March 30, 2018

Will the unions stop French rail reform in its tracks?

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TWO of the four French railway unions joined air traffic controllers and other public sector workers in a national strike on March 22 in protest against president Mr Emanuel Macron’s plans for labour reform and the perception that rather than seeking a better deal for state workers, who number more than 5 million, he wants to cut back the public sector through redundancies and the use of contract workers. This is Macron’s first real test since he came to power in May 2017.

For the railway unions, March 22 is a precursor to a three-month war of attrition against rail reform following the publication on February 15 of the Spinetta report on the future of rail. The campaign starts on April 3 and runs until June 28 with strikes in five-day blocks with two consecutive days of strikes followed by three days of normal working, which will be crippling for both rail users and French National Railways (SNCF).

Under a timetable unveiled by the French prime minister, Mr Edouard Philippe, and transport minister, Mrs Elisabeth Borne, on February 26, March was supposed to be devoted to considering how to open the rail network to competition, followed in mid-March with talks on how to reorganise SNCF and create a situation whereby infrastructure manager SNCF Network can guarantee equitable access to the network for all operators.

At the beginning of this month the government was due to start looking at the modernisation of the social sector of the railway, such as terms of employment. The government wants to phase out the system which effectively guarantees railway employees a job for life with a retirement age of 50-55.

Borne gave a guarantee that there will be a wide discussion on the proposed reforms including with the unions and described the planned strikes as “incomprehensible” when the discussions had barely started. However, the unions are angered by a draft law presented on March 14, which would allow the government to legislate by decree to reform SNCF, introduce competition, and end the generous employment terms for new employees. The unions also complain that their proposals were ignored by Spinetta and claim that the government has no real intention to negotiate.

The government wants to agree the key principles for railway reform before the summer.

The prime minister emphasised the urgency of the need for reform in his speech on February 26. “For too long, we did not dare to reform SNCF,” Philippe said. “For too long, we resolved to accept the degradation of public service.”

Referring to the Spinetta report, Philippe said: “The diagnosis is severe, but sadly correct. The situation is alarming and untenable. The French, whether they take the train or not, are paying more and more each year for a public service which operates less and less well.”

Philippe echoed one of the Spinetta report’s conclusions that the lion’s share of railway investment has been devoted to building the high-speed network during the last 40 years, to the detriment of the conventional network.

“The situation today is that our network is in an advanced state of decrepitude - our infrastructure is on average twice as old as that in Germany,” Philippe pointed out. “On 20% of the network the operating speed has been reduced to ensure passenger safety. This is twice what it was 10 years ago.”

Referring to the Paris RER and regional TER services, Philippe said: “Almost one in six RER trains and one in 10 TER trains arrive late, which is double that of our German and Dutch neighbours.”

Philippe points out that the railway receives €14bn of financial support each year, more than the combined allocation to the police and gendarmerie. He says railway support is 22% higher than it was 10 years ago and yet the service is still deteriorating.

“The Spinetta report reveals a simple truth: running a train in France costs 30% more than elsewhere,” Philippe said, which he says is partly due to the ageing infrastructure and SNCF’s failure to cut costs.

The prime minister is also concerned about SNCF’s mounting debt which he says “threatens to engulf the system.” Philippe says the debt has grown from €20bn to €50bn in 20 years and now equals the national education budget. SNCF pays €1.5bn each year in interest payments, so if nothing is done, the debt will grow by another €15bn during the next 10 years.

The prime minister is proposing a new railway pact between the state, SNCF and railway employees that will result in a better train service, a better economic model for SNCF, a clear vision for railway employees, and a guarantee that each euro will be spent efficiently.

Philippe also gave assurances that funding to renovate the network will be increased by 50% over the next 10 years, railway pensions will not be reformed, and SNCF will not be privatised. The government has also rejected Spinetta’s recommendation to close around 9000km of lines.

Jacques Chirac and Nicolas Sarkozy buckled under union pressure in their attempts to reform working practices, pensions and the railways during the beginning of their presidencies, so the question is whether Macron has the stomach for a long battle with the unions to achieve his goals. Vive la France.

David Briginshaw

David Briginshaw joined IRJ in 1982 as associate editor, and was appointed editor-in-chief in 2001. He has travelled the world extensively interviewing many of the CEOs and senior managers of the world's railways and transit systems which has given him an in-depth knowledge of the global railway industry.

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