Madeleine Wahlberg writes about the Court of Auditors report released in France last week:
There has been a flurry of ‘mea culpa’ stories about the crisis in French High Speed Rail (TGV). As we reported a few years back1, the Head of the French Rail company (Mr Pepy SNCF) said ‘we got it wrong’ by investing so much into TGV. This week that self-criticism is taken further by both the SNCF and by the French equivalent to the Audit Commission.
Fist let’s look at some news about TGV ‘profitability’. Does the TGV get anywhere near paying for itself after all these years? Is it economically viable? It’s not good news. An article in Le Figaro2 indicates that the TGV operational surplus has declined from a ‘high’ in 2008 (€2886m) to a low in 2013 (€2624m); and this is further squeezed by a steady increase in the amount paid to RFF (the state organisation that owns the tracks) from 48% to over 70%, over the same period. TGV is leaking a lot of money, and not just because of the current economic downturn. So does that feel like a confirmation to those who shout from the parapets that ‘HS2, like HS1, will soon turn a profit’? The long-term evidence in France suggests something very different. In the words of the business daily Les Echos, TGV profit is “crumbling to a trickle”3.
Next let’s look at how the SNCF is trying to face up to this crisis in TGV4. Can the crisis in French HSR be turned around? SNCF proposes 3 options to do this over the next 10 years:
a) reduce HSR activity to just the 40 most profitable main stations – a 50% cut (and as regional services have already been cut to make way for the TGV, this means a big reduction in all rail services.)
b) Massively increase the timetable and decrease the prices of TGV so that it can effectively squeeze out cars and planes.
c) Shift to a ‘low-cost’ TGV, also called ‘Third class TGV’ eg with no luggage racks, no food, using suburban stations not expensive inner city ones, no station or train staff, pay for a second suitcase, be there 30 mins before etc.5
And all of this ‘beating of the breast’ on the downfall of the TGV system came to a head last week with the publication of a highly critical report on the French TGVs by the Court of Auditors (roughly our Audit Commission)6. They use headlines like ‘TGV – a worn out model’; ‘irrelevant’; ‘at the end of its life’; ‘an incoherent system’; ‘over-optimistic assumptions of passenger numbers’; ‘incoherent assessments of socio-economic impact’; ‘unsustainable costs’; a project that is ‘taking its last breath’ (à bout de soufflé for Goddard film fans!). They make 8 recommendations which include greater transparency, and not proceeding with a project before it has been properly evaluated in terms of a range of impacts. Fundamentally they say France should not proceed with any more TGV projects that are likely to be unprofitable.
Now don’t you think that if we had anything like a sensible Government – or indeed an Opposition – they might say ‘Hey guys – France has been doing this high speed thingy for some time. And they don’t seem ever so happy with it. P’raps we should learn from their mistakes and pull out of this ghastly mess? Cos those French, they know what they are talking about when they say HSR is a model ‘at the end of its life’.
‘PS – just noticed (page 31 of the report) cites our National Audit Office report on HS2. The French Court of Auditors report clearly outlines the main criticisms that the NAO had of HS2. If you would like to help in reading a section of the report, please leave a message in the comments below. There is a good deal that supports our case, and deep criticism of TGV.’