Gone are the days when TGV and TER success more than compensated for rail freight losses. These three sectors, in different ways, face fresh challenges which call for a new approach.

The French rail transport world is in trouble. Despite the success recorded by the TGV and the excellent progress achieved by the TER network, it is now clear that the business models currently used are either no longer pertinent or are at breaking point in many areas. The recent downgrading of SNCF by the Moody’s rating agency comes as a timely reminder that it will not indefinitely be possible for the national operator to consider the French rail network as a fortress protected by the public purse. The status-quo is ultimately tantamount to guaranteed decline, particularly with the advent of competition from our Swiss and German neighbours. In these two countries, an explicit productivity-enhancing contract has been signed with the legacy operators covering both train services and infrastructure maintenance. In France the requisite adaptations have been postponed time and time again, as best illustrated by the following few examples.

SNCF Freight, despite several recovery plans, continues to be a massive loss-maker. TER regional passenger services have improved markedly yet production costs are a hotly-debated issue even within SNCF circles, being deemed 30% higher than those of potential competitors. The time has also come for the Regions to start reflecting on the pertinence of continuing to operate train services on certain lines with a very low occupancy rate. Lastly the business model used for the TGV- a brand envied by so many countries - is being sorely tested , according to SNCF, by a sharp rise in RFF track-access fees. In fact, these increases stem partly from the high network-maintenance fees charged the Infrastructure Manager (RFF) by SNCF. Here too, productivity is the key issue.

It therefore no longer holds true that the success of TGV and TER services more than compensates for the failings of the rail freight business. In their different ways, these three activities are faced with new challenges that call for a serious rethink. The railway sector, with its two landmark public entities SNCF and RFF, must be issued by the public authorities an ambitious roadmap not confined solely to the building of new high-speed line (HSLs).  Three reform routes must be pursued at all costs to achieve this organisational and economic transformation.

The debate over the division of tasks as between SNCF and RFF must be initiated with an open mind. Should there be a return to a single public railway holding as exists in Switzerland and Germany, or should a watertight partition be maintained between SNCF and RFF? And whichever option is favoured, what is to become of entities like the Directorate for railway operations, stations and connections, or with the SNCF infrastructure branch?

Regional passenger train services must successfully negotiate the second phase of the regionalisation process in line with the recommendations of the Grignon report. How else but through the opening-up of competition – even if limited to a few lines – to try and demonstrate that improvements are possible and costs can be reduced.

Lastly, as regards SNCF Freight, the commitments made at the Grenelle Environment Summit simply cannot be dismissed lightly. Unless the legacy railway operator succeeds in responding to national ambitions, then other avenues – including possible recourse to the subsidiary company option – should resolutely be explored. The secret here is to focus on the needs of shippers and to regain their confidence. In other words, the forthcoming presidential elections must not be used as an excuse for sweeping key issues under the carpet. These are firm and clear objectives which the French railway system needs to be pursuing. Services will be improved and traffic volumes increased only if sustainable productivity gains can be achieved, coupled with a positive and dynamic staff management policy approach. In this way, the situation will unravel and the rail sector will then make its full contribution towards promoting the general interest.