April 17, 2018

Fret SNCF to be spun off in French rail freight reform

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Fret SNCF to be spun off in French rail freight reform SNCF

THE French prime minister, Mr Edouard Philippe announced during a visit to the Bonneuil-sur-Marne freight terminal in southern Paris on April 16 that French National Railways’ (SNCF) loss-making rail freight unit Fret SNCF will be recapitalised and spun off as a separate legal entity, albeit with SNCF retaining 100% of the capital.

The government believes this will allow Fret SNCF to operate according to economic and financial market rules. Following recapitalisation of Fret SNCF, the new company could be created in the first half of 2020.

Fret SNCF’s debts currently amount to around €4.3bn, representing more than half of the overall €7.9bn debt of SNCF Mobility.

The government wants Fret SNCF to develop a profitable business plan based on traffic growth, a reduction in overheads, improved efficiency, and the introduction of innovations in the offer to customers and train operation leading to the development of the digital freight train. Philippe has asked SNCF’s management to draw up an operational and industrial plan for the recovery of Fret SNCF’s finances and strengthening service quality.

The government says rail’s share of the freight market has halved since 1990 and is now only 11%, compared with 23% in Germany. Philippe has therefore asked the minister of transport, Mrs Elisabeth Borne, to finalise a series of actions designed to benefit rail freight. These include:
• renovation of facilities dedicated to rail freight such as service roads and freight-only lines
• securing quality train paths for freight, and
• moderation of increases in track access charges.

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