made under concession contract, multi-year master contracts as part of the 2015 motorway stimulus plan and the new motorway investment plan approved in 2018. Progress with works by VINCI Autoroutes companies in 2018 led to a €199 million reduction in their commitments to €2,517 million at 31 December 2018.

As part of its development, VINCI Airports signed two contracts: one relating to the purchase of a 50.01% stake in London Gatwick airport and a concession contract for the development and operation of Belgrade Nikola Tesla airport, Serbia.

On 17 January 2018, France’s Prime Minister announced the government’s decision not to proceed with plans to build the proposed Notre Dame des Landes airport near Nantes. In June 2018, the Group received a letter of intent from the French government to terminate the concession contract due to run until 2021, thereby relieving VINCI of its investment obligations at 31 December 2018.

Collateral security connected with the financing of concessions
Some concession operating companies have given collateral security to guarantee the financing of their investments in infrastructure under concession. These break down as follows:

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13. PPP financial receivables (controlled companies) (extract)
13.2 Main features of concession and PPP contracts – financial asset and/or bifurcated model
The main features of concession and PPP contracts operated by controlled subsidiaries (financial asset and/or bifurcated model) are as follows:

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13.3 Commitments made under concession and PPP contracts – financial asset and/or bifurcated model
Contractual investment, renewal or financing obligations
Under their concession and/or PPP contracts, Group subsidiaries undertake to make investments. Where the financial asset or bifurcated model applies, they receive a guarantee of payment from the concession grantor in return for their investment commitment.

At 31 December 2018, the Group’s investment commitments with respect to concession and PPP contracts under the financial asset or bifurcated models amounted to €48 million (€52 million at 31 December 2017). The increase was mainly the result of the public-private partnership for the La Cotinière fishing port at Saint Pierre d’Oléron at VINCI Construction.

Collateral security connected with the financing of PPPs
Some companies have given collateral security to guarantee the financing of their investments relating to infrastructure under concession. This collateral amounted to €153 million at 31 December 2018 (€156 million at 31 December 2017), including Caraibus in Martinique for €69 million, Park Azur in Nice for €35 million and the MMArena stadium in Le Mans for €32 million.

14. Concession and PPP contracts of companies accounted for under the equity method
14.1 Main features of concession and PPP contracts of companies accounted for under the equity method

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14.2 Commitments made under concession and PPP contracts of companies accounted for under the equity method
The commitments made under concession and PPP contracts of companies accounted for under the equity method are presented in Note E.10.3 “Commitments made in respect of associates and joint ventures”.

E. Investments in other companies (extract)
10.3 Commitments made in respect of associates and joint ventures
At 31 December 2018, Group funding commitments to equity-accounted companies (via capital or subordinated loans) amounted to €162 million (€126 million at 31 December 2017). Changes in the period mainly relate to entities in the Concessions business, including the company that holds the concession for Arturo Merino Benitez International Airport in Santiago, Chile, for which the Group made a funding commitment of €87 million at 31 December 2018.

Collateral security has also been granted in the form of pledges of shares in companies accounted for under the equity method. The net carrying amount of the shares pledged at 31 December 2018 was €39 million and included shares in WVB East End Partners (the company holding the concession for the Ohio River Bridges – East End Crossing project in the United States) for €19 million SMTPC (the holder of the concession for the Prado Carénage road tunnel in Marseille) for €10 million and Synérail (GSM-R – Global System for Mobile communication-Railway public-private partnership contract) for €10 million.

10.4 Investment commitments given by associates and joint ventures
At 31 December 2018, the Group’s share of investment commitments given by these companies amounted to €642 million (€1,004 million at 31 December 2017). These commitments relate mainly to projects involving infrastructure under construction in the Concessions business, the Via 40 Express motorway between the cities of Bogotá and Girardot in Colombia (€241 million), the new section of the A7 motorway in Germany (€116 million), sections 7 and 8 of the M11 motorway between Moscow and St Petersburg (€96 million) and Santiago airport in Chile (€94 million). The €361 million decrease in these commitments during the year was due to progress with works carried out on projects, including the Moscow-St Petersburg motorway, Santiago airport in Chile, and the Regina Bypass in Canada.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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