with historic challenges
presidents will have seats on the infrastructure manager board,” says Pepy. SNCF has also started working more closely with RFF in anticipation of the reform, for example by trying to optimise train paths. “This is one of the main problems on the network especially for freight trains where their paths are often severely damaged by the paths given to regional trains,” Pepy explains. “Freight trains need fixed paths allocated in advance.”
Recession bites
The worsening economic situation in Europe is starting to take its toll. French consumption fell by 1.5% in the first quarter of this year leading to a reduction in mobility. Railfreight suffered a 3% drop in volume while passenger traffic declined by between 1 and 1.5%. “This is the first time in a decade that we have suffered such a dramatic impact from the economy,” Pepy declares.
“This will be a French model rather than a German, Belgian, British or any other model. The idea of having one single system
for Europe is foolish.” Guillaume Pepy
to implement the principle of “who
pays decides,” and to prepare the railway for competition.
While Pepy says SNCF’s debt of
ƒ7.3bn in 2012 - down from ƒ8.3bn in 2011 - is manageable because the organisation generates sufficient revenue and profit, RFF still has long- term debts of ƒ31bn which need to be stabilised and eventually reduced over the next few years. A study is currently underway to see what can realistically be achieved. “There will be no attempt to hide the debt - the goal is to finance
IRJ June 2013
the system properly and set up a real business model,” Pepy says. “We believe a balance can be achieved.” France will implement EU regulations
to introduce competitive tendering for the provision of local and regional services in 2019. At present, the French regions pay out a lot of money for these rail services, but have little say in how the money is spent and no control over fares. The regions also lack the authority to integrate rail with other modes. “Without waiting for 2019, the responsibilities of the regions will be expanded and two of the regional
SNCF has reacted swiftly by launching two initiatives designed to reduce production costs by ƒ800m over five years, and headquarters and administrative costs by ƒ700m during the next three years. The objective is to gain two points of Ebitda. The French railway system operates with around ƒ100bn of capital of which ƒ60bn is for infrastructure and ƒ40bn rolling stock. Pepy says this makes it vital to improve what he describes as capital rotation. In other words either reducing the asset base or getting more out of assets for example by improving rolling stock utilisation.
One of the casualties of the economic downturn has been SNCF’s prestigious TGV network where the annual growth, which the steady expansion of the network has delivered since the launch of the first high-speed services in 1981,
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