"The new group has a shared vision: to make SNCF a resolutely multi-modal rail company with international ambitions," Pepy says. "To grow in the rail industry today you need to be global."
As a result, Pepy says SNCF is rapidly exporting its expertise and growing its international business to the extent that it doubled between 2007 and 2015, from 15% to 30% of total revenue. "Today, Keolis and SNCF Logistics derive half of their revenue from international markets," Pepy says. "Our aim is to keep expanding by building on strong demand for mass transit and logistics outside France. We are now present in Britain, Sweden, Australia, the USA, the Middle East, India and China."
One of SNCF's key objectives is to overcome one of the deficiencies of public transport compared with car travel by making door-to-door travel a realistic possibility for rail travellers. For the past couple of years, SNCF has been working on solutions to give passengers travel options with us both before and after their train journey.
"Through acquisitions and partnerships, we've invested in options ranging from local ride-pooling to car-sharing, car rentals between individuals, car rentals with drivers, and even bicycle rentals," Pepy says. "Our aim is to lead the way in shared mobility by offering door-to-door solutions around rail travel and to increase shared mobility's percentage of total travel in France from 15% as it is now to 30% by 2030." This strategy similarly applies to freight where Pepy says SNCF Logistics offers tailor-made services at every stage of the logistics chain.
It also reflects Pepy's desire for SNCF to focus more on digital technology with it currently investing €450m over three years in digitalisation to provide customers with better information, offer new services and where possible create personal links. "Our SNCF app brings all our transport services together and allows users to get the information they need, plan their journey and make changes in real time," Pepy says. "It's been downloaded over 2 million times to date.
"Our IDpass, which puts new ways of travelling at passengers' fingertips, was launched in July, and gives users access to a choice of transport options before or after their rail journey such as car-sharing, IDCab taxi service, and car rental with driver in major French and European cities. To take things to the next level, to enable passengers to buy a ticket or reserve a ride-share by smart phone anywhere, or to validate a ticket even if their phone battery is down, we're working on near field communication (NFC) mobile technology. The very first applications should appear by the end of 2016, for implementation in 2017."
France is a world leader in high-speed rail. The first TGV services began 35 years ago and the network has carried 3 billion passengers so far. SNCF's fleet of 440 high-speed trains, which Pepy says is the largest in Europe, operates 700 services a day.
France is building four high-speed lines simultaneously which will open during the next 18 months, significantly increasing the length of the French high-speed network. However, Pepy says the future of high-speed rail in France hinges on SNCF's ability to adapt to its customers' new expectations and to their overall mobility trends. "We've adopted a dual approach: on the one hand we offer full-service TGV high-speed trains serving city-centres with a frequent service between 230 destinations," Pepy says. "But we also have Ouigo, a low-cost, no-frills service which we plan to grow further in 2016."
Progress
Pepy is encouraged by the apparent recent progress with the Technical Pillar of the Fourth Railway Package. He says it represents a real step forward as it will generate a change in the competitiveness of European rail and he is looking forward to a prompt roll-out. "Once it's been finalised, rail stakeholders will be able to emerge from the legal limbo they've been in for the past few years," Pepy says.
He adds that the recognition within the Fourth Railway Package of the right for national railways, such as SNCF, Austrial Federal Railways (ÖBB), German Rail (DB), and Italian State Railways (FS), to retain an integrated structure provided there are Chinese walls between the operating and infrastructure sides, is an endorsement of SNCF's reintegration. "For SNCF, but also for some of our European counterparts, recognition of our rail model is a major achievement that will allow us to focus on the longer term and take advantage of all related benefits," Pepy says.
Nevertheless, there are still considerable differences between the way public-service-obligation rail services are procured in Europe. While Germany has embraced competitive tendering for regional and local passenger rail concessions, SNCF continues to operate all such services in France while it retains control of rolling stock purchases, much to the frustration of some regional authorities which provide the funding.
"At this stage in negotiations, Europe has set 2026 as the deadline for introducing competition in regional markets," Pepy says. "In France, it will be the state's responsibility to define a legislative framework for awarding regional rail service contracts, including terms and conditions, timeline and organisation. Experimenting with different options might be a good way to tackle a complex subject like this.
"We need clarification on the transition period running up to 2026, since it's difficult to manage a business without knowing exactly when our monopoly will end. In addition, once open competition becomes the rule we don't think it's a good idea to make wide use of derogations for direct awarding of contracts.
"Last but not least, if an existing supplier loses an operating contract, it will be important to adopt measures to preserve the rights of employees assigned to regional services. This issue for employees with SNCF status must be addressed clearly so as not to penalise state-owned companies that are required by law to guarantee jobs to existing staff, or reassign them elsewhere."
The November terrorist attacks in Paris and the incident in August on a Thalys high-speed train where passengers overpowered an armed terrorist, have inevitably led to calls for increased security beyond those measures introduced following the Charlie Hebdo attack in Paris a year ago.
Security
Pepy reiterates that security is an absolute priority and says that in mid-November, SNCF handed the government a report outlining its proposals for improving security. "SNCF operates 15,000 trains a day, carrying an average of 5 million passengers transiting through 3000 stations and our security systems draw on both human and technical expertise," Pepy says.
"Nearly 3200 SNCF rail police patrol our stations and trains. We've added a rapid-response team that can be deployed very quickly. Since January 2015, there has also been an expanded police and military presence at our stations and onboard trains.
"In addition, SNCF publicises toll-free numbers which can be called or texted in emergencies and we are working on new technologies, testing them with the security forces," Pepy says.
Indeed 2016 may prove a benchmark year for SNCF's security policy with work already underway to implement new measures. At the government's request, SNCF is installing new security gates for Thalys passengers embarking in Paris and Lille, and Pepy says security gates may also be trialled at another station in Paris.
It is clear that SNCF is doing its utmost to keep up with government requests and allay public concerns. "We currently invest €400 million a year in security," Pepy says. "SNCF views security not as a cost but as an investment to ensure that our customers can travel safely."
