News from RFF, owner-manager of the French rail tracks

Posted on February 28, 2008 by Matthieu Desiderio

Réseau Ferré de France (RFF), the French rail infrastructure owner and managing company published a monthly newsletter. Here are a couple briefs from the last issue published on Wednesday, February 27, 2008.

The PPP of the southwest Atlantic HSR line

RFF will use innovative financing to fund the future South Europe Atlantic HSR line. RFF expects the PPP contract agreement will allow a faster development of its national rail network. The new HSR segment between Tours (Centre) and Bordeaux (Aquitaine, west) will be financed through a PPP and operated under a concession contract by a private consortium.

RFF recently released the projects specifications for construction and operation of the new line to three candidates consortiums lead respectively by Bouygues, Eiffage, and Vinci. All teams have six month to provide RFF with proposals that respect technical, economical and sustainable development criterias for this project.

The winner consortium will be designated in 2009 when RFF will award the winner with the concession contract. Construction and operation cost will be covered by rail toll fees received by the concessionnaire during the length of the concession contract.

Estimated cost of the project reaches €7.2 billion from which €6 billion will be used for the construction. In a second phase, the line will be extended toward Spain and Toulouse (southwest France), but nothing has been announced yet concerning the financing of this part of the project.

Optimizing network costs

Hubert du Mesnil, RFF President, declared that to ensure sustainable development of the transport sector, the French railway network needs to be more economically competitive to keep up with its environmental advantages.

A meeting was organized by RFF in February 2008 to discuss economic issues with officials from private companies and SNCF that are involved in railtracks work and construction. Hubert du Mesnil argued in favor of cost reductions in the rail sector (only industrial sector where price growth seems to be unescapable).

Hubert du Mesnil expects RFF to review on a regular basis the results and the impacts of cost cuts, and hopes to reach a 15% prices fall quite quickly. A new meeting will be held in 2009 to discuss these issues, the progress made and the problems encountered.

Reforming rail tolls rates

In 2006, the French Government accepted RFF offer to reform its infrastructure fare policies. Associated to RFF, the General Directorate for Public Works (Department of Transportation advisors council) and the General Inspection for Finance (Department of Treasury advisors council) analyzed the situation and provided the Government with a report durgin summer 2007.

Based on the report’s proposals, the newly formed Ministry for Ecology, Sustainable Development, and Special Planning and the Ministry for Economy, Finance, and Employment started a consultation with all actors involved in rail operation: transport authorities, private operators, etc. Before June 2008, RFF is expected to prepare a new fares grid that will be used starting December 2009, right before the international passenger rail operation market is opened to competition.

These are three of the next challenges for the rail infrastructure managing company, in the next few years. The face of the rail operating market will considerably change in the next couple years, and infrastructure needs to adapt to its customers: rail operators, that will be numerous in the years coming.