Inter-regional rail services in France: A lost opportunity to test the new competition regime

As announced at the interministerial meeting on regional development (Ciadt of May 11, 2010) the agreement between the French State and the SNCF on inter-regional rail services in France is due to be signed in the next few days.

This agreement between the State and the SNCF concerns inter-regional rail services performed by Corail, Teoz and InterCités trains and Lunéa overnight trains. On account of their mode of operation by the incumbent operator, these services are losing more than 200 million Euros every year.
 
The new market entrants, members of AFRA (Association Française du Rail) indicated their interest in these services during the first half of 2010 and requested access to a competitive tendering procedure. This request, to the French Ministry of Transport, has gone unanswered.
 
The organisation of a competitive tender for inter-regional rail services in France could have been an excellent opportunity for the French State to test the new competition regime and therefore provide positive impetus for the opening up of the regional rail network.
 
This opening would also have enabled the new operators to demonstrate their ability to run high quality inter-regional rail services at lower cost in a reputedly difficult market.
 
After several weeks of strikes in the French public transport network, AFRA takes this opportunity to record its keen sense of disappointment. Once again, France has shown its preference for existing monopoly providers and chosen to ignore the provisions of European Regulation 1370/2007, which regulates the award of contracts for public passenger transport services.
 
The French government has therefore closed the door to competition on the inter-regional rail services market for at least another three years until 2013, at a time when it is struggling to find the resources necessary for the sustainable funding of its railway network.
 
Finally, the agreement between the State and the SNCF on inter-regional rail services could be used by the stakeholders to oppose the introduction of new « cabotage » services by international trains on the grounds that they threaten the economic viability of these transport services of general economic interest.
 
AFRA once again calls upon the French government to initiate an ambitious policy to open up the French railway market to competition, especially in view of the fact that the SNCF is now one of the leading railway operators in neighbouring countries.
 
At the very least, the new entrants expect an explicit road map early in 2011 with a view to preparing the competitive tendering procedure for inter-regional rail services in 2013.

AFRA (l’Association Française du Rail) is a not-for-profit association founded in March 2009. It brings together railway operators, which consider that the French market for freight and passenger transport will only be able to develop fully within an open, competitive and regulated market.

AFRA currently has the following railway operators among its members: CFTA Voyageurs, Trenitalia, Veolia Transport in passenger transport and Euro Cargo Rail – a subsidiary of DB Schenker Rail – Europorte, Colas Rail and T3M in freight transport.

Contact /Jacques Malécot: AFRA Chief Executive. Tel: +33 6 27 22 83 44