A requirement of the national railway reforms, which came into force in January 2015, the contract has been submitted to France’s Rail and Road Regulatory Authority (Arafer) to gauge their opinion before it is signed off by the state and SNCF Network.
Described by the infrastructure manager as elevating its modernisation and investment budget “to a level never seen before,” the draft proposal envisages spending €46bn on modernising the network over the next 10 years, including €27.9bn for renewal of the main line network. Nearly €2.6bn will be spent in 2017, with a target to provide €3bn per year set to be reached by 2020.
€1.8bn will also be spent over 10 years on industrial and technological investments to modernise and improve network management, with €300m set to be spent annually between 2017 and 2019. €4.5bn is also set to be allocated by the state, regions and SNCF Network to improve accessibility at stations and enhance security, including removing level crossings.
In addition, the plan envisages spending of €12bn over the course of the contract on improvements to regional lines. The French regions and SNCF Network expect to spend €900m on renovation in 2017, rising to over €1bn in 2018, which compares with €600m at present.
SNCF Network says the spending included in the plan is designed to help it overcome its two major challenges: guaranteeing a high-level of network security and improving the quality of service offered to transport operators, and has identified six major objectives to achieve this:
• place security and safety at the centre of concerns using the financial support of the state and local authorities
• define priorities for renewal and improvements to the network, with an emphasis on the core network and busiest lines
• deliver a programme of regional line renewal as outlined in the contract plan between the government and regional authorities
• transform network management by encouraging a policy of innovation across all areas of the company
• enhance the commercial offer, particularly for rail freight, by improving the network’s quality of service by modernising path allocation and traffic management, and
• establish a “financial trajectory” for SNCF Network.
It is hoped that the investments, particularly in new technologies and an improved relationship with suppliers, will translate into €1.2bn of savings by 2026. In addition, increases in commercial revenues relating to the improvements in quality of service should see some of SNCF Mobility’s future profits transfer to SNCF Network.
However, while it will also benefit from revenues generated by real estate, the infrastructure manager’s debt is expected to grow from €44bn to €60bn in the next 10 years.
