PERPIGNAN – LUXEMBOURG RAIL MOTORWAY:

A RELEVANT ALTERNATIVE TO ROAD

A STRATEGY COMPLYING WITH SUSTAINABLE DEVELOPMENT

The new rail-road link between Perpignan in the south of France and Bettembourg in the Grand Duchy of Luxembourg is going rapidly ahead. Thus the first major rail-road link in Europe is making excellent progress. This launch is the result of political decisions aiming to develop new freight transport means which are alternative to road. The axis North-South of France targeted by this rail service is indeed suffering high level of freight traffics.

Besides his economical benefit, the rail-road link offers a lot of advantages by reducing the traffic congestion, by improving security on road, by saving energy, by decreasing greenhouse gas emissions and environmental pollution.

Starting from summer 2007, it will consist of trains made up of 20 special Modalohr railcars carrying 40 standard unaccompanied semi trailers over more than 1000 km. The system enables simultaneous and very fast loading and unloading without using heavy equipment. There is no further specific investment required. All trailers with standard dimensions are allowed. Loading/unloading operations take place on the platforms at Le Boulou (Perpignan) and Bettembourg (Luxembourg).

The new rail service offers a lot of benefits:

·  Operating seven days a week, even on Sundays and Bank Holidays when access to French motorways is strictly forbidden to lorries.

·  44 tons semi trailers are allowed which enables a weight increase of 17% compared to maximum authorized 40 tons.

High quality of service: secured track time slots have been booked (in order to ensure service punctuality), train tracking, booking online, Modalohr technology reliability, fast loading and unloading and safe journeys through France. Furthermore, this rail service is a cost and time saving alternative compared to road transportation.

This alternative service will enable a modal shift of long-distance freight road transport.

The project is supported from the very beginning by the French and Luxembourg governments. Several public and private shareholders are involved: the Caisse des Dépôts et des Consignations, Autoroutes du Sud de la France (overtaken by Vinci Concessions), Modalohr, SNCF-Participations and CFL. In March 2006, they set up LORRY-RAIL S.A., a company whose mission is to develop, promote and market the new services offered by the new rail-road link. The project is also supported by the French network operator (Réseau Ferré de France) and professional organizations like the Association des Utilisateurs du Transport de Fret and Transport et Logistique de France.

In Le Boulou, near Perpignan, the civil engineering work of the loading/unloading platform is almost completed. The French government, through the French Transport Infrastructure Financing Agency (AFITF), is contributing to the financing of the platform and is assuming the cost of adapting the existing national rail network throughout the French part of the route.

In Bettembourg, the civil-engineering work on the platform is progressing on schedule. Test controls will begin shortly. The Luxembourg government, through the Railway Fund, is responsible for financing investment in the platform and in the tracks on the Luxembourg territory.

LORRY-RAIL has bought 45 Modalohr NA-type articulated railcars, each one able to transport 2 semi trailers. This is a major investment, financed by the company's own funds and through bank loans. LORRY-RAIL investment in 2006 and 2007 in assets will reach €26 million.

This new service complies with sustainable development and testifies to the strong commitment to general interest from the shareholders of Lorry Rail Company.

During the launch period LORRY-RAIL will be offering a capacity of 30.000 trailers a year. The company has already planned to increase the frequency on the axis Perpignan-Luxembourg.

Finally the purpose of Lorry Rail is to develop rail-road links on new routes and to continue on the sustainable development way.

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