February 5, 2015 / 9:44 AM / in 3 years

UPDATE 2-Vinci banks on quick end to French motorway row

* Vinci hopeful motorway row can be resolved in next few weeks

* Vinci among motorway operators who challenged state in court

* Sees French construction order intake at low-point in 2015 (Adds details, CEO quotes from news conference)

By Dominique Vidalon and Gilles Guillaume

PARIS, Feb 5 (Reuters) - The French government and motorway operators should resolve a dispute over road tolls in the next few weeks, paving the way for a long-awaited 3.2 billion euro ($3.66 billion) sector stimulus package, Vinci Chief Executive Xavier Huillard said.

France’s Socialist government wants to revise the motorway operators’ contracts, which it regards as too generous and the wrangle has hit operators’ shares in recent weeks.

A government decision last week to freeze toll-road tariffs in 2015 led to a sharp deterioration in relations between the government and motorway operators who had expected a 1.07 percent rise in tolls from Feb. 1.

The toll-road operators earlier this week went to France’s highest administrative court, the Council of State, to challenge the decision, claiming the government had exceeded its power.

“Obviously we have begun a contentious procedure. We remain open to finding a way out of the crisis,” Huillard told a news conference on Thursday.

“I‘m confident we will find a way out of the crisis in the next few weeks, building a relationship of trust between the state and the operators and paving the way for the motorway stimulus package that will help construction and public works.”

Last year the European Commission approved a 3.2 billion euro plan under which the operators agreed to bear the cost of upgrading French motorways in exchange for an average three-year extension of their concessions.

Implementation of the plan is on hold, however, as the state conducts a review of concession contracts.

Motorway operators generate cumulated annual toll receipts of around 9 billion euros, and Huillard pegged the shortfall from the tariff freeze at around 100 million euros.

The operators’ owners include Australia’s Macquarie , France’s Vinci and Eiffage, and Spain’s Abertis.

Vinci said late on Wednesday it expects 2015 revenue to decline slightly as a tough economic climate hurts its French contracting business and the toll freeze weighs on its motorway concessions unit.

Europe’s largest construction and concessions company, which operates half of France’s motorway concessions over a network of 4,386 kilometers, said motorway traffic grew 2.1 percent in 2014, generating toll receipts of 4.64 billion euros, a year-on-year increase of 3.3 percent.

Vinci said its construction business, the biggest contributor to group revenue, posted a 2.8 percent like-for-like fall in 2014 revenue. It forecast overall French contracting revenue would fall by 5-10 percent this year.

Huillard said on Thursday that construction order intake in France should touch a low-point during 2015. ($1 = 0.8801 euros) (Reporting by Dominique Vidalon; Editing by James Regan and Vincent Baby)

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