Trade unions and rail and freight workers in France have intensified their campaign to save freight operator Fret SNCF, a subsidiary of the state-owned National Society of French Railway (SNCF). On Tuesday, May 16, the workers, responding to the call of unions including CGT des Cheminots which is affiliated to the General Confederation of Labor (CGT), marched to the Ministry of Transport in Paris, demanding that the freight company being saved from liquidation. Union representatives also held talks with the SNCF management and other transport authorities on the same day. Earlier this year, on January 18, the European Commission opened an investigation into support measures taken up by the SNFC to help Fret SNCF, such as capital injection and debt cancellation, during the 2007-2019 period, which allegedly do not comply with European state aid rules.
According to reports, between 2007 and 2019, the SNCF provided advances worth €4-4.3 billion (US$ 4.33-4.65 billion) to Fret SNCF, and assisted in canceling the company’s €5.3 billion (US$ 5.73 billion) debt in 2019. Fret SNCF was converted into an independent public limited company in January 2020. As per the European state aid rules, any aid granted by member states that “distorts or threatens to distort competition” by favoring certain undertakings is incompatible with the EU Common Market.
The aid from the state-owned SNCF to its subsidiary Fret SNCF was meant to strengthen rail freight services in the country. Without the aid, the services of the Fret SNCF would have declined, benefiting its private competitors. If the investigation finds non-compliance with the state aid rule, Fret SNFC may be sanctioned and ordered to return a large sum of money to its parent company. This will not only hamper Fret SNFC’s operations, but could lead to around 5,000 job cuts.
In their petition, the trade unionists have stated that “the opening up of the freight transport sector to competition (privatization) in 2007 did not allow the development of rail freight, worse it weakened the public company and all logistics players. This investigation would result in the liquidation of the Fret SNCF and a destabilization of the sector, the main result of which will be the return to the roads of thousands of trucks.”
Leila Chaibi, Member of the European Parliament from La France Insoumise (LFI), in her question to the Parliament on March 30, had stated that the “European Commission’s investigation is likely to further compromise the rail freight sector, at a time when it is already facing fierce competition from road freight, which is far less environmentally friendly.”