Rewritten Article
Annual Funding Needed by SNCF to Secure Network: 4.5 Billion Euros; Sourcing the Required Finances
France's aging rail network, a treasure trove of railway tracks that spans the globe, needs a serious facelift, but not without a battle. You see, over the years, the investments have been heavily skewed towards high-speed lines. The high-speed chase has paid off, with blazing speeds on long hauls. However, journeys like Intercity and TER, representing 80% of overall traffic, suffer a sharp contrast. These unsung heroes are plagued by an accumulation of delays and numerous issues on the line. But hey, they're the backbone, connecting regions and getting French folks where they need to be.
The clock is ticking. After years of procrastination, a series of workshops, "Ambition France Transports," are underway, trying to establish a new financing system for public transportation by 2040. The aim? To save the day by avoiding dipping into the red. SNCF sounds the alarm: there's a storm brewing as early as 2028, and it demands a storm of investments to prevent calamities. The railway company is asking for big bucks to maintain rails, ballast, and those aging copper wires (catenaries) supplying locomotives with power.
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At the end of last year, SNCF President Jean-Pierre Farandou pointed a finger at Germany, calling it out for not doing enough and now grappling with "major reliability problems," with train regularity down to 60%. But just how much does it cost to revamp the network today? SNCF, quoting BFMTV, says we need 4.5 billion euros annually to prevent the network from deteriorating and train regularity from crashing. This is much higher than the three billion euros planned in 2022 in the performance contract between the state and SNCF Réseau.
From 2027, an additional 1.5 billion euros is needed, and fast. There's an urgent need to find these funds, warns Farandou, who's readying himself to depart the group. But in the face of budgetary austerity, where are we going to find this sum? SNCF Réseau currently relies on several funding sources, including profits. However, will SNCF be able to contribute over half a billion euros in additional funds each year?
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So, what other options are on the table? BFMTV suggests hiking train ticket prices, but that pill might be hard to swallow for passengers. Another possibility is to get the competition to chip in, like Renfe or Trenitalia. They could cough up more in track access charges and shoulder the burden of less profitable or even money-losing lines to balance things out.
Other potential elements include recovering part of the tax revenues generated by the European carbon compensation system for air and road transport (ETS), as well as from Energy Savings Certificates (ESCs). More intriguingly, the much-anticipated measure, which will be debated in "Ambition France Transports," is the motorway windfall. Major players like Vinci, Eiffage, or Abertis generate around 13 billion euros in annual turnover, and some experts argue that a percentage of this could be allocated to the transport sector.
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According to the Minister of Transport, "the resources generated by motorways could be clearly allocated to the transport sector." Farandou echoed this at the end of 2024, stating, "Transport issues are fundamental if we want to maintain reliability, frequency, and performance."
All in all, funding France's rail network requires a comprehensive approach, considering budgetary constraints and the urgent need for additional funds. Here are some potential strategies:
- Train Ticket Price Increases: Implementing graduated ticket price increases can help generate additional revenue, especially when accompanied by dynamic pricing or discounts for off-peak travel. However, it's essential to balance revenue needs with passenger affordability.
- Competition Contributions: Encouraging competition among rail operators can lead to efficiency gains, potentially boosting contributions from private companies. This can be achieved through open-access rail services or competitive bidding processes for rail concessions.
- Carbon Compensation System Revenues: Leveraging carbon compensation schemes can provide significant funding. By implementing carbon pricing mechanisms, railways can benefit from revenues generated by sectors contributing to CO2 emissions, helping promote sustainable transport.
- Motorway Windfall: Utilizing surplus funds from motorway tolls or other transportation sectors can supplement rail investments, Diverting part of these revenues to rail modernization projects.
These strategies require careful planning, political will, and coordination across various stakeholders to ensure that France's rail network receives the modernization it deserves.
- To address the urgent need for funding in France's public-transit sector, particularly the rail network, the government is exploring various options such as graduated ticket price increases, leveraging carbon compensation system revenues, and utilizing surplus funds from motorway tolls.
- As high-speed lines have received significant investments over the years, the 80% of overall traffic represented by Intercity and TER journeys are plagued by delays and issues, a situation that SNCF fears could lead to significant problems by 2028, requiring investments of around 4.5 billion euros annually to prevent deterioration and maintain regularity.
- In order to find the necessary funds, SNCF is looking at alternative sources beyond its current ones, such as encouraging competition among rail operators like Renfe or Trenitalia, who could contribute more in track access charges, and balancing their involvement with less profitable or even money-losing lines.
