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Fret SNCF Faces Operational Shake-Up Following EU-France Agreement

Fret SNCF Faces Operational Shake-Up Following EU-France Agreement
foto: RAILTARGET Archive/Fret SNCF Faces Operational Shake-Up Following EU-France Agreement
22 / 09 / 2023

Fret SNCF, SNCF's rail freight company, faces significant operational challenges as a consequence of an EU-France accord. Following an EU Commission probe into the alleged illegal state aid received by the company from 2007-2019, it was determined that Fret SNCF must cede operations on 23 of its domestic freight routes to competitors.

This move is forecasted to lead to a 20% reduction in the firm's turnover, exacerbating the financial struggles of the already beleaguered operator. The decision for this overhaul stems from the "economic discontinuity plan" jointly implemented by the French Government and Brussels, aiming to foster competitive fairness within France's rail freight industry.

Commencing January 1, 2024, Fret SNCF will relinquish several freight routes, including but not limited to the 'rolling highways' from Calais to Perpignan, Calais to Sète, and Paris to Sète. Furthermore, by 2025, the company is slated for a division into two distinct entities: New Fret and New Maintenance. This development will not only impact domestic routes but also international ones. Notably, firms such as Viia, which depend on Fret SNCF's trains, and Kombiverkehr and Hupac, which operate key services between Ludwigshafen-Barcelona and Antwerp-Barcelona, will soon be scouting for new rail operators within the French territory.

Given the backdrop of potential illicit state aid and a cancelled debt reaching up to EUR 5.3 billion, Fret SNCF finds itself in a precarious position, necessitating further support from the French government. This sentiment was echoed by Jean-Pierre Farandou, SNCF's CEO, in a recent address to the French National Assembly. While acknowledging the validity of the Commission's accusations and the prudence in not challenging its decision, Farandou emphasized the need for state backing to recuperate from the impending operational and revenue downturn. He stressed that for France to sustain a robust rail freight sector, governmental support remains crucial.