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Economy

ORIGINAL FRENCH ARTICLE: Petite histoire de la libéralisation

by Clotilde Mathieu

French Rail: A Short History of Liberalization

Translated Friday 19 July 2013, by Isabelle Métral

Since the first EU directive in 1991, the rail sector has been constantly suffering from under-investment and job cuts.

Reduce costs, push up fares, freeze investments and build prestigious high-speed lines to gloss over the facts : that’s the short history of the twenty years of the rail network’s liberalization. In 1997, in compliance with the 1991 EU directive, France split the management of the rail infrastructure from the running of train services, and set up Réseaux Ferrés de France (RFF: the French Rail Network). This first stage paved the way for a new economic model for French Rail. Along two lines: decrease in investment according to short term profitability prospects, and preparation for the arrival of rival companies to the SNCF, which almost exclusively entailed job cuts in order to lower the costs.

In January 2007 rail freight services were opened up to competition, then three years later came the turn of international passenger services. As a result, road transport exploded and 10,000 jobs were lost in the freight services, according to CGT figures. “We have not succeeded in making it possible to develop freight services by rail,” SNCF president Guillaume Pepy conceded. But he did not heed the lesson. The opening of the French passenger rail services to competition, “the fourth rail pack”, is to be implemented next, probably in 2019. And the SNCF boss has a plan for reducing costs by approximately 150 million euros in 2013 and by 700 million by 2015 on four expense items: real estate, information systems, purchases, overhead expenses.

To which must be added a 32 billion euro debt for RFF, inflated by the decrease in State subsidies, with financial costs that diminish - by 1.2 billion euro each year - the resources earmarked for the maintenance and adequate development of the network.
One after another, reports end with the same conclusions: outdated rail tracks, trains forced to “go-slow” along 3,000km (nearly 1,900 miles) against 1.000 ten years ago. The network is breathing its last.

Whether the whistle for a reversal of the rail policy will be blown, the rail reform planned for the Autumn will show.


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