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Hauts-de-France contract won by SNCF voyageurs

Snow1964

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Just announced, contract over €3bn, covers lines Paris - Amiens, Lille, Beauvais, Calais, Lyon, Maubeuge etc

The Hauts-de-France region has finalized one of the largest regional rail contracts in Europe, marking a new milestone in the liberalization of passenger rail transport in France. The operator SNCF Voyageurs was awarded the concession to operate the main rail links between the north of the country and the capital, Paris, in a contract valued at over EUR 3 billion.

The contract covers a 9-year period of actual operation, following an 18-month operational preparation phase. Services will be fully operational by early 2028.

“Outside the Île-de-France region, we have finalized the most significant and ambitious rail contract in France. It is a true operational test for over 1,500 trains per week, representing approximately 35% of TER traffic in Hauts-de-France,” said Christophe Coulon, Vice President of the Hauts-de-France Regional Council, responsible for mobility, transportation infrastructure, and ports.

The contract covers the main regional routes to Paris, including Paris–Amiens, Paris–Lille, Paris–Beauvais, Paris–Laon, Paris–Calais, Paris–Maubeuge, and other connections in the northern region.

The new agreement will lead to a significant increase in service, with 1,558 weekly trains starting in 2028, representing a major increase from current levels. Approximately 103 new trains will be introduced on these routes to improve capacity and passenger comfort.

At the same time, the operator will be subject to much stricter performance standards, including a 98.5% on-time rate and harsher financial penalties for cancellations, especially during peak hours. Enhanced safety and anti-fraud measures will also be introduced, including the installation of access gates at the main stations in Paris-Nord and Creil.

 
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dmncf

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How do these French regional rail concessions work? Does the successful bidder gain control of the existing rolling stock and depots? i.e. if a different bidder had been success, I assume they don't have to build they own depots and acquire their own rolling stock?
 

Snow1964

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How do these French regional rail concessions work? Does the successful bidder gain control of the existing rolling stock and depots? i.e. if a different bidder had been success, I assume they don't have to build they own depots and acquire their own rolling stock?
Not totally sure on rolling stock, but it does mention 103 new trains. But I think in France (as in number of other countries) you drawdown options from a central framework contract with train builder, not do UK style and order some unique non-standard train.
 

U-Bahnfreund

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In many (all?) regions of France, the more modern existing rolling stock (AGC, Régiolis, Regio2N) already belongs to the regions, so they can transfer it to new operators. This is what's happening for example when RATP takes over the Caen network in Normandy, they will get the existing AGC fleet that SNCF operates (renovated).

Regarding workshops, the Norman example has SNCF and RATP share existing ones, whereas in Sud-Paca the region paid Transdev to build a new workshop for their new trains. For the international tender by Grand Est the region intends to build two new workshops and let the new operator use it, not sure how similar or dissimilar this is to Sud-Paca.
 

Fragezeichnen

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The benefits of an open competition for service provision include:
  • A service definition based on needs rather than what the monopoly incumbent operator is prepared to agree to
  • Transparency regarding service subsidy levels
  • Defined penalties for failing to deliver on the contract
  • Market pressure should costs be unreasonably high
Of course, I do realise that all of this is seen with extreme scepticism by most Brits, who would prefer a permanent stated owned monopoly.
 

Stossgebet

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The benefits of an open competition for service provision include:
  • A service definition based on needs rather than what the monopoly incumbent operator is prepared to agree to
  • Transparency regarding service subsidy levels
  • Defined penalties for failing to deliver on the contract
  • Market pressure should costs be unreasonably high
Of course, I do realise that all of this is seen with extreme scepticism by most Brits, who would prefer a permanent stated owned monopoly.
Well, be fair. What are the costs and problems associated with breaking up a vertically integrated structure, and permantently running it on contracts?
What is the long term outcome of breaking up a single entity, and turning it into many entities that suddenly all need to make a profit to survive?
 

The exile

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Of course, I do realise that all of this is seen with extreme scepticism by most Brits, who would prefer a permanent stated owned monopoly.
Having sampled the alternative for the last 32 years. Personally I think we’re throwing the baby out with the bath water, but minor adjustments to the status quo are never going to satisfy the politicians as the promise of radical action that will solve every problem in the known universe within 6 months of them coming into office.
 

NCT

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The benefits of an open competition for service provision include:
  • A service definition based on needs rather than what the monopoly incumbent operator is prepared to agree to
  • Transparency regarding service subsidy levels
  • Defined penalties for failing to deliver on the contract
  • Market pressure should costs be unreasonably high

I agree completely.

Having sampled the alternative for the last 32 years. Personally I think we’re throwing the baby out with the bath water, but minor adjustments to the status quo are never going to satisfy the politicians as the promise of radical action that will solve every problem in the known universe within 6 months of them coming into office.

Are you saying the Brits or the EU are throwing the baby out with the bath water?
 

signed

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Isn't this just giving the service to the existing operator?
No, a new subsidiary is created to run a given contract

The issue is that those subsidiaries hire staff (there is a, what the UK calls a TUPE, transfer mechanism involved for existing staff) on much worse t&c and lower wages compared to the main ship of SNCF Voyageurs or RATP for example.
Even if SNCF/RATP t&c have been well lowered with the loss of the special pension status for new hires nearly 10 years ago now

There are a lot of bus drivers that are leaving from the Ile de France region to non-tendered operators elsewhere in the country due to that

Now to know what's going to happen with the TER GV service. It's a very well used service that employs PSO TGVs running as TGV Inoui while allowing the use of some TER tickets. Will it remain legally possible, I don't think we know yet
 

Fragezeichnen

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Well, be fair. What are the costs and problems associated with breaking up a vertically integrated structure, and permantently running it on contracts?
What is the long term outcome of breaking up a single entity, and turning it into many entities that suddenly all need to make a profit to survive?
Well, be fair :p That's based on assumptions you've made from a British perspective. SNCF hasn't been broken up.

If you want my opinion:

1. There's no reason why an integrated monopoly can't do a fantastic job, better than via contracting, the problem is that if it doesn't, and settle into "this is our railway, we'll serve the people we've want to serve in the way we want to serve them, and you'll give us as much money as we ask for" mode it's very difficult to do anything about it. Any suggestions on change can be parried with "we say this is impossible, and no one except us knows how to run our railway network", or "it costs that much because we say so". It's not an uncommon perception that SNCF is resistant to change except under extreme pressure. Take for example the sudden innovation of Ouigo Classique around the time there were plans for open access long distance services(which subsequently all failed), and the tales SNCF Fret unilaterally cancelling service contracts, only to change it's mind when a competitor tried to step in as a replacement.

2. It doesn't actually matter that much either way - not nearly as much as sufficient infrastructure investment and competent political oversight. Thousands of individual workers deliver the service every day with the resource available to them, not a few bosses who might have slightly different financial incentives.
 

Stossgebet

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Well, be fair :p That's based on assumptions you've made from a British perspective. SNCF hasn't been broken up.

If you want my opinion:

1. There's no reason why an integrated monopoly can't do a fantastic job, better than via contracting, the problem is that if it doesn't, and settle into "this is our railway, we'll serve the people we've want to serve in the way we want to serve them, and you'll give us as much money as we ask for" mode it's very difficult to do anything about it. Any suggestions on change can be parried with "we say this is impossible, and no one except us knows how to run our railway network", or "it costs that much because we say so". It's not an uncommon perception that SNCF is resistant to change except under extreme pressure. Take for example the sudden innovation of Ouigo Classique around the time there were plans for open access long distance services(which subsequently all failed), and the tales SNCF Fret unilaterally cancelling service contracts, only to change it's mind when a competitor tried to step in as a replacement.

2. It doesn't actually matter that much either way - not nearly as much as sufficient infrastructure investment and competent political oversight. Thousands of individual workers deliver the service every day with the resource available to them, not a few bosses who might have slightly different financial incentives.
About those thousands of individual you mention. Those employed since 2020 no longer have their 'cheminot' protected employment status. Why? Profit. All about breaking up the structure of the industry to enable profits to be made, and if that comes from harming workers rights, then so be it.
Again, why? Do you think the French have chosen this path, this structure themselves? No. They are subservient to eu law. The eu law means they have no choice but to break up sncf, and tender it in pieces to the private sector. Yes, sncf will win some of those pieces. You think this may be good. Evidence from many eu states shows this structure is not good.

Personally, when a nation loses its democratic and legal ability to choose how it operates it own public services, i think it creates the situation where people will eventually realise their democracy and self determination has been taken away, which may be quietly acceptable when things are going well, but when things aren't going well, you have created an ignition point. Taking away peoples democracy is playing with fire. And when politicians are accountable for public services, there is democratic accountability. But when politicians can only be seen to be pleading with private companies, you have further distanced people from the public services their ever increasing taxes are being spent on (for private entities to profit from). And to my knowledge, no one ever been able to create a breakdown of just how much money is being lost and wasted to manage, run and maintain this vertically separated, private profit motivated structure. Probably because no one ever wants to ask a question that will have an unpleasant answer. Much like how for years and years people denied this structure was eu law. Because they couldn't handle their beloved eu being seen to do something unpopular, and without consent.
 

U-Bahnfreund

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Again, why? Do you think the French have chosen this path, this structure themselves? No. They are subservient to eu law. The eu law means they have no choice but to break up sncf, and tender it in pieces to the private sector. Yes, sncf will win some of those pieces. You think this may be good. Evidence from many eu states shows this structure is not good.
Any French region has - at least according to EU law, not sure about French regulations - the freedom to run their region's train services in-house or through an arms-length region-owned train company. That company wouldn't have to compete for contracts and could offer similar or same conditions for its staff like at old SNCF and so on if they chose to do so. It's either the French government's or the region's decision not to go down that path, not the EU's.
 
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Stossgebet

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Any French region has - at least according to EU law, not sure about French regulations - the freedom to run their region's train services in-house or through an arms-length region-owned train company. That company wouldn't have to compete for contracts and could offer similar or same conditions for its staff like at old SNCF and so on if they chose to do so. It's either the French government's or the region's decision not to go down that path, not the EU's.
No. The eu law mandates that they must be competitively tendered to the private sector.
Yes, a publically owned entity (state or regional) can bid, and can win.
But to get to the point, you have to break it into pieces for the bidding process. Then the contracts can run for a period up to 20 years, and the process begins again.

In short. Eu law demands that all PSO public train operations are tendered to the private sector. Sorry if this doesn't suit anyones predetermind narrative. The law is the law. And eu law is supreme. If stating eu law is classed as 'eu bashing', maybe those eu fanatics can understand and take ownership of those laws, rather than deny them.
 

rvdborgt

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In short. Eu law demands that all PSO public train operations are tendered to the private sector.
Please check this page:

You will find that there are a few possible exceptions, one of which is "where a local authority provides public transport services itself or assigns them to an internal transport operator (a separate body, which the local authority controls in a similar way to one of its own departments)".

For rail specifically, direct award of contracts remains possible in exceptional and well-defined circumstances, notably where:
  • it is justified by structural and geographical characteristics of the market and network (size, demand characteristics, network complexity, technical and geographical isolation, type of services); and
  • it would result in an improvement in quality of services or cost-efficiency, or both, compared to the previous contract;
  • the volume of the contract is modest
    • estimated average annual value less than € 7.5 million per year or
    • fewer than 500,000 kilometres.
 

U-Bahnfreund

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You will find that there are a few possible exceptions, one of which is "where a local authority provides public transport services itself or assigns them to an internal transport operator (a separate body, which the local authority controls in a similar way to one of its own departments)"
To add to rvdborgt's comment, this can be found in the amended EU regulation 1370/2007, article 5, subsection 2
: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02007R1370-20171224

Part of my local train service here in Germany (which has its fair share of ups and downs in competitive tendering, to say the least) is operated under such a subsection 2 contract, where no competitive tendering took place and the operating company is publicly owned. It had a special political argument why it was done this way, but legally it's that "in-house" type contract and there's nothing stopping the regional train authority to do this to their other services as well.
 

Stossgebet

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Please check this page:

You will find that there are a few possible exceptions, one of which is "where a local authority provides public transport services itself or assigns them to an internal transport operator (a separate body, which the local authority controls in a similar way to one of its own departments)".

For rail specifically, direct award of contracts remains possible in exceptional and well-defined circumstances, notably where:
  • it is justified by structural and geographical characteristics of the market and network (size, demand characteristics, network complexity, technical and geographical isolation, type of services); and
  • it would result in an improvement in quality of services or cost-efficiency, or both, compared to the previous contract;
  • the volume of the contract is modest
    • estimated average annual value less than € 7.5 million per year or
    • fewer than 500,000 kilometres.
Yes. Northern Ireland i think, was used as an example where this criteria applied.
However, the tiny exceptions that exist, do nothing at all, to take away the fact that the eu has mandated the break up and tendering of public train operations across the overwhelming majority of the eu. There's always exemptions. They are exemptions precisiely because they do not disprove the law, but are accomodated within it.
 

U-Bahnfreund

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Well, the exception "a local train authority can decide to operate its train operations itself", which applies everywhere and for a large part of the train services that exist in the EU (such as the ones we are discussing here, TER in Hauts-de-France), doesn't seem tiny to me.
 

Stossgebet

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Well, the exception "a local train authority can decide to operate its train operations itself", which applies everywhere and for a large part of the train services that exist in the EU (such as the ones we are discussing here, TER in Hauts-de-France), doesn't seem tiny to me.
It is tiny in the sense that the exemption, is only an exemption 'after' all the other structural elements of the eu laws have been enacted. The verticle separation, and breaking up of the national railway has been complete.
 

signed

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To the benefit of passengers. Good.
In the case of SNCF, especially for long distance, it has been for the worse

- Fares have risen by a wide margin and SNCF had to run an ad campaign to say this was due to no subsidies
- Discounts have been silently nerfed
- Trains are fuller than ever, but they won't put more trains because they don't want to, and have barely ordered enough new to cover the existing retirement plans, in a stock shortage with 30+ year old stock still running.
- Plans to put as many services as possible under ouigo, with no refund and absurd fares at most times (target is 30% of services to be Ouigo)
- More effort is made to expand into Spain and Italy than in the national network

Now, most of those things would have happened anyways under monolithic as the trend continues, but the situation is absolutely crazy and a ripoff

And everything is done at the gov to dissuade low-cost airlines from operating, which are the only real competition, and I really wish they realize that they have a huge chance to provide the service people can't afford now

I do understand that Réseau would rather have more trains to pay for the network, but I don't buy that there is any independence between Réseau, Gares and all the subsidiairies and SNCF itself
 

NCT

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In the case of SNCF, especially for long distance, it has been for the worse

- Fares have risen by a wide margin and SNCF had to run an ad campaign to say this was due to no subsidies
- Discounts have been silently nerfed
- Trains are fuller than ever, but they won't put more trains because they don't want to, and have barely ordered enough new to cover the existing retirement plans, in a stock shortage with 30+ year old stock still running.
- Plans to put as many services as possible under ouigo, with no refund and absurd fares at most times (target is 30% of services to be Ouigo)
- More effort is made to expand into Spain and Italy than in the national network

Now, most of those things would have happened anyways under monolithic as the trend continues, but the situation is absolutely crazy and a ripoff

And everything is done at the gov to dissuade low-cost airlines from operating, which are the only real competition, and I really wish they realize that they have a huge chance to provide the service people can't afford now

I do understand that Réseau would rather have more trains to pay for the network, but I don't buy that there is any independence between Réseau, Gares and all the subsidiairies and SNCF itself

Fares adjusting to the market's willing to pay is no bad thing. It sends an undistorted market signal to other players there are viable business opportunities. I fully expect the likes of Velvet and Ilisto to be successful, and the competition will bring fares down from SNCF's current monopolistic rent seeking level.

You have a 10tph railway market supported by a viable level of willingness to pay. Do you

A) run a 5tph subsidised railway with the state having no resource to subsidise the other 5tph, or
B) run a 10tph commercialised railway?
 

signed

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You have a 10tph railway market supported by a viable level of willingness to pay. Do you

A) run a 5tph subsidised railway with the state having no resource to subsidise the other 5tph, or
B) run a 10tph commercialised railway?
But that's not how SNCF works nor how it has worked in the last few decades, and it shows regardless of whether it's still gov owned or it's own, you're going to end in the a situation. SNCF do not want to run more trains of their own. I am doubtful anything will change on that front, Trenitalia did cause fares to drop, but didn't cause an increase of trains by SNCF.

Velvet will work, but I am utterly skeptical of ilisto, with their concept of no reservation, pay as you go on the busiest lines, it will be overcrowded in no time.
 

SHD

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Well, the exception "a local train authority can decide to operate its train operations itself", which applies everywhere and for a large part of the train services that exist in the EU (such as the ones we are discussing here, TER in Hauts-de-France), doesn't seem tiny to me.

This exception applies to local authorities who set up and run their own operating companies. It does not apply at all to the case being discussed here (local rail services in Hauts-de-France being tendered by the local authorities).


A company operating under this exception would be SWEG in Germany, for instance.
 

NCT

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But that's not how SNCF works nor how it has worked in the last few decades, and it shows regardless of whether it's still gov owned or it's own, you're going to end in the a situation. SNCF do not want to run more trains of their own. I am doubtful anything will change on that front, Trenitalia did cause fares to drop, but didn't cause an increase of trains by SNCF.

Velvet will work, but I am utterly skeptical of ilisto, with their concept of no reservation, pay as you go on the busiest lines, it will be overcrowded in no time.

10 overcrowded trains is better than 5 capacity capped trains.
 

43096

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Fares adjusting to the market's willing to pay is no bad thing. It sends an undistorted market signal to other players there are viable business opportunities. I fully expect the likes of Velvet and Ilisto to be successful, and the competition will bring fares down from SNCF's current monopolistic rent seeking level.

You have a 10tph railway market supported by a viable level of willingness to pay. Do you

A) run a 5tph subsidised railway with the state having no resource to subsidise the other 5tph, or
B) run a 10tph commercialised railway?
Why would the 5tph need to be subsidised if commercial operators think they can make money on 10tph?
 

U-Bahnfreund

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This exception applies to local authorities who set up and run their own operating companies. It does not apply at all to the case being discussed here (local rail services in Hauts-de-France being tendered by the local authorities).


A company operating under this exception would be SWEG in Germany, for instance.
What I'm trying to say is this: Hauts-de-France could have, if it wanted to, set up its own train company to run their TER services instead of tendering out (but they didn't), and that would have been fine under EU law. That's in response to the claim that the EU forced them to tender the services out.
 

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