APPENDIX C
State Ownership of Passenger Rail Services in France

Following a serious financial crisis at la Société nationale des chemins de fer français (SNCF) and an industrial action taken by the railway unions at the end of 1995, a national debate on the future of rail transport in France was initiated. This culminated in the Pons-Idrac reform plan (named after the Minister and the State Secretary of Transport) voted into law on February 13, 1993. The new law reformed France's railway system in the following principal ways:

• established the Réseau ferré de France (RFF) to take charge of the rail infrastructure while assuming substantial SNCF debt;
• gave regions full responsibility for the organization of regional rail services; and
• implemented an industrial plan to win back its defecting customers by focusing on its core activity: transportation.

This railway reform adopted a less traditional institutional separation of infrastructure and transportation services given that the two government entities, SNCF and RFF, are not Crown corporations per se. RFF, the infrastructure manager, and SNCF, the railway undertaking, are "établissements publics à caractère industriel et commercial" (EPIC), which are specific to French law. An EPIC is a public organization that mixes its administrative character with that of its industrial and commercial character. It is not a corporation and has no equity per se, and its accounting and management practices are more similar to corporations than to government administrations. The RFF is administered by a Board of Directors composed of seven representatives of various state agencies and two representatives of employees. The RFF is supervised by the Government Commissioner and the Director of Land Transport at the Ministry of Transport. These supervisors oversee the administrative and technical perspectives of the RFF. Economic and financial supervision is exercised by a dedicated team of comptrollers ("mission de contrôle").

The value of RFF's property assets has been estimated at FFr148 billion, including 80,000 hectares of land, 32,000 kilometres of track, 38,663 structures and 18,663 level crossings. The debt level transferred from SNCF is FFr134.2 billion, which required servicing of FFr9 billion in 1997. Figure 1 displays the funding and the level of state subsidies of RFF for fiscal 1998.

FIGURE 1

While the emphasis in France has centered on the high-speed train (TGV), the Committee would also like to note that France is also experimenting with an intermediate high-speed rail system to operate on its regional services (TER) using conventional track. Such a system might find application in the Canadian context.