News / Fret SNCF restructure: blow to jobs and green agenda?

© christophe tausch |

News that France’s rail freight operator Fret SNCF is to be restructured has been met with mixed emotions amid concerns of job losses and threats to Europe’s green agenda.

Reports began circulating yesterday that a decision had been taken by state-owned parent SNCF to restructure its freight operations to avoid sanctions from the European Commission linked to an apparent improper use of state aid.

A letter from French MEP Karima Delli to the Commission and made available on Twitter said the issues were tied to Fret SNCF’s transformation to a commercial operation in 2020.

Chair of the European Parliament’s commission for transport and tourism, Ms Delli said she was dismayed by the decision, calling it “an extremely negative, damaging signal for climate and social objectives, with rail freight one of the solutions to deal with the climate crisis”.

She added the preference was made to “sacrifice the company rather than negotiate financial conditions” for returning state aid to the Commission.

The Loadstar understands that between 2007 and 2019, SNCF provided cash advances in the region of €4.3bn to Fret SNCF, then cancelled its €5.3bn-worth of debt in 2019 shortly before the freight division was converted into a private operator in 2020.

If true, the provision of state aid would have directly breached EU rules prohibiting state aid that “distorts or threatens to distort competition” by favouring certain operations.

According to reports, the restructure will see Fret SNCF give up 20% of its contracts and 30% of its traffic, making this available for alternative providers. Ms Delli’s letter said it would also see part of the operation spun off into a separate entity.

This entity, she added, would be prohibited from certain routes for a “period of 10 years” and would also result in the loss of 500 jobs at Fret SNCF.

“But the implications do not stop there as it is not certain Fret SNCF’s competitors can ensure operations provided by the company, which could indirectly result in a modal shift towards road transport, which would mean fewer trains, more trucks,” she continued.

“On the other hand, not being able to position themselves on certain segments for 10 years, could produce difficulties [impeding this new entity from operating].”

Ms Delli said abandonment of the company “opened the way to an unknown that could have a strong effect on the much-needed process of decarbonisation”; but others were more optimistic, with one source active in rail telling The Loadstar it was the end of a stagnant monopoly.

“When the planet needs to take some trucks off roads, rail is part of the solution but with the semi-monopolistic SNCF all you had was … a financial hole,” said the source.

“Let it crash down so one can rebuild. And this crash offers French politics the solution of the European Commission, the Commission can be the thing they pin the blame on, leaving no head to shoot.”