Orlyval is a light Métro of type VAL with small gauge in the south of Paris between the station of the RERB of Antony and the Aéroport of Orly. Matra Transport which had produced a number of VAL (Véhicule Automatique Léger) systems in Lille, was highly interested in establishing a VAL system in Paris. This was critical to their strategic plans to grow the business. In 1986, they made a spontaneous proposal to build a system from Anthony to Orly, for which they would arrange the finance and operation. That proposal arrived right at the moment where privatisation and concessions were gaining popularity as highly effective solutions as compared to public firm and agency delivery.
Orlyval is both a technical success and an economic failure. The project is still operational, viable as market demand for the moment covers operating costs. However market demand is a little more than half as expected in the 1991 business case. It is a spectacular failure on a number of accounts:
First, the privatisation approach, using a concession, has developed a sour taste amongst the banking and investment community but to the great joy of the public institution communities.
Secondly, the banks as well as the other investors, had to swallow a loss of 1.5 billion FF, with the only hope that if traffic turns upwards they may be in a position to recover 500,000 billion FF.
In this risky project for the private investors and the banks, the process of risk analysis was rendered ineffective due to the relatively low individual stakes on the part of a wide range of investors (Matra Transfinex, Crédit Lyonnais, Crédit local de France, Indosuez, BNP, CIC, Crédit National, Barclays Bank, NNB, Air Inter, RATP), the political climate which led banks to forgo risk analyses, and the euphoria which led this whole group to discount critical studies.
However, on the up side, the project delivery was a fantastic success being delivered on time, and even earlier than estimated for a standard turn-key contract.
The system has been in operation since 1991 but went in to bankruptcy in 1992 and ownership was transferred to public metro operator RATP.