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'Referendum' result due on France's big railway shake-up

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'Referendum' result due on France's big railway shake-up
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PARIS (Reuters) – France’s rail unions will announce on Wednesday the results of a staff ballot on government plans to create a leaner, more efficient public railway company before the monopoly is opened to competition in line with European Union rules.

The unions, which called the vote days after Air France <AIRF.PA> employees forced the resignation of Air France-KLM’s chief executive, will be hoping to inject fresh energy into rolling strikes and to weaken the government’s negotiating hand.

The strikes have brought disruption but not paralysed the transport network. So far, there has been no sign from President Emmanuel Macron that he will back down on the biggest and most disputed reform proposed.

The unions have called it a “referendum”. The state-appointed boss of the SNCF <SNCF.UL> railways, Guillaume Pepy, says it is nothing more than a “petition” bereft of any legal value.

Pepy told CNews on Tuesday that the railworkers’ strike could cost the SNCF 350-400 million euros (£307 million – £350.8 million).

The result of the vote marks the beginning of a critical period in the rail reform process. On Friday, Prime Minister Edouard Philippe will meet with the unions and respond to proposed amendments to the draft bill that is with the Senate.

Macron has already stared down the unions over labour law reforms. Backing down over the SNCF would raise questions over his ability to deliver a raft of other social and economic reforms that he argues are vital to modernise France.


The proposed legislation will gradually end the SNCF’s monopoly of passenger train services in France, and with it the more protective job-for-life contracts that were customary for most of the 150,000 people who work at the railways.

The lower house of parliament, where Macron’s party dominates, has already adopted that legislation and the upper chamber Senate is due to vote on it in the first week of June.

The reform has been opposed by hardline unions including the Communist-linked CGT, but also by the large, reform-minded CFDT union, which is more interested in securing massive debt relief for the railways and guarantees on basic job conditions when the rail market opens up to foreign firms in years ahead.

Polls show that two thirds of voters back an overhaul of the railways, which many users say have suffered from debt-funded investment in the much-admired high-speed TGV network at the expense of a far bigger secondary rail network.

The government plans to absorb about 35 billion euros ($41.20 billion) out of the SNCF’s total 47 billion euro debt burden, French business daily Les Echos reported on Monday. A government spokesman declined to comment.

(Reporting By Brian Love; Editing by Richard Lough and Gareth Jones)

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