The SNCF bill for the taxpayer continues to rise

Is this confirmation that the public authorities are determined to provide new resources for rail transport, or is this a sign that the SNCF’s finances are still not sufficiently maintained? In 2022, the bill left by the railway company in the public accounts represented 20 billion euros, a significant increase over the last six years.

This is what emerges from a study published this Thursday by the Fipeco site, specializing in public finances. This sought to trace all the contributions paid by the State or local authorities, both subsidies for operations and investments as well as aid to the special social security scheme for railway workers.

The addition therefore results in a cost of 20 billion, and which compares to the 13.7 billion calculated by the Spinetta report in 2016 (+45% in six years), or to the 17 billion in 2020 (+17.6% in two years) calculated both by a previous Fipeco study and by a Senate report.

Weight on public finances

“This amount of 20 billion euros is significant for public finances. Certainly all public spending has been driven upwards in recent years by inflation, but the increase observed is greater,” underlines François Ecalle, former magistrate of the Court of Auditors and creator of Fipeco.

A dive into the maquis of subsidies and purchases of services passed by the State and the regions allows us to better understand what is financed by the public authorities, and therefore ultimately the taxpayer. Firstly, there is everything relating to the operating costs of the SNCF.

We find in particular the 6.8 billion paid in 2022 by the regions to the SNCF to operate the TER and Transilien trains in Ile-de-France. In fact, the railway company still remains in a monopoly situation, with competition not expected before 2025. The State also finances the Intercités to the tune of 400 million. These different amounts provided by the taxpayer come in addition to what is paid by the traveler when purchasing their train ticket.

The cost of railway workers’ pensions

Last item in this category, TER and Transilien access fees (2.9 billion) paid by the State to SNCF Réseau, the infrastructure manager. This gives a total of 10.1 billion euros for all operating costs. “Payments from public administrations represent approximately half” of the railway turnover achieved in France by SNCF, estimates Fipeco.

Beyond operations, the study also lists the investment subsidies from the State and regions received by the SNCF, both for the purchase of trains and for the network. That is 6.2 billion in public spending for all investments, which still benefit almost exclusively the railway company pending the arrival of competition.

Finally, the Fipeco note recalls that the social protection of railway workers continues to weigh on public accounts, even if the status has disappeared for new agents hired since 2020. The State thus pays 3.2 billion in balancing subsidies to the special regime pensions.

” Alarm signal “

If we add up the sums devoted to operations, investment and social protection (without forgetting the 800 million in interest charges on the debt taken over by the State), we therefore arrive at this bill of 20 billion. For François Ecalle, this figure represents “an alarm signal”: “Certainly rail is necessary for the ecological transition, but that is not a reason to do anything regarding costs. The question of efficiency must be asked,” he believes.

The latter assures that various studies show that “when we compare the subsidies paid by States for rail (using a train-kilometer criterion), it is higher in France”. The SNCF had however promised major productivity efforts in 2018 in return for the assumption of 35 billion euros of debt by the State, but the former magistrate of the Court of Auditors judges that “this remains barely visible in the figures “.

This vision of things is strongly contested by the SNCF. For the railway company, by bringing together the costs financed by the public authorities for operation, investments and the social protection system, Fipeco is “only adding cabbages and carrots”, according to the group’s management.

Railway development

Basically, the latter recalls that costs have been driven up by the surge in energy prices. “Above all, there are significant amounts for investments, which reflect the desire to develop rail to serve the French,” argues the management of the SNCF. In fact, investment subsidies – which have doubled in six years – represent the cost item which has seen the greatest increase over the period.

The railway company also denies not having made the claimed savings. “The 2018 reform required that we generate positive free cash flow from 2022, and this is what we achieved last year and in the first half of 2023,” recalls the group’s management.