Réseau Ferré de France

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Réseau Ferré de France

92 Ave. de France
Paris F-75648 Cedex 13
France
Telephone: +33 1 53 94 30 00
Fax: 33 1 53 94 38 00
Web site: http://www.rff.fr

Government-Owned Company
Incorporated: 1997
Employees: 521
Sales: $2.69 billion (2002)
NAIC: 482111 Line-Haul Railroads; 561110 Office Administrative Services

Réseau Ferré de France (RFF) owns France's railroad infrastructure. The government-owned company is responsible for building, upgrading, and maintaining the company's rail lines and related infrastructure, including stations, bridges, and viaducts, as well as planning and engineering new rail extensions. RFF is also responsible for managing the traffic on the country's rail system—charging fees to historic operator Société Nationale des Chemins de Fer Français (SNCF) for its use of the network. Since March 2004, the country's rail network has been opened to use by third-party and foreign rail freight operators, and RFF has become responsible for coordinating that traffic as well. RFF was formed in 1997 when the French government split the SNCF into its train operations and infrastructure management segments—then transferred most of SNCF's huge debt to RFF. As such, RFF is also responsible for paying down the massive debt accrued in constructing France's world-leading high-speed train system. At the end of 2004, that debt was expected to near EUR 27 billion. The SNCF remains RFF's main customer, contributing nearly all of the company's EUR 2.6 billion in annual revenues. Because the RFF contracts with the SNCF for its railroad building and maintenance operations, most of the company's revenues are ultimately returned to the SNCF. Altogether, RFF oversees more than 29,000 kilometers of railroad, including more than 14,000 kilometers of electrified rail, and more than 1,500 high-speed train lines. The company also oversees more than 1,300 tunnels, nearly 30,000 rail bridges, more than 7,000 kilometers of fiber-optic cable, and nearly 31,000 kilometers of subterranean cable. RFF continues an active program for developing the country's rail system. In 2001, the company completed the highly touted high-speed line, directly connecting Paris and Marseilles for the first time. In summer 2007, the company expects to have completed the new Paris-Strasbourg line; development also has begun on high-speed lines serving the southern Atlantic coast and connecting the Brittany and Loire regions.

Laying the Foundations of France's Rail System in the 1800s

Railway development in France was marked from the start by a high degree of government involvement. The country's relatively low level of industrialization in the early 19th century, in comparison with England, the United States, or Germany, left little possibility of private investment in the construction of railroads. At the same time, the country's economy remained highly focused on Paris, a factor that further discouraged the construction of provincial rail lines. Meanwhile, the country's powerful shipping interests, both along its coasts as well as along an intricate inland canal and waterway network, helped stall railroad construction in order to head off competition from the younger form of transportation. Popular sentiment, particularly in the rural provinces, also viewed the arrival of railroads with suspicion.

The first French railroad was constructed in order to transport coal between Saint Etienne and Andrézieux in 1827. That railroad still required the use of animals to pull its wagons. The country's first steam locomotives began operating on the Saint Etienne-Lyons line, for which construction was completed in 1830. Yet, a lack of consensus among the French parliament led to the government refusing permission to allow construction of any major railroads into the 1840s.

The passage of legislation in 1842 gave new hope to France's railroad system. Under that legislation, the government became responsible for awarding concessions to the private sector for building and operating the country's railroad system. Planning for the system was placed under the guidance of the department of Ponts et Chaussés, which had overseen the development of the country's highly regarded road, bridge, and canal network. An important feature of the new railroad concessions was that the government essentially leased the operation of the lines, rather than allow outright private ownership of the rail system. In exchange, the French government took responsibility for funding most of the rail system's infrastructure requirements, building the bridges, tunnels, track beds, and embankments.

The relative political stability under Napoleon III paved the way for the first major extension of France's railroad system. By 1870, the country had completed more than 17,000 kilometers of rail lines, connecting most of the country's larger cities to Paris. The railroad sector also had consolidated. If originally the country's railroads were built and operated by a large number of small companies, by the 1870s these had become grouped into six large regional companies—Chemin de Fer de l'Est; Chemin de Fer du Nord; Chemin de Fer Paris-Lyons-Mediteranée; Chemin de Fer Paris-Orleans; Chemin de Fer Ouest; and Chemin de Fer du Midi.

These companies, however, jealously guarded their territory, leading to a somewhat absurd situation: if all of the country's major cities were connected to Paris, none were connected to each other. The six regional operators refused to allow their railroad networks to be connected to the others. The situation had a number of side effects, such as reinforcing Paris's position as the country's single political and economic focal point. The lack of coordination of its rail system also became a major military problem during the Franco-Prussian War in 1870.

Nationalized Rail System in the 1930s

The passage of the Plan Freycinet, developed by then minister of public works Charles Freycinet in 1879, sparked the next development phase in the country's national railway system. The Freycinet plan called for the construction of some 9,000 kilometers of new railroad, in part in order to connect and coordinate the country's grid.

The effort met with success. By the outbreak of World War I, France had one of the world's densest railroad grids, with more than 60,000 kilometers of line in operation. The cost of building the railroad, coupled with periods of economic hardship, had caused a number of railroads to begin operating at a loss during this period. The French government bailed out the failed lines, taking over their operation, and became more and more responsible for managing the coordination of the railroad sector.

World War I came as a new blow to the country's private railroad sector, especially in those regions torn by battle during the war. Rebuilding the infrastructure and otherwise recovering from the loss of business during the war became too much for the private sector to bear, and by 1920, all of the country's railroad companies were operating at a loss.

The rise of automobile traffic during this period and the growing popularity of delivering freight by truck added to the sector's troubles. Approximately one-third of the country's railroads were narrow-gauge lines, which proved unable to compete with the more flexible and less expensive automobiles. The economic collapse in the Depression Era coupled with the rising competition from automotive track forced the closure of most of the narrow-gauge lines during the 1930s.

At the same time, the sector's difficulties led to the decision to nationalize the railroad system during the 1930s—a process made easier by the earlier policy of granting lease-based concessions, rather than outright ownership of the railroad system. In 1937, the government established the legislation for the creation of a new government-owned railroad body. The new organization, Société Nationale des Chemins de Fer Français (SNCF), came into being at the beginning of 1938.

Under the SNCF, the country's railroad network was brought together into a single system. Yet soon after its creation, the SNCF found itself under control of the collaborationist French government and placed into service supporting the Nazi and German occupational policies.

Following the war, the SNCF became responsible for rebuilding the country's railroad network, which had experienced heavy damage during Allied bombing raids. In the 1950s, the SNCF began redeveloping its network, eliminating nearly all of the remaining narrow-gauge lines as well as a number of minor lines. By the end of that decade the country's system had been reduced to just 40,000 kilometers. Yet at the same time the SNCF had implemented a program of technical upgrades, such as the introduction of electricity-driven locomotives, enabling its trains to roll faster than ever before.

By 1955, the SNCF had succeeded in establishing a world railroad speed record at 331 kilometers per hour. This victory, and the resulting prestige, encouraged the SNCF to begin developing a true high-speed train network. Another factor in this development was the conversion of the SNCF's status in 1971, in legislation that required the group to become responsible for generating the funds for its own budget needs. With the freight market all but taken over by the trucking industry, SNCF turned its attention toward developing its passenger business.

Work on the high-speed train—called the TGV, for "train de grand vitesse"—began in earnest in the early 1970s. The high cost of fuel brought on by the Arab Oil Embargo led to the adoption of electricity—backed by the country's nuclear energy program—as the power source for the new locomotives. The SNCF began construction of the Paris-Lyons line in 1974, adapting the exiting rail to the new TGV standards. That line was inaugurated in 1981 and enabled the SNCF to set a new world train speed record, at 380 kilometers per hour.

Company Perspectives:

As manager, project leader and owner of the national rail network, RFF has been given five main missions: Manage and maintain the network; Dispatch the capacities; Upgrade and develop the network; Managing railway property; Managing the debt.

Dedicated Infrastructure Company for the 2000s

The SNCF extended the TGV network during the 1980s and into the 1990s. The next phase, the TGV Atlantique, began operations in 1989, with full completion in 1990. In 1993, the SNCF completed the TGV Nord-Europe, then joined in its extension to complete the Eurostar line, connecting France to England beneath the English Channel, in 1994. Another brand of the TGV network was added in 1996, when the Thalys line connected Paris and Brussels.

By then, however, the SNCF had come under pressure from the European Parliament, which had passed a ruling in 1991 stating that, in order to stimulate competition among the Union's railroad systems and operators, countries were required to separate ownership of their railroad networks from their operation. The French government had dragged its heels on implementing the directive into the mid-1990s.

Yet the SNCF also had racked up a huge debt, as ridership levels were nowhere near enough to compensate for the some EUR 45 billion (US $50 billion) spent on developing the country's TGV network. By the middle of the 1990s, with just half of the proposed network completed, the SNCF faced long-term debt levels of nearly EUR 21 billion and total debt of nearly EUR 29 billion.

In order to improve the SNCF's books, therefore, in 1997 the French government decided to split the organization in two, creating a new government-controlled company, Réseau Ferré de France, or RFF. That company took over ownership of the country's railroad network, as well as most of the SNCF's debt. As owner of the rail network, the RFF was responsible for managing its traffic—receiving toll payments from the SNCF, which retained for the time being its monopoly of the network. RFF was also responsible for developing, upgrading, and maintaining the network, work that was subcontracted to the SNCF.

Another of RFF's responsibilities was to pay down its huge debt, while continuing to finance the construction of the high-speed network. If the latter progressed smoothly—culminating in 2001 with the opening of the highly anticipated Paris-Marseilles line and the setting of new speed records—the former proved far more difficult. By 2001, RFF's long-term debt levels had actually increased, to nearly EUR 23 billion. By 2003, the company still faced down close to EUR 27 billion in debt.

The improbability of ever seeing RFF balance its books led to calls for the French government to forgive the company's debt—which could be considered as the cost of constructing one of the world's most respected high-speed train networks. In the meantime, RFF continued pursuing the network's extension, with the next phase, the TGV Est, already under construction—the company expected to have completed the new Paris-Strasbourg line by 2007. RFF also entered the planning and development phases for the high-speed lines serving the southern Atlantic coast and connecting the Brittany and Loire regions.

RFF meanwhile added a new facet to its range of operations in March 2004, when the French rail system was officially opened for competition. RFF now became responsible for coordinating the entry of foreign and private rail operators onto the French network. RFF promised to continued France's history as a technological leader in the world's railroad industry.

Key Dates:

1842:: Legislation codifying construction of the French national rail system by the private sector is passed.
1938:: The French railroad system is nationalized under the newly created SNCF.
1955:: SNCF sets a train speed record, encouraging the development of a high-speed train line.
1974:: Construction begins on the first leg of a high-speed train (TGV) line between Paris and Lyons.
1981:: The first TGV line is inaugurated.
1991:: The European parliament drafts a directive for the separation of the railroad infrastructure from railroad operation in Europe.
1997:: Réseau Ferré de France, which takes over ownership of France's railroad network, as well as most of the SNCF's debt, is created.
2001:: The new TGV line linking Paris and Marseilles is opened.
2004:: RFF opens the French rail network to competition.