While most Europe leaders are slashing capital spending, the French are full steam ahead with their $39 billion “Le Grand Paris” project. Find out how this play could make you rich for the next two decades…
Sarkozy envisioned it, but it’s his successor that will be getting all the credit.
The former French President, probably more well-known for his swagger image than his governing prowess – conceptualized a massive economic action plan that would turn the world’s most romantic city into a global business hub of the future.
Sadly, his big dream wasn’t enough to garner him a second term in office – nor will he leave a lasting legacy in French history books.
Instead, the legacy will likely belong to President Francois Hollande, whom Sarkozy lost to last May.
Having Hollande in the driver seat, Paris 2.0 is now fast becoming a reality.
He has no choice.
With a stalling economy and unemployment at a 13-year high, France is depending on its biggest city to reverse the downward spiral.
By overhauling Paris’ aging infrastructure, the government hopes the plan will give their country’s economy a much-needed shot in the arm and hopefully revive it for the long-haul.
This is in stark contrast to the rest of Europe, where governments are pulling up their purse strings to reduce deficits and obey austerity measures.
The biggest component to the grand plan is upgrading and expanding the public transportation system in France’s capital.
Currently, the Paris Metro network carries a mind-boggling 8.5 million passengers per day – 21 percent more than a decade ago.
By comparison, that’s about the same amount of ridership as New York’s MTA.
Yet, Paris’ population continues to climb, and is clearly outgrowing what the Metro is efficiently able to handle.
As a result, businesses are suffering with declining productivity due to slow, lengthy commutes.
According to Medef, an employers’ federation for the city, economic growth in the greater Paris area is now half the rate of Madrid and London.
In Madrid, the government has been throwing its weight behind a myriad of infrastructure improvements over the last decade as it bids for a third straight time to host a summer Olympics.
In London, construction is well underway for a massive east-west railway line through the capital. Upon completion in 2018, the Crossrail project will add 9 new stations and 26 miles of new tunnels to the Tube system.
But Le Grand Paris easily dwarfs both Madrid’s ($2 billion) and London’s ($23 billion) construction projects – making it the largest and most ambitious that Europe has ever seen.
When it’s all said and down, Paris could see 124 miles of new metro lines and 72 new stations in and around the capital by 2030.
Not only will this colossal scheme provide much needed jobs for Parisians over the next twenty years, but some of France’s largest engineering and construction companies could see their bottom lines (and share prices) grow substantially.
That’s certainly a welcome respite.
The domestic construction sector has been in decline since the recession, so a project of this magnitude will definitely help to reverse the tide.
Construction giant Vinci SA (DG) will likely throw its name in the bidding hat, as is Eiffage SA (FGR) and transportation specialist Alstom SA (ALO).
But one firm to really keep a close eye on is Bouygues SA (EN).
Bouygues operates in two sectors: Telecommunications/Media and Construction.
Their construction division specializes in building and public works projects, community development planning, and transportation and infrastructure construction.
Although no RFP’s related to Le Grand Paris have officially been unveiled, Bouygues already announced its intentions to bid on key parts of the project.
What’s more, the Company pro-actively launched an online public consultation initiative last summer dubbed “Le Grand Paris on the Web”.
To be updated every 6 months, the survey will aggregate data related to housing, jobs and transport – the three major priorities expressed by Internet users in the Ile de France / Greater Paris region.
Their research efforts could very well bolster Bouygues’s chances of landing significant contracts when the time comes.
In closing, the French look more determined than ever to buck the economic trend with an extraordinary stimulus plan.
Over the coming decades, struggling businesses are going to get a once-in-a-lifetime opportunity to firmly put themselves back in the black.
With the ball already rolling for Le Grand Paris, France could be one of the first back on the road to recovery. Investors should look for exposure into this country’s infrastructure to take full advantage.
Yours in profits,
for Top Stock Millionaire
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