Abstract
The franchising of public service activities (concessions de service public) has traditionally played a significant role in infrastructural provision in France, notably in the public utility sectors of electricity, gas and water. Concession accounting is troubled by two major problems. First, operating capability maintenance (OCM) is not achieved, primarily because of the failure to tackle the issue of backlog depreciation. In sectors with high capital intensity, long asset lives and marked technological change, the restrictive legislation pertaining to asset revaluation and, hence, depreciation, aggravates this OCM problem. Second, financial capital maintenance (FCM) is not achieved, particularly when amortization of the enterprise's investment in those concession assets which are surrendered to public authorities (I'amortissement de caducité) is abandoned. This evaluation of French practice is policy relevant for two distinct reasons. First, given the significance of concessions in France, it is important to establish a coherent translation of the principles of the Plan comptable général 1982 to concession assets; this will not be achieved by the proposals of the 1992 Committee on Concessions, whose implementation would represent a retreat from economic relevance. Second, the concession model is experiencing both a revival in francophone Africa and extension to the United Kingdom.