Will French rail cooperative Railcoop stay alive?
Railcoop, a French rail cooperative, has six months to find a way to remain afloat after closing its main freight service and failing to secure sufficient funds. The deadline is due to the fact that the company was recently put under receivership by the Cahors Commercial Court. Railcoop now needs to find investors and capital after its projects did not succeed as planned.
The decision to place Railcoop in receivership came after it only raised 383,500 euros out of the 500,000 it needed to pay its employees and suppliers at the end of September, as French media Usine Nouvelle stated. Railcoop’s downward trajectory was visible already in April, when its only rail freight single wagonload service connecting the Aveyron and Lot regions with Toulouse, launched in 2021, was discontinued for lack of demand. This led to Railcoop missing out on a vital 4,5 million euro loan from the Occitanie Region, which was conditional on the service remaining active.
These funds were supposed to cover the hole left in 2022 when the company closed with a loss of 4,3 million euros. Railcoop is claiming that last year’s negative result was due to the necessary initial investments to launch the company’s rail freight activities. The cooperative said it was supposed to get the money through bank financing, which it failed to obtain. Another issue is that Railcoop never managed to find the money to set off its main project: a passenger service from Lyon to Bordeaux via Montluçon, Roanne, and Limoges. This line was abandoned by SNCF in 2014 and Railcoop aimed at taking it over and reactivating it, according to Usine Nouvelle.
Railcoop and the French rail freight market
The Railcoop cooperative entered the French rail market in November 2019. It was created by 32 members and it is the first rail cooperative in the country. Its aim was to develop a private rail company in a market largely dominated by state-owned group SNCF, including the freight sector with Fret SNCF. Railcoop’s struggles to establish itself in the French rail freight market can be seen as a sign of the difficulties of creating a solid private sector in the country.
On the other hand, this shift needs to happen, especially considering the latest developments involving Fret SNCF, which has been forced by the European Commission to give up its combined transport services to private entities to increase market fairness. The question of whether the French private sector is up to the task is significantly relevant and it is considered a big challenge, as Solène Garcin-Berson, the new general delegate of the French Rail Association highlighted.