Contact

Menu

Article

Grand Paris Express: A groundbreaking infrastructure project

Grand Paris Express, a metro rail project that will expand the Paris Metro network to twice its size, will connect most of the suburbs in Île-de-France, increasing its attractiveness to businesses and residents. With such large-scale infrastructure projects being scrutinized for their climate footprint, we will look at the progress made with the construction work and its sustainability aspects.

May 31, 2023

Werner Richli and Heinz Tschabold

Senior Portfolio Manager

The city center of Paris as we know it today dates back to the era of Emperor Napoleon III, who commissioned Baron Haussmann to design and reconstruct the city center between 1853 and 1870. The plans involved integrating the surrounding suburbs and linking them to the center of Paris via boulevards, and it is interesting to note that back then a similar approach was followed to that of the current "Grand Paris Express" (GPE) project.

The GPE project began in 2010, with construction having been underway for over seven years now. The idea is to expand the transport network surrounding Paris by means of a circular railway that will provide better connections within the Île-de-France region as well as making it a more attractive location to businesses and residents alike. The first metro sections are scheduled to be up and running in time for the opening of the Summer Olympics in Paris next year. In this Thematic Insight, we look at the construction progress made so far and showcase this opportunity for sustainable construction, as large-scale infrastructure projects in particular are increasingly being scrutinized with regard to their climate footprint.

Focus on the expansion of local public transport

The circular railway is a huge project and comprises an urban area with over 11 million inhabitants – bigger than that of Greater London.1 Cumulative expenditure amounted to over EUR 26 billion as of the end of 2021 and will increase to EUR 40 billion by the end of the construction period. This includes expenditure on modernizing the existing network as well as real estate developments at the planned metro stations. With the GPE, the Île-de-France department intended to connect municipalities to key transport hubs by extending existing metro lines (11 and 14) and building four new ones (15 to 18). The plan is set to relieve the city center of private traffic and at the same time boost the attractiveness of outlying municipalities. Responsibility for the project lies with the Société du Grand Paris, which was established in 2010.2 According to the plan, the 68 metro stations – most of which are being built from scratch – will be surrounded by new housing, along with office and laboratory space for corporate offices as well as research and development centers. The extension to the metro network covers a distance of 200 kilometers, corresponding exactly to the length of the existing network. Around 90% of it runs underground, at a depth of up to 50 meters. The driverless trains will operate at an average speed of 65 km/h and carry more than three million passengers per day. As things stand, the GPE has 158 construction sites in operation and 29 tunnel boring machines in use – the latter having already bored their way through 90 kilometers of rock. Despite the COVID-19 pandemic and the temporary standstill for work on the construction sites, the project is likely to be completed on schedule between 2024 and 2030. Key railway interchanges and individual sections such as line 14 from Orly airport to the Olympics site have now been completed.

City rankings: Paris has the potential to catch up on infrastructure

Paris is one of the top locations in Europe after London in the latest city rankings.3 Compared with previous assessments of the "attractiveness of Paris as a future business location," survey results have steadily increased since 2015. Paris already scores well in terms of basic provision such as health, education, and legal certainty.3 There is the potential for it to catch up on the infrastructure front, which is why the expansion of local public transportation is intended to make Greater Paris an even more attractive proposition for international corporates.

Most attractive cities for business relocations

Sources: Global Cities Investment Monitor 2022, Credit Suisse; based on Global Cities Investment Monitor 2022 (slide 12)

High expectations for sustainability

The GPE investment program will not only create a giant building site by 2030 but will also lead to the construction of new urban districts around the metro stations. In addition to better access and shorter commuting times, sustainability criteria and the careful use of natural spaces are of central importance not only to the construction project itself but also to the new urban developments. Implementation is also intended to contribute toward the achievement of the emission reduction targets set out in the Paris Agreement (Paris Climate Conference 2015, COP 21). On current estimates, between 27 and 51 million tons of CO2 will be saved between the start of operation and 2070.4

Reduction in CO2 emissions during the construction period

Since 37% of all global CO2 emissions are generated by construction activity and buildings,5 Société du Grand Paris is committed to reducing carbon emissions from the construction of the metro by 25% compared with conventional building methods. In particular, concrete and steel are responsible for over 70% of emissions. The measures being implemented by the construction companies involved – including Bouygues, Eiffage, and Vinci – include low-carbon and fiber-reinforced concrete, the conversion of extracted clay into an alternative binder, as well as the reuse of excavated material. With regard to biodiversity and the circular economy, Société du Grand Paris points out that since the launch of the project, 49% of the material excavated (target: 70%) has already been assigned to other purposes, and an area of 38 hectares (out of a planned 80 ha) has been reforested and restored to nature.6 A total of 87,500 trees will be planted.

City of tomorrow

Along the GPE network and metro stations, Société du Grand Paris is promoting the sustainable conversion of the public space into smart green cities,7 as cities in particular have a high carbon footprint. Here the focus is on three areas:

  • Energy efficiency and the use of renewable energy: The aim is to produce electricity from renewable sources as independently as possible. In terms of solar power in urban areas, potential solutions include innovations such as movable and folding solar surfaces, photovoltaic facade constructions, and autonomous solar lighting. In addition, heat could be stored in the road surface and used in neighboring buildings and infrastructure via a heat pump system.8
  • Mobility: The lowering of carbon emissions and air pollution, as well as the efficient use of transportation, are top priorities. The focus is on expanding e-mobility and digital solutions for efficient traffic management. This requires networks, battery storage, and charging infrastructure.
  • Green spaces and biodiversity: The need for recreation areas and pressure on use in urban areas are steadily increasing. Climate and nature protection meet the demands of increasing numbers of people seeking relaxation. Cities of the future must respond to climate change and the loss of biodiversity with nature-based solutions: Green walls and roof gardens to cool the concrete desert, wet areas as water traps, moss walls that trap fine dust, and more habitats for animals and plants across the board.

New concepts for the city of tomorrow

Sources: Vinci; Credit Suisse; based on https://www.vinci.com/vinci.nsf/de/item/neue-konzepte-stadt-morgen.htm; downloaded on March 31, 2023

Conclusion

Get in touch with Asset Management

Contact us to learn about exciting investment opportunities. We are here to help you achieve your investment goals.

The individuals mentioned above only conduct regulated activities in the jurisdiction(s) where they are properly licensed, where relevant.

The companies mentioned above are meant for illustration purposes only and are not intended as a solicitation or offer to buy or sell any interest or any investment.

https://www.handelsblatt.com/politik/international/ranking-2022-die-zehn-groessten-staedte-europas/24486600.html; Greater London 9.4 million inhabitants, downloaded on March 14, 2023
2 Société du Grand Paris, investor presentation, February 2023
3 Global Cities Investment Monitor 2022; Greater Paris Investment Agency
4 Société du Grand Paris, February 2023, Significant impact of the investments
5 2022 Global Status Report for Buildings and Construction, UN Environment Program, November 9, 2022
6 Société du Grand Paris, Annual Report 2021, activities 2021
7 Vinci Immobilier https://www.vinci.com/vinci.nsf/de/item/neue-konzepte-stadt-morgen.html, downloaded on March 14, 2023
8 Vinci Construction: Power Road® by Eurovia; https://www.power-road.com/en/, downloaded on March 14, 2023
9 With the “pure-play” concept, we mean companies that have at least 50% in revenues directly attributable to the corresponding theme.

This material constitutes marketing material of Credit Suisse Group AG and/or its affiliates (hereafter "CS"). This material does not constitute or form part of an offer or invitation to issue or sell, or of a solicitation of an offer to subscribe or buy, any securities or other financial instruments, or enter into any other financial transaction, nor does it constitute an inducement or incitement to participate in any product, offering or investment. This marketing material is not a contractually binding document or an information document required by any legislative provision. Nothing in this material constitutes investment research or investment advice and may not be relied upon. It is not tailored to your individual circumstances, or otherwise constitutes a personal recommendation, and is not sufficient to take an investment decision. The information and views expressed herein are those of CS at the time of writing and are subject to change at any time without notice. They are derived from sources believed to be reliable. CS provides no guarantee with regard to the content and completeness of the information and where legally possible does not accept any liability for losses that might arise from making use of the information. If nothing is indicated to the contrary, all figures are unaudited. The information provided herein is for the exclusive use of the recipient. The information provided in this material may change after the date of this material without notice and CS has no obligation to update the information. This material may contain information that is licensed and/or protected under intellectual property rights of the licensors and property right holders. Nothing in this material shall be construed to impose any liability on the licensors or property right holders. Unauthorised copying of the information of the licensors or property right holders is strictly prohibited. This material may not be forwarded or distributed to any other person and may not be reproduced. Any forwarding, distribution or reproduction is unauthorized and may result in a violation of the U.S. Securities Act of 1933, as amended (the “Securities Act”). In addition, there may be conflicts of interest with regard to the investment. In connection with the provision of services, Credit Suisse AG and/or its affiliates may pay third parties or receive from third parties, as part of their fee or otherwise, a one-time or recurring fee (e.g., issuing commissions, placement commissions or trailer fees). Prospective investors should independently and carefully assess (with their tax, legal and financial advisers) the specific risks described in available materials, and applicable legal, regulatory, credit, tax and accounting consequences prior to making any investment decision.

Distributor: UBS Asset Management (Singapore) SGR, 9 Penang Road; Singapur 238459