SNCF to acquire 20 pc of the Italian railroad NTV

Posted on October 14, 2008 by Matthieu Desiderio

SNCF, the good partner for NTV

According to latest updates, Nuovo Trasporto Viaggiatori (NTV), first Italian private company in high speed rail passenger transport, has chosen SNCF as a reference industrial partner. SNCF will invest as much as 20% capital into NTV’s. Through this partnership, NTV expects in the short-term to benefit from the SNCF expertise in high-speed rail and more specifically on marketing aspects (Luca di Montezemolo, head of NTV).

In the longer term, NTV even considers that this partnership is a scope for a strong development of its network outside Italy; with the liberalisation of the rail passenger market in 2010 January, 1. On SNCF’s side, G. Pépy also said that such a partnership must be seen as very innovative at the dawn of the 2010 market opening.

By 2015, NTV aims at ensuring 54 trains per day (being 13.5 million kilometers per annum) with 16 trains per day transiting both in Rome and Naples. By that time, NTV intends to reach a 20% market share with attracting 10 million passengers per year (roughly 30,000 passenger per day). In total, NTV workforce will be 2,000 with half of it outsourced. The total amount of investments generated by NTV should reach €900 million.

NTV, on track in 2011

First NTV trains will be launched in 2011. These high speed trains will link major Italian cities: Turin-Milan-Rome-Naples, Rome-Naples-Bari and Rome-Bologne-Venise. In order to challenge Trenitalia, NTV mostly targets the market segment of middle-aged working people. NTV will operate a fleet of 25 AGV train sets from the French constructor, Alstom. Each of them will be composed by 11 wagons which eventually represent 460 seats. The contract with Alstom comes to €650 millions.

Via this partnership NTV may take advantage of the SNCF know-how in terms of trip quality standard and customer satisfaction . As a reminder, since the first TGV was launched in 1981, more than 1.5 billion passengers have used SNCF high speed trains, with a more than 75% load factor. Also, SNCF recent surveys display high degree of satisfaction. Moreover, in addition to prospects of a development of a pan-european high speed rail network, this partnership would potentially lead to further collaborations in ticketing, booking and price management.

German railways Deutsche Bahn is interested in the Italian market

The Deutsche Bahn which seems to be very interested in the Italian market has initially said in September they would be keen to put into NTV’s capital, which appeared as the forthcoming private challenger of the Ferrovie dello Stato company. After having recently moved on the rail freight sector, the DB is presumably after establishing more European synergies on the rail passenger sector.
In September 2008, , the DB had just bought over 49% of Nordcargo, a company owned by Ferrovie Nord Milan, with investing €3 million (this share would be likely to rise up to 60% in 2 to 3 years of time). Nordcargo (€34 million turnover and 182 employees in 2007) operates freight trains in the North-West of Italy and North-South cross-border traffics (Germany-Switzerland-Italy). It is to note that, as soon as 2004, the DB had bought over 95% of Strade Ferrate del Mediterraneao, which became in 2005 Railion Italia S.r.I.

When SNCF will put capital into NTV’s, shareholder’s equity of NTV – €263.6 million in total – will be structured as follows (Sources: SNCF):

NTV partners	Shares	Shareholders
MDP Holding	38.4%	Della Valle, Montezemolo, Punzo
IMI Investmenti Spa	20.0%	IntesaSan paolo
VFE-P SA	20.0%	SNCF
Generali Financial Holdings	15.0%
Nuova Fourb	5.0%	Bombassei
RESET 2000	1.6%	Sciarrone

References

Article: Nuovo Transporto Viaggiatori (NTV) choisit la SNCF comme partenaire industriel de référence, SNCF Participations, Oct. 13, 2008: here
Article: NTV : le concurrent des Ferrovie dello Stato souhaite, en partant de l’Italie, conquérir par la suite 20% du marché européen, La Repubblica, Affari e Finanza, Sep. 29, 2008
Article: Deutsche Bahn acquiert 49% du capital de Nordcargo, Il Sole 24 Ore, Sep. 18, 2008
Article: La DB renforce sa position sur le marché italien du fret grâce à une coopération entre Nord Cargo et Railion Italia, Verkerhsrundschau, 17 Septembre 2008