Paris (AFP)

Cost of strikes, rescue of small lines, end of glyphosate ... SNCF will have a hard time making ends meet. It will have to tighten the bolts and sell assets to meet the imperatives imposed on it by the State.

The metamorphosis of the SNCF, transformed into a public limited company on January 1, was accompanied by a rigid financial component. In return for the recovery of 35 billion euros in SNCF Réseau debt by the State (out of almost 52 billion in mid-2019), the public group is committed to achieving "economic equilibrium" in 2022 .

Clearly, the revenues must be able to cover the maintenance of the network, without additional debt. In 2018 - last known figure - 2.4 billion was missing.

In the context of opening up the railways to competition, the government demanded that the SNCF make serious savings to reduce a good part of the competitiveness gap compared to other companies.

While a senior group official was already planning "an austerity plan like the box has never known", the strike against the pension reform seriously complicates the situation, the shortfall approaching a billion d euros.

For the 2019 financial year, CEO Jean-Pierre Farandou estimated the loss at 600 million euros on Thursday. Which are likely to plunge the SNCF in the red, when it left for "a very good year".

On the other hand, "we will try to make up for" part of the 300 to 350 million losses that the continuation of the social movement should cause in January, said the leader. To save fiscal year 2020.

"There will be a savings plan (...) which will try to redress what can be," he warned. Giving an appointment "at the end of February" to his board of directors for more details, he contented himself with saying that he "would not (touch) employment on the ground".

Summoned to no longer go into debt, the CEO of SNCF is also considering asset sales. Especially since there is no question of "calling into question investment programs", according to the Minister for Ecological Transition Elisabeth Borne.

- Performance contract -

In this context, could the government soften the financial framework it has imposed on SNCF, after the strike against its pension reform?

The answer is no. For the Minister of Economy Bruno Le Maire, "the State has done the maximum of what it could do".

"We cannot always ask more from the French. Because I remind you that all these billions (...) is the money of the French," he insisted on LCI on Monday.

To complicate everything, the SNCF will have to "get out of glyphosate" of which it is a heavy user, perhaps this summer, six months earlier than planned.

In the absence of a convincing alternative solution, the bill for weeding the tracks could soar up to 500 million euros per year, against 30 million currently.

In addition, the government intends to reintegrate into the "structuring network" funded 100% by SNCF Réseau, part of the small train lines currently supported by the regions and the State. Nantes-Bordeaux, for example.

The additional note would reach 1.4 billion euros over 10 years.

Even if the Ministry of Transport considers the figures mentioned "very approximate, and by definition not stabilized since the discussions continue", this measure is not trivial in the midst of negotiations for the new "performance contract" which must link SNCF Réseau to 'State for 10 years.

However, these rather tense discussions engage the entire SNCF group.

"We are going to make the + business plan + of Network (...). And since the transport activities (of the SNCF) partially fuel the activities of Network, it's a whole," explained Mr. Farandou on Thursday.

He has a few weeks ahead of him to rethink the strategy and adjust the group's scope. This redefinition of the "big business model of French railways" and the performance contract could be completed by April, according to Mr. Farandou, for whom "we are not a month away".

Among the avenues mentioned in the profession, the SNCF could sell all or part of Geodis, a logistics group which generates more than 8 billion in turnover, the car rental company Ermewa or real estate assets.

© 2020 AFP