The European Investment Bank (EIB) is to provide financing of ECU 122 million (FRF 805 million(1)) for the Montpellier tramway project. The Bank has just advanced an initial loan of ECU 57 million (FRF 375 million) to DAM - District de l'Agglomération de Montpellier (the Montpellier public authority) towards implementation of the project and will subsequently arrange, in partnership with several banking institutions, financing for a further ECU 65 million (FRF 430 million). The finance contract with DAM was signed today, 15 July, at the EIB's headquarters in Luxembourg, by Mr Georges Frèche, President of the District and Mayor of Montpellier, and Ms Ariane Obolensky, Vice-President of the EIB.

The project is designed to alleviate the traffic problems in the conurbation. Public transport, relying solely on buses, has virtually reached saturation point on certain lines and a modern tramway, a non-polluting form of transport helping to reduce the volume of traffic, will have a beneficial impact on the quality of the urban environment.

The investment scheme planned covers construction of a tramline crossing the centre of Montpellier and linking Paillade with Port-Marianne. It will improve transport links with most of the schools and universities, business districts and hospitals, thereby promoting a more even pattern of economic and social development.

This new line, running north-west/south-east, will be 15km long in all and will serve 28 stations. The rolling stock will consist of 28 tramcar sets with a capacity of 220 passengers each. With a service frequency of 4 minutes during peak hours, the tramline's capacity will be 3 300 passengers per hour in each direction.

The project also includes setting up transfer points and adjacent car parks as well as remodelling the bus network in line with the overall public transport system. It is scheduled to start commercial operation in the second half of the year 2000.

In France, EIB financing for urban infrastructure amounted to nearly FRF 13 billion over the period 1991-1996. In the field of transport, the EIB has focused on two types of project: on the construction of by-passes and ring roads and on development of public transport, road and parking systems. The underlying aim of all these schemes has been to improve traffic conditions and reduce urban traffic with its attendant problems.In the public transport sector, Strasbourg, Nantes and St-Etienne have benefited from EIB financing for construction of their tramway systems and Rouen for its metro-bus. Lyons for its part attracted a loan to extend line B of its metro and Rennes likewise for its light railway project. In all, more than FRF 3.3 billion has been made available for major public transport schemes in France since 1991.Within the European Union as a whole, nearly FRF 22 bn was advanced over the same period for urban transport projects. Major examples include metro systems for Athens, Lisbon, Manchester, the West Midlands, Barcelona, Bilbao and Valencia and tramway systems for Rostock and Sheffield.

(1) The conversion rates used by the EIB for statistical purposes during the current quarter are those obtaining on 30 June 1997, when ECU 1 = FRF 6.58, GBP 0.68, IEP 0.75, USD 1.13.