Briançon on the brink

At 1326 meters Briançon can boast to being the highest ski town in France. When the municipality invested 38 million euros in a gondola lift to link the center with the ski area of Prorel and the vast ski domain of Serre Chevalier the locals dreamt of riches brought by the white gold of the ski industry. It was a dream that looks like turning into a nightmare as the town is faced with bankruptcy.

Back in the 1980s Briançon was something of a socialist nirvana. As well as a ski resort the town invested in heated pavements, free underground car parks, a textile mill that closed after a year and “the most luxurious council houses in France” according to the former mayor, Robert de Caumont, who is still proud of his administration. Briançon also paid for a chairlift to link the Prorel domain with Puy Saint Andre at a cost of close to 4 million euros. Built on a slope facing due south there was rarely snow on the runs. The lift was removed in 1994 and sold to les Deux Alpes for a bargain basement price of 500,000 euros. De Caumont was booted out by furious residents in 1991 leaving them with repayments of 6 million euros per year until 2022. Nearly 40% of the municipal budget is used for this purpose.

Under control of the regional auditors office the town has had to undertake some serious belt tightening. A third of employees were fired and local services privatised. The town finally began to think that it was getting its head above water but an error with a contract has led to a disastrous compensation award and the prospect of local taxes being doubled.

In 1991 the town awarded the contract for supplying and managing water to the SAUR group for a period of 30 years. The contract was not legal and was canceled by the French supreme court. The SAUR sued for damages and has just been awarded 5.5 million euros in compensation by the court in Marseille.

The 300 days of sunshine per year enjoyed by the town are not the only resemblance with a Banana republic. The municipality has twice defaulted on its debts, costing banks around 15 million euros in interest holidays and reduced payments. Local taxes are 4 points above average. Business taxes are close to the legal limit of 28.4%. Businesses prefer to set up in other areas. Council leader Alain Bayrou, member of the ruling UMP party, has stated that if he wasn’t the mayor he would move due to local tax rates.

Bayrou says the banks are partly responsible for the situation the town finds itself. He thinks that they shouldn’t have loaned the money for the ski resort in the first place, believing they had a cast iron guarantee of being repaid by a local municipality whatever happened. George Masse of la banque Lyonnaise prefers to see it as the fault of global warming . The town abandoned control of Prorel to the Compagnie des Alpes in 2004 and is currently in dispute with neighbouring communes and the CdA over lift pass earnings.

Briançon has little room for manouvere. Paying the compensation would mean doubling local taxes. Impossible and probably illegal given that the community has one of the highest tax rates in France. The future doesn’t look bright and if the town does go bust Bayrou may be without a job as the administration will be taken over by a team appointed by the state prefect. Given the current economic circumstances it is hard to see the Hautes-Alpes bid for the 2018 Winter Olympics succeeding.

Before the CdA or Briançon contact us we would like to point that there is no danger of the ski area being affected. The whole domain is now managed by the well financed Compagnie des Alpes. However it is something to consider if you are thinking of investing in the town. Last night Bayrou and his team were trying to reach agreement with the opposition Socialists over whether to appeal the SAUR decision. An appeal which could cost a further 2 million euros. Agreement is far from certain, the Socialists accuse him of doing nothing to reduce the debt since he took over in 1991.

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