10.1.19

SPEAKING OF DEMSETZ AUCTIONS.

They're coming to regional rail in France.
Issued by the Ministry of Environmental Transformation & Sustainability and to be published this week in the Official Journal of the European Union, the [solicitiation] covers the Nantes – Bordeaux and Nantes – Lyon services currently operated by SNCF Mobilités as part of the Trains d’Equilibre du Térritoire network of conventional inter-city trains. These two routes are among eight TET services still specified by central government rather than regional authorities, and SNCF’s operating agreement with the state runs until 2020.

The ministry says that the [solicitation] marks the start of the first competitive tendering process under the national railway reform programme which was passed into law in June 2018. This is intended to ensure that France complies with the provisions of the EU’s Fourth Railway Package.
It appears that the tenders will accompany the purchases of new rolling stock on different lines.
The ministry is clear that for now the tendering process applies only to the two TET routes specified. This is because the rolling stock on both routes has recently been renewed, and this will be made available for use by the winning bidder. Future tendering of other state-managed TET services would only take place once fleet and infrastructure enhancements have been completed ‘over the coming years’. The government plans to select a single operator to run both services under a public service contract, insisting that there will be no on-rail competition.

The government says that ‘it has complete confidence in the quality of the bids that will be presented’. The operating contract is expected to come into effect from 2022.

‘We are not trying to get rid of SNCF’, a spokesman for the ministry told local media on January 9. ‘All the bidders have an equal chance of winning. We want to see the tendering process lead to more quality for passengers, more trains being run and more innovation, but also a reduction in costs — why not? But the latter is not the dominant criterion. There is no logic in “social dumping”.’
"No on-rail competition" means we won't have situations like those on British metals, where the passenger bound up from Newcastle might have the choice of a Virgin Group or Central Trains or whoever the operator is.  What intrigues there is that carrier-issued tickets are good only on that carrier's trains, but a rail pass or multiple-city ticket is valid on any train.

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