French railway workers are on strike on Thursday 21 November. The industry is angry, especially because of the opening of the railways to competition on a European scale. What is it about? What are the problems? Decipherment.
Opening of railway competition it is not a Franco-French matter but a European one as it arises from a 2016 regulation applied in all EU members. Anyone who wants to run trains on the rails of member countries has the right to do so, be they passengers or goods!
The theory is simple, the practice a little less so. Yes, because the railway market is very limited and very difficult to access. You must have permission to travel on this or that line. Then you have to have trains and people trained to drive them, which is very expensive. For example, a high-speed train today costs on average between 25 and 30 million euros. And as you can imagine, multiple trains are needed to exist in a market, so the bill goes up very quickly!
Italian and Spanish trains on French lines
For almost ten years, Italy has been at the forefront and is not waiting for European rules to be a pioneer in this area. In the country two players share the high speed… On one side the national company Trenitalia, on the other the private company Italo. Both make the same promise: starting from point A to arrive at point B on time. It is the service and prices that make the difference, prices which have decreased by 30% since the arrival of this new private operator.
In France, for three years now, the SNCF has no longer had a railway monopoly. Other operators operate there, somewhat unusual operators as they are the European counterparts of the SNCF: Trenitalia for Italy and Renfe for Spain.
Read alsoRail transport: Trenitalia arrives on French lines
It is this situation that worries railway unions in all European countries. Competitors of national companies have no public service obligations, they are there to produce results. So, to achieve this, they prefer profitable lines. These, 100% managed by historic operators, lose profitability for the latter, who thus lose market share. A lost margin that will not have been invested in the maintenance of the small lines or even in the hiring of railway workers, which has a social cost.
Find a compromise
In the UK, we chose full openness to competition in the 1990s before facing regulation by public authorities due to the system’s limitations: high prices, poorly maintained infrastructure and degraded quality of service.
An idea is therefore making its way among the various regulators: no longer authorize operation by lines, but by batches of lines. Concretely, a company can operate on a profitable line but will also have to operate on others that are not or only slightly so.
When it comes to European railways, everyone is walking on eggshells, be they states or operators. The long-term goal is to find a balance between this openness to competition and regulation, all to remain effective in maintaining quality of service and safety.
Read alsoObstructed railway routes in Europe
What are the main challenges faced by new railway operators entering the European market?
Interview between Time.news Editor and Railway Expert
Time.news Editor (T.E.): Welcome, and thank you for joining us today. We’re here to discuss the recent strike by French railway workers and the broader implications of opening the railways to competition across Europe. Can you give us a brief overview of what has triggered this strike?
Railway Expert (R.E.): Thank you for having me. The strike on November 21 is fundamentally rooted in the anger of railway workers towards the EU’s 2016 regulation that mandates the opening of railway services to competition. This is not just a national issue; it’s a European initiative aiming to foster competition among various rail operators.
T.E.: Interesting. So, could you explain how this competition works? Are there specific challenges that operators face to enter the market?
R.E.: Certainly! The regulation allows any company within the EU to operate train services in member countries, which is great in theory. However, the practicalities are a different story. The railway market is complex and difficult to access. New entrants must obtain permission to operate on specific lines and then invest significantly in the necessary infrastructure, including trains and qualified personnel.
T.E.: You mentioned that starting a railway operation can be quite costly. Can you delve into the financial implications of this competition?
R.E.: Absolutely. For instance, a high-speed train costs between 25 to 30 million euros. As you can imagine, for an operator to be competitive, they need a fleet of trains. The costs accumulate quickly, which poses a significant barrier to entry for new players, particularly smaller companies.
T.E.: It sounds pretty daunting. We’ve seen examples from other countries, like Italy. What’s happening there in terms of railway competition?
R.E.: Italy is a fascinating case. For nearly a decade, they’ve had competition in the high-speed rail sector. Trenitalia, the national operator, faces competition from Italo, a private operator. This competition has led to better services and more affordable prices—up to 30% lower since Italo entered the market. It’s a clear example of how competition can benefit consumers.
T.E.: And what about France? You mentioned that SNCF no longer holds a monopoly. How has this transition been for them?
R.E.: France has been undergoing a significant shift. For three years now, the SNCF has had to share the market with other European operators like Trenitalia and Renfe from Spain. This has certainly stirred the pot, giving rise to labor tensions. Workers are concerned about job security and service quality—it’s a transition fraught with uncertainty.
T.E.: Given these challenges, what do you think is the way forward for the railway sector in France?
R.E.: It’s a tricky path to navigate. Balancing the demand for competition, worker rights, and service quality will be crucial. Implementing gradual reforms that give existing workers job security while still fostering a competitive environment could help. Engaging in discussions with labor unions to address their concerns will be essential to ensure a harmonious transition.
T.E.: Thank you for sharing your insights. The complexity of the railway system and the implications of this transition are indeed significant topics that need continued discussion. We look forward to seeing how things unfold in the coming months!
R.E.: Thank you for having me. I hope the conversation continues, as it’s vital for both railway workers and passengers alike.