Fret SNCF forced to give up several routes to endorse fair competition
Fret SNCF, the rail freight subsidiary of state-owned French railway company SNCF, sustained another blow that makes its economic and operational future challenging, to say the least. The company will have to give up operations in 23 domestic freight routes that competitors will take over. This will result in a 20 per cent decrease in its turnover and pose another burden to the already financially challenged operator.
This development results from an EU-France agreement that followed the EU Commission’s investigation of Fret SNCF on the grounds of allegedly receiving illegal state aid between 2007-2019. The French Government and Brussels applied an “economic discontinuity plan” to amend the situation and provide more space for a level playing field within the French rail freight sector.
As a result, Fret SNCF will have to abandon several freight routes, starting 1 January 2024, while it will also be split into two separate companies– New Fret and New Maintenance, which will be operational in 2025. Some of the routes include the ‘rolling highways’ between Calais-Perpignan, Calais-Sète and Paris-Sète.
The situation will affect both domestic and international routes and companies like Viia, which uses Fret SNCF’s trains, but also Kombiverkehr and Hupac, which see flagship services like Ludwigshafen-Barcelona or Antwerp-Barcelona in need of new operators within France.
‘We still need the state’
Understandably, this whole situation is the product of questionable financial relations between Fret SNCF and the French state with links to possibly illegal state aid and the cancellation of a debt amounting to 5.3 billion euros. However, it seems that even now, Fret SNCF will need to rely again on the French state to survive the loss of operations and revenue.
Jean-Pierre Farandou, the CEO of SNCF, stated during a speech to the French National Assembly that his company would “need the state to bounce back from the forced loss of business and turnover.” He mentioned that not appealing the Commission’s decision was correct since the chances of losing the case were very high, considering the “solid basis” of the allegations. However, he underlined that if France wants a healthy and high-performing rail freight division, then support from the state is inevitable.