PRESIDENT’S COLUMN

President’s column RMT helpline 0800 376 3706 :: april 2011 :: RMTnews 22 France’s state-owned rail company SNCF and its subsidiary Keolis were shortlisted last month to run West Coast Main Line train services from 2012 to 2026. Keolis owns 35 per cent of Govia and operates rail franchises at Southern, Southeastern and London Midland. Since 1997 SNCF has expanded, buying rail franchises in Denmark, Sweden, and Germany. In March 2010 SNCF narrowly lost out to German railways Deutsche Bahn in the race to take over Arriva plc. France combines a strong public service ethos with private companies that compete aggressively worldwide: socialism at home - privatisation abroad. SNCF highlights this hypocrisy. Unlike in Britain where private speculators led the 19th century ‘railway mania’, in France the state built the railway system. From 1842 France chose a compromise between Britain’s free-market chaos and Belgium’s state-run railways. The state built all France’s rail lines while private companies operated them on 99- year leases, with the state guaranteeing rail operators’ dividends and taking two-thirds of excess profits in exchange. This may sound familiar to RMT members. State-funded rail infrastructure and privately operated train companies in Britain are the outcome of two decades of EU rail liberalisation. This model failed in 19th century France where just as in Britain today, private railways regularly went bankrupt and had to be rescued by the state. French railways were finally nationalised in 1938 to form SNCF. Since the 1950s SNCF has undertaken massive modernisation, in 1981 opening the new ‘LGV’ high-speed rail system and in 1994 the Channel Tunnel link to Britain. The European Commission attacked France’s high level of rail investment following the 1992 Maastricht Treaty, which limited state debt and borrowing. Moves to sell off parts of SNCF followed in 1997 along with implementation of EU rail directive 91/440 to set up a French Network Rail, RFF. In February 1997, French Communist Party transport spokesman Jean-Claude Gayssot warned: “RFF won’t solve any of SNCF’s problems including debt, but it’s dangerous because it opens up the prospect of dismantling, fragmentation and privatisation of parts of SNCF". Prophetic words. In June 1997 Gayssot became Transport Minister in a Socialist-led government promising to reform RFF. Instead, French governments have followed EU directives by privatising parts of SNCF and opening others to competition. When the French National Assembly transferred SNCF’s historic debt to RFF in 1997 it totaled £16 billion, climbing to £26 billion by 2001). RFF serviced this debt by pushing up track access charges, cutting back track maintenance and embarking on a program of privatisation. In February 1998 Frantour (travel agencies and hotels) and France Rail (advertising) were sold. SNCF also created commercial subsidiaries such as Telecom Development (TD) and several ‘European Economic Interest Groupings’ to take part in foreign privatisation ventures. In February 2000 SNCF sold 60 per cent of its parcel service SERNAM to private road freight company, Geodis with a dowry of £150 million. Geodis immediately sacked nearly half the 5,200 workforce. In May 2003 SNCF sold 49 hydroelectric power stations, which provide 20 per cent of SNCF’s electricity. Eurostar meanwhile was transformed into a limited company in which SNCF remained majority shareholder. RESISTING EU RAIL LIBERALISATION IN FRANCE RMT president Alex Gordon looks at how French railways are being slowly privatised under EU directives PROTEST: RMT members in Paris in 2008 on a ETF demonstration against EU rail directives