Interview with Jean-Pierre Audoux, Delegate-General of the French Railway Industries Association (FIF)

The FIF Delegate-General paints a very sombre picture of the sector's future, particularly in France where, in addition to the emergence of " second rank" new players, the squeeze put on the two infrastructure "megaprojects" (SNIT and Greater Paris) has finally dampened the determination of the most fervent enthusiasts".

Ville, Rail& Transports : The Berlin Innotrans Expo held every other year is the perfect shopwindow for world railway manufacturing industries. What in your view are the most significant developments   observed since 2010?

Jean-Pierre Audoux : On the international front, I would single-out  the relative slowdown observed on  Chinese railway equipment markets, the emergence of Russia and neighbouring countries like Kazakhstan and Azerbaijan as major world markets, and the Hitachi UK breakthrough with the Agility Trains contract worth  € 3.5 billion secured in the face of strong competition from  leading  European train builders.

In Europe the contrast is between the sustained very high-level of  activities in the German and British railway markets, ,and those of Southern European countries which are shrinking at an alarming pace.

We can also observe or confirm the emergence of  several so-called "second-rank" European manufacturers, so completely foiling all forecasts of consolidation around the three major manufacturers as imagined by some sector specialists just a few years ago.

VR&T: How is the French market developing?

What we can confirm is the trend towards a sharp deceleration of public investments in rolling-stock procurement, not to mention the ongoing thorough reappraisal of the SNIT and Greater Paris rail transport infrastructure "megaprogrammes".

Another source of concern is the intensification of difficulties encountered  by the sector SMEs and SMIs  exposed to  takeover or buy-out bids by companies from emerging countries (China, India, Russia, ...) as a direct result.

VR& T. : Could you be more specific regarding the situation and prospects for each activity segment going forward?

J.-P. A. On the high-speed front, SNCF have confirmed  an order for forty TGV Duplex sets but  the picture beyond 2020 looks distinctly uncertain in France. Anything could happen, ranging from a zero-order scenario for TGV sets to one involving massive new orders by SNCF should it decide to replace the existing fleet of TGV PSE and Atlantic units which by then will have been in revenue service  for some 40 and 30 years respectively!

Where TET inter-regional trains are concerned, there have been no fresh developments since the headline-making news of three years ago, nor does any agenda currently exist whether in terms of rolling-stock specifications,  lines to be prioritised or  projected investment volumes.  Yet at the time the talk was all about replacing Corail and Téoz fleet units for an outlay of some € 3 billion over ten years.

As regards the TER fleet , a  subject you touched upon in your last interview with the SNCF CEO for Ville, Rail & Transports, orders for Régiolis and Regio2N sets globally stagnate around the 300-mark, as against a declared aggregate need for 1860 units.

When you add to this the many uncertainties  prevailing over the future implementation of all or part of the SNIT project or of the  Greater-Paris master plan, the obvious conclusion to be drawn is that these key French railway-manufacturing market segments are challenged by a most indeterminate future.

VR& T : But did not Guillaume Pépy in this same interview recall that he knew of no rolling-stock procurement contract which had not translated into solid orders from public customers.....

J.-P. A. Events until the recent past would tend to validate this analysis, particularly where TER trains are concerned, but latterly old certainties have become increasingly shaky, as borne out by the following few telling examples:

- the order for 400 freight locos (type BB475000) which SNCF had planned to purchase in 2004  downsized by half (200 units), with delivery of the last batch out of the 200 units completed this year,

- prior to the hike in track-usage fees and on the eve of the economic crisis, SNCF had made known its intention to replace its fleet of First-Generation TGVs as from 2016, but this order today is off-agenda,

- regarding the TER fleet, all will of course depend on the Regions's capacity to secure new ad-hoc funding , but also on their determination to continue procuring Régiolis and Regio2N sets, bearing in mind that competition from aggressive coach operators offering regular-interval services as an alternative to TER services is looming large on the horizon......

- as regards the tram-train market for 200 units , orders to date have reduced to 41 sets, so bringing the manufacturer's production line and his French sub-contractors' workload to a gringing halt. Utmost caution is therefore called for, and there is even serious cause for concern going forward.

VR& T. But surely some activity sectors are performing well in France...

J.-P. A. Of course we do have a number of  dynamic segments : RATP  Metro/RER and STIF tramway investments, like those of other conurbations, continue to develop at a fast pace. This collective determination to press ahead will of course next be tested in the context of discussions on the next phase of the TCSP project (worth € 400-500 million).

Another noteworthy development is the network rehabilitation effort (€ 1.8-1.9 billion spent on 900km of track in 2011) initiated six years ago, and which will hopefully be sustained at least at current levels. This momentum, short of leading to network rejuvenation, should  save it from technical obsolescence if nothing else.

All in all, barring significant developments in the different projects mentioned earlier, the French railway manufacturing sector can expect a sharp reduction of 20-30% in turnover for 2015-2016 ( € 3 billion in 2011).

VR& T. In a few words, what exactly is the current status of the rail-sector strategic committee project driven by your Association (FIF)?

J.-P. A. Äs mentioned by your publication at the time, Louis Nègre in April 2012  submitted to the Industry Minister the draft final report of the "Ambition 2020" steering committee complete with 24 project proposals designed to safeguard the future of our sector. Following the political changes  that have since occurred it remains to be seen whether the committee findings are  taken forward by the new Industry Minister.

Concurrently with this, and on the strength of a tendering call issued by Oséo Bank as part of the strategic investment programme, we are working hard to progress Project First (Funding aid to small and medium-size enterprises) in support of the sector restructuring process. We earnestly hope that real advances will be made over the coming two months with these two projects considered vital for the future well-being of the railway industrial sector.

VR& T: Lastly, which are the priorities for the French railway industrial sector?

J.-P. A. From the outside, what we need is a clear horizon consistent with the spirit of the Grenelle Railway Summit's recommendations  on public railway investments. From the inside, the sector must be  made more coherent, and its players must develop a more collective approach if it is to meet the globalisation challenge.

The projects  themselves are clearly identified, so too are the objectives. We want to consolidate our position in the world rankings, to create an addititional 2000-3000 jobs in France by 2020 and, last but not least, to double our exports by this same timeline with €3 billion as the turnover target.

Interviewer: François DUMONT