» France’s high-speed rail network is more extensive than ever and attracts huge ridership — but the financial viability of new lines raises concerns.

Thursday, France celebrated the 30th anniversary of the opening of the high-speed link between Paris and Lyon by then-President François Mitterand, an occasion that redefined travel in Europe and encouraged countries around the world in invest in faster train service by offering train service at speeds above 150 mph for the first time. SNCF, the public national rail company, celebrated this evening at Paris’ Gare de Lyon, where services first originated.

The distinct orange and blue TGV trains that have rocketed through the French countryside at speeds of up to 320 km/h (200 mph) since 1981 have been extraordinarily successful in attracting travelers away from airlines and even the highways because of the quick journey times they offer between center-cities. And they’re supremely safe: More than 1.7 billion rides have been taken on TGVs, fatality-free. Because of France’s reliance on nuclear plants, the electric-powered service has provided the country a low-carbon travel alternative; when considering alternative routes people would have taken without high-speed service, new routes — including construction and operations — are carbon positive* in the long-term.

Because of a series of investments in new dedicated passenger lines, Paris is now three hours from the Mediterranean, two hours and twenty minutes from London and the German border, and one hour and twenty minutes from Brussels. 2,300 km of new lines already under construction or planned for opening within the next decade (see map at the end of the article) promise significant improvements that will bring Toulouse and the Spanish border within three hours of Paris.

The high cost of new rail lines, however, puts in question how much further expansion the French can afford.

Combined with relatively affordable fares, lower travel times have increased ridership on TGV trains in France to about 100 million passengers a year (141,000 a day), more than one and a half times the population of the country as a whole. Though SNCF’s one billion total annual riders is dwarfed by ridership on DB German rail (1.9 billion), France’s encouragement of the construction of new high-speed lines and SNCF policies that push all riders to fast trains, rather than segregating train speeds by the means of individual travelers, have allowed the company to control 50% of the European high-speed market, compared to 22% for DB, 11% for Spain’s Renfe (which has a longer high-speed rail network), and 10% for Italy’s FS.

83% of French people have ridden TGV trains, similar to the percentage of Americans who have flown and far higher than the percentage of Americans who have ridden Amtrak, high-speed or not (less than a third of them).

From its TGV services, SNCF has made significant profits, which have reached €900 million annually in recent years, much of which has been used to cross-subsidize losses on slower Intercités trains serving smaller cities and TER operations offering regional rail.

But the demands by President Nicolas Sarkozy — who recently said “The TGV, it’s France” — on the national public rail infrastructure owner RFF to build more high-speed lines has changed the equation. Though new routes are usually partially funded by local, regional, and national governments, TGV offerings have been expected to pay back a portion of construction costs (and the much smaller cost of line maintenance) through fees on track usage. RFF covered 28% of the construction costs of the LGV Rhin-Rhône Branche Est, which will open for service later this year, for instance; those costs will be paid back through track fees eventually passed down to passengers on TGVs.

But debt accumulated to build the lines has reached €29 billion for RFF and €9 billion for SNCF; new lines, at a cost of €16-27 million per kilometer, will increase those sums substantially.

RFF has responded to this increase in debt by significantly increasing track fees, and it plans to do so by 40% between 2008 and 2012 — enough to wipe out SNCF’s margin of profitability on the TGV entirely (though the French government has said it would work to stabilize those charges after 2013). RFF will increase fees on the most popular TGV routes the most.

SNCF has responded by threatening to cancel routes with lower ridership (even though they are profitable if excluding the track fees devoted to construction) and it has said the loss of profitability will make it impossible for it to replace the original 1981 fleet of TGVs before 2020. Fares are increasing at 3.4% annually, twice the rate of inflation, and SNCF plans to charge users more on select routes even as it reduces customer service for others to a low-cost model over the next few years. Competition on international routes running through France, expected to begin later this year, will put another cog in the TGV’s future.

Other solutions, such as public-private partnerships for new routes, may reduce the burden on RFF, but they won’t help much for SNCF or riders because someone will have to pay for construction costs at some point. The new LGV Sud Europe Atlantique, to run from Tours to Bordeaux, will cover 55% of its construction costs through track fees, but the project’s PPP partner’s investment in the project will have to be paid back through higher track fees on trains through the corridor (the private investor will also get to keep all profits from the line). RFF’s 14% share of the costs of this project will have to be covered by riders on other lines paying track fees, since all track fees from this route will go to the investor, not RFF.

The irony of charging more track fees to pay for the construction of new lines is a lower degree of service on existing lines and less train travel, since SNCF must cover capital costs with operations profits and higher fares reduce demand.

Standing in the way is the inherent conflict between SNCF’s interests, which revolve around maximizing passenger revenue, and those of RFF, which are about minimizing debt from infrastructure construction and maintenance. These must be harmonized. SNCF’s President Guillaume Pépy has suggested that the current separation of operations from track ownership is a clunky, inefficient model that does not respond adequately to the needs of the railway. Other solutions, such as Germany’s or Spain’s, in which infrastructure is owned by a division of the national rail company, may be less amenable to future competition in services but may make for a less administratively complex system.

The fundamental question is whether France should continue to build new lines (and increase the debt of agencies like RFF), even if that means putting existing services out of the price range of some riders. The government has chosen to pursue that path, but it may not be a solution that is viable in the long term.

Nonetheless, the TGV remains a model for the rest of the world. SNCF has successfully demonstrated how to extend fast, safe, and environmentally friendly rail services to most of the country at prices that most of the population can afford.

Note: In the map above, which is just of high-speed lines, not all French rail lines, LGV refers to “ligne à grande vitesse,” or high-speed rail line.

* Carbon positive in this case means that the line will produce less carbon than would have status quo alternatives.

Image at top: Two TGV Duplex units linked at Marseille-St. Charles, from Flickr user Dmitri Sumin (cc)

California Governor Jerry Brown, a longtime supporter of the development of high-speed rail, has not given up on his state’s plans for an extensive network stretching initially from San Francisco to Los Angeles, and then on to Sacramento and San Diego. Despite cost estimate increases, opposition to the line among residents of some affected areas, and a total loss of new federal funding thanks to anti-investment Congressional Republicans, Mr. Brown has made evident in recent weeks his support for the line.

Construction on a segment in the Central Valley between Merced, Fresno, and Bakersfield is still planned to get under way next year. Funding for that initial link is mostly lined up, thanks to state commitments and federal grants resulting from the stimulus of early 2009.

But because of more detailed projections, the 178-mile first phase of the project is now expected to cost far more than initially envisioned — $10 to $13.9 billion instead of $7.1 billion — and it will need an injection of funds from another source to be constructed. With a promise to the state’s citizens that another demand for California-wide funds will be avoided, few local dollars to contribute, and an utter inability to rely on Washington for practically anything, that means the system will have to find private investors to join in. Whatever the relative merits of allowing private companies to invest in what is fundamentally public infrastructure, California has no other place to turn for the successful completion of its system.

California is not alone; with a depressed economy and few public sector funds available, there is increasing recognition of the importance of engaging private-sector funds in the creation of infrastructure. Illinois Governor Pat Quinn signed a bill this week authorizing public-private partnerships (PPPs) to be used for the creation of infrastructure in his state.

Critics of the California High-Speed Rail Authority have repeatedly argued that the agency would be unable to locate businesses that might be willing to contribute to the system, but international examples suggest that there is significant private sector interest in infrastructure construction. The Authority will release a request for qualifications soon and select a winning bidder in early 2012. But it has yet to clarify the manner in which it would structure its relationship with private companies in terms of financing, construction, and operations.

For precedents, the state should to look at France, which has recently signed two very large deals with private financing and construction conglomerates for the completion of two new extensions of its already large high-speed rail network. They provide two different models for engaging PPPs.

The first is the Bretagne-Pays de la Loire (BPL) high-speed link, which will connect Western France to the existing northern branch of the Atlantique line with 182 km of new tracks between Le Mans and Rennes for a cost of €3.4 billion. The connection will reduce running times from Rennes to Paris by 37 min, making it possible to travel on 320 km/h TGV trains between the cities in less than 1h30 by the time construction is complete in 2016.

The PPP contract here is being mostly funded with public sector sources; RFF, the public infrastructure owner, will contribute €1.4 billion, with state and local governments paying about a billion Euros more. 30% of the costs will be financed by the private sector group Eiffage. These loans will be paid back over twenty years with pre-determined fees from RFF and the government.

Like the Rhônexpress project in Lyon that connects the city center to the airport, this PPP arrangement essentially keeps the operations risks in the hands of the public sector; if ridership comes in under estimates, it will have to scrounge up funds from elsewhere to pay Eiffage its standard due. If ridership is higher than estimates, RFF will make a profit on its investment.

The other much larger project soon to begin construction in France is the Sud-Europe Atlantique line, which will extend the southern branch of the existing Atlantique line 302 km from Tours to Bordeaux. This €7.8 billion program will by 2017 bring Bordeaux within 2h05 of Paris, about an hour faster than today. Ridership to and from that city and Toulouse, planned to be about four hours away from Paris, is expected to rise substantially.

Because of the expected profitability of the line, RFF signed a concession contract earlier this year with a private consortium called LISEA made up of Vinci construction company (33.3%), the Caisse des Dépôts (25.4%), SOJAS investment company (22%), and AXA bank (19.2%). The 50-year contract, which includes construction, operations, and maintenance, is the largest-ever PPP for a high-speed rail construction project in Europe.

LISEA will contribute €3.8 billion to the project, with the remainder of costs being financed by the public sector, from local, region, national, and European sources. Much of the private funding will come from low-interest, long-term loans that will be repaid through charges on TGVs and other trains using the line, which will eventually be passed on to the ticket-paying passenger. The public sector funds are grants, so about half the line’s construction cost is expected to be paid back through ridership over the course of fifty years.

Unlike the BPL line, which limited risks of operational profitability and line ridership to the public sector, in this case the private investors will be responsible if initial estimates fall short.

If it wasn’t clear, the business case for Sud-Europe Atlantique line, like that for the California High-Speed Rail Authority, assumes operational profitability. Considering that the international record shows that high-speed rail systems have little difficulty achieving self-support, these are not unsound predictions. In both cases, the advantage of acquiring private-sector support for the project is delaying public investment and using future revenues to pay back construction costs. Each approach has its advantages, especially in terms of where risk is directed.

It would be a mistake to conclude from these examples that private-sector involvement will save any significant money over the long-term. Fundamentally, the creation of PPPs to fund projects such as California High-Speed Rail does not mean that the public at large will end up being responsible for a smaller percentage of overall costs. Indeed, the U.S. Department of Transportation’s Office of Inspector General released an under-recognized report last month that expounded on this fact significantly.

By considering a series of PPP highway projects in the U.S. and abroad, the study noted that they “have a higher cost of capital than traditional public financing… [and] involve equity investors who own stakes in the projects, share in the profits, and expect to earn higher rates of return for the risk they undertake,” in addition to having to pay taxes public projects do not have to pay. Even if PPPs have lower design and construction costs, may be able to more effectively increase tolls, decrease percentage of evading users, and take more advantage of concessions*, they are usually not able to offset the higher costs resulting from the formerly noted issues.

Some states like Illinois and Indiana have “made” billions by leasing off highways to private investors for billions for fifty years or more, but the report argues that “the funds paid upfront to the public sector under a PPP are paid in exchange for future revenues, often in the form of tolls.”

In other words, while the taxpayer may appear to be getting a discount now by having a business group pay for infrastructure, users of that same infrastructure will inevitably have to face the costs of future tolls. In the case of high-speed rail, replacing public sector investment during the construction phase with privately financiers using loans means higher ticket prices in the future to pay back a portion of the costs of construction. There is no free lunch.

The question is whether benefits of a transportation investment advantage the entire public or whether they are reserved to the specific people who take direct use of it. Transportation economists are convinced of the value of user fees, which assume that it is inefficient to carry out redistribution through indirect means, and for them, it makes perfect sense to charge users the full cost of not only the operation but also the construction of the infrastructure they are using. (Many economists would also argue that high-speed rail projects have significant positive externalities like pollution reduction and land use prioritization attached to them that demand direct grants from the government to cover some costs.) This user-fee approach is the method being used in the financing systems of the PPPs discussed here.

Others, however, would argue that the benefits of infrastructure like high-speed rail are economy-wide and that they should be paid for not only by users but by all members of the population through taxes. If we take this side of the argument, it becomes less clear that the best value for the society is to divert most costs to users. A grant-based system assumes that benefits of a transportation investment are felt by people throughout a country (such as through economic growth) and therefore just charging the riders for the costs of capital investments would be inappropriate.

Encouraging private investment in the California high-speed system now may make it more feasible to envision its construction in the short-to-medium-term. Delaying using future public sector revenues to pay for a project today is the basis of much long-term investment, so there is nothing particularly out of the norm about this idea. But the use of such investment will realistically mean a future of higher ticket prices resulting from the need to pay off the bonds taken out for the project’s completion.

Nor is the involvement of private-sector groups in a public-sector project risk-free. In fact, the devastating example of the United Kingdom’s High-Speed 1 line, connecting London to the Channel Tunnel, suggests that any decision to incorporate private investors in public infrastructure should be approached with skepticism — even trepidation.

A report from the Public Interest Research Group, also released this summer**, established a number of valuable principles for PPPs that are useful to consider in evaluating whether or not to include private groups in the funding process for a high-speed rail line. These suggestions include aligning “private sector incentives with public sector goals,” only pursuing PPPs “where ample competition exists,” ensuring “clear public accountability,” retaining public control over system decisions, limiting lengths of contracts, and guaranteeing transparency in the contracting process.

In addition to considering the French examples for PPP contract models, these are helpful suggestions that should be taken to heart by the California High-Speed Rail Authority as it develops its plan to bring fast train service to the state.

* Many of these fiscal advantages may (or may not) stem from the ability of private sector groups to avoid paying workers living wages, comply with minority workforce inclusion programs, fulfill expectations expressed by the public in the democratic system, and so on.

** For the sake of full disclosure, I served as a reviewer for the PIRG report.

» National operator SNCF is considering expanding low-cost options for country’s fast trains in response to increased competition. Increasing premium services also proposed.

Faced with the prospect of direct competition for the first time and settling into a difficult fiscal environment, French national rail operator SNCF is strategizing for a more nimble, efficient future that will include cheaper tickets on some of its most frequented routes. In five years, passengers traveling between big cities like Paris, Lyon, and Marseille can expect to see a variety of companies offering similar services at reduced prices.

SNCF is expected to begin offering an increasing number of low-cost services beginning in 2012.

For train riders on the low end, this could mean a sharp turn towards TGV high-speed rail operations based on those promoted by low-cost airlines — at least for routes that have the demand to handle the crowds that these services require. Business people may be asked to pay more for the products they’re used to receiving for free. On minor routes, customers may see fewer trains — and they may have to be subsidized by the government.

It’s a mixed bag, but one that results from a system that disincentivizes solidarity in provision for transport across the entire nation even as it increases offerings for well-used routes.

SNCF’s future is one that will be marked both by international expansion and domestic competition. The company’s majority-owned offshoot Keolis already operates transit systems in a number of cities worldwide and is now pushing to do the same in high-speed rail, starting with the €10 billion Medina-Mecca link planned for Saudi Arabia. At the same time, foreign competitors are entering the French market — by 2012, Deutsche Bahn will link Paris with Brussels and London and Trenitalia will run trains from Milan and Genova to Paris. This competition will reduce the ability of SNCF to use the TGV as a cash-cow whose profitable operations cross-subsidize its other intercity routes, which explains the company’s new effort to adapt itself to a changing market.

Moreover, the company, faced with extremely high track use fees, is desperate to increase its revenue stream. Despite the fact that both SNCF and the national track owner, Réseau Ferré de France (RFF), are entirely government owned, they have been at odds with each other because of their diverging interests since the latter entity was created in the late 1990s (previously the tracks were owned by SNCF). European Union rules have allowed government monopoly ownership of rights-of-way even as they have promoted competition in operations.

RFF has been increasing its track use fees significantly over the past decade, and plans to continue to do so in order to contribute to the funding of new high-speed lines in France and to pay off the enormous €28 billion debt it has inherited. This situation, however, has put SNCF in a bind; its TGVs aren’t bringing in enough money to pay for the their operations, track maintenance, and the construction of new lines. For now at least, the company’s long-term model isn’t sustainable.

The odd result is that last year, RFF made its first profit since its creation even as SNCF lost €500 million (after a one billion Euro profit the year before). The situation is becoming so bad that almost a third of TGV services, once all operationally profitable, will require subsidies from the government beginning next year, irritating other potential operators. SNCF has a major high-speed train fleet replacement program planned, but that can only be possible if the company finds more funds.

It’s a bizarre state of affairs in which one government entity must hand over its profits to another, with an end result that threatens the integrity of national rail service in France.

Thus the new effort by SNCF to both increase ridership on trains through lower prices and more (packed) seats, along with a parallel effort to introduce business service offerings. Whether this will increase revenues by 28% by 2015 has yet to be demonstrated.

SNCF already arguably has the cheapest high-speed services in Europe, with average trips costing only €42. But the new plan will introduce more low-cost trains similar to the company’s already existing iDTGV fleet, which offers trains with fewer personnel on board, more for-purchase services, off-train ticket-checking, and at-home ticket printing. An example of a particularly cheap iDTGV ticket: €19 between Lille and Marseille, a 1000-kilometer trip. That’s an amazing deal.

Similar offers will be expanded over the coming years to fight off other companies. France, probably the most lucrative rail market in Europe because of its large tourist base and high train-using public, will be the beachhead for the future of high-speed rail in which multiple operators serve the same routes. The German, Spanish, and Italian networks are likely to see similar situations over the next decade. As I’ve discussed before, this situation is likely to result in cheaper tickets and more offerings between the biggest cities but fewer travel opportunities elsewhere unless the government steps in.

The French government’s choice to subsidize TGV routes to less popular destinations rather than having SNCF cancel them because they’re no longer profitable is a political response to a management problem, since SNCF no longer is making enough money on its most-used lines to cross-subsidize within the company. Yet there is no way to assume that this is a permanent solution, since competitors will begin pushing for their own subsidies soon enough. The prioritized association between the goals of the French state and SNCF will slowly dissolve.

Yet that relationship, which ensured good rail service throughout the country, has had its major benefits. While it may theoretically be possible to have cheaper service along major corridors, their profits has meant excellent access by train to just about anywhere. It also also allowed the implementation of major social benefits programs that provide large discounts to the young, seniors, people with large families, and the unemployed. Can a system in which there is competition allow that to happen? Does it make sense to transfer the obligation to fulfill those programs, enshrined in goals of solidarity, from the rail operator to the government?

American planners considering how to implement high-speed rail services have an obligation to look across the Atlantic to judge how they ought to approach similar situations in the future. There are a variety of questions that must be pondered based on the relationships our governments establish between high-speed rail track owners and operators.

Assuming that tracks are publicly owned, should train service providers be required to pay high track use fees, in order to maximize the use of operational profits for the creation of new lines? Or should profits from high-speed lines be redirected towards the operation of less productive corridors in order to encourage geographical equity, with the government stepping in to fully cover the construction costs of new tracks? Should we expect to see a direct fiscal payback for initial capital expenditures, or is it reasonable to simply ask that high-speed rail services cover their operations and maintenance regimes?

For services that are not profitable, should the government use separate funds to ensure their continued running? Wouldn’t that simply result in the all-too-familiar privatization of profits and socialization of losses?

It troubles me that states now funding new intercity corridor development, including California, Florida, Illinois, and Wisconsin, have failed to address these questions straight-on, as complicated as they might be. Considering international experience, the projects in each of these states are likely to produce operational profits, but state governments haven’t established where that additional money would be directed. If we’re serious about improving the U.S. rail system, we have an obligation to do so in a way that establishes our response to these problems before we run full-on into them.

Image above: A TGV in southeastern France, from Flickr user Jean-Louis Zimmermann (cc)

» California seems certain to leverage private funds for its $40 billion-plus high-speed rail project. But just how much can it demand from for-profit sources? And who will benefit?

Too often, the opposition of American conservatives to increased investment in intercity rail appears to based on little more than denial. Today’s op-ed in the San Francisco Chronicle by Liam Julian is a case in point: The research fellow at the Hoover Institution puts in doubt the California High-Speed Rail Authority‘s plan to raise $12 billion from private investors to cover about a quarter of the $43 billion cost of the initial Anaheim-Los Angeles-San Francisco line.

Flip a few pages over, and you’ll find a dueling op-ed from Oliver Hauck, president of Siemens Mobility USA articulating his own company’s interest in accepting “some of the risk inherent in financing this major upgrade to the American transportation system” through a public-private partnership (PPP). Mr. Hauck’s no hack — similar excitement about contributing private sector funds to the project have come from French railroad operator SNCF and JR Central, one of Japan’s preeminent carriers.

The decision this week by the French track owner RFF to award a 50-year concession to contractor VINCI to build, manage, operate, and maintain the planned Sud Europe Atlantique high-speed line provides evidence that the private sector is quite willing to commit significant capital to the construction of new fast train projects. The 300 km French project will reduce travel times between Paris and Bordeaux (about 350 miles) to just over two hours from three hours today and will cost €7.2 billion (about $10 billion) to build. A quarter of costs will be covered by the national government using France’s relance (stimulus) funds and another quarter has been contributed by affected regions and cities.

The other half of construction costs will comes from VINCI, which has made the commitment in return for the right to collect track fees on high-speed TGVs using the line. The company clearly thinks the investment is a profitable proposition on a long-term timetable. The Sud Europe Atlantique project becomes one of the largest PPPs in Europe ever. It will likely attract three million additional annual riders between Paris and Bordeaux (from around 16 million today) once the corridor opens for service in 2016. The existing line will be opened to increased commuter and freight rail services.

RFF plans similar partnerships for the other three high-speed lines it will advance to the construction phase over the next few years: the 2nd phase of the Est-Européene line, completing the Paris-Strasbourg link; a bypass around Nîmes and Montpellier, eventually speeding trains to Barcelona; and the Bretagne-Pays de la Loire corridor, linking Brittany to the national network.

Still think California’s planned $12 billion private-sector contribution is so unreasonable, Mr. Julian?

California and other American states will be able to develop significant private-sector interest in aiding the construction of what have proven to be money-making projects worldwide.

But what’s not being adequately discussed is whether the involvement of the private sector in high-speed rail projects is a safe bet, and whether it will produce beneficial consequences for the population as a whole.

The assumptions made by those advocating private-sector involvement seem relatively solid at face value: the public sector lacks adequate funds because of decreasing tax revenue; businesses are theoretically more creative and will reduce delays; by moving line construction, operations, and maintenance to a third party, you eliminate some of the political aspects of any government-funded project; and risks inherent in any such major program can be transferred away from the taxpayer.

Problematically, however, many of those assumptions have been proven false in the real world.

In both Taiwan and the United Kingdom, private infrastructure firms managing the construction of new high-speed lines have gone broke because of their reliance on loans taken out at high rates, leaving the taxpayer to foot the bill on both line construction and loan back-payments. All the “creativity” in the world bulging from the minds of entrepreneurs didn’t save the people of either of those countries any money compared to what they would have gotten from a fully public operation. In each of those cases, the “risk” supposedly assumed by private corporations was dumped back onto the public sector because you don’t put billions of dollars in a high-speed rail program and then simply throw it away when private funds evaporate.

At least you shouldn’t.

It could be argued that governmental entities can manage infrastructure funding more effectively because they’re able to take out loans at much lower interest rates. This power could be expanded if the U.S. Congress establishes a national infrastructure bank, as has been recently suggested. A fully public operation would allow taxpayers to get some of their investment back through operational revenues; by contracting out a PPP, those profits will all go into the hands of corporations and their shareholders.

Just as important, by moving profit into the private sector, the government entity providing the majority of financing for a line’s construction loses some of its leverage over the project. This makes it difficult to articulate social equity goals in execution. The French example is quite useful from this perspective: by charging low fares from the start made possible because operations were run by a non-profit governmental entity, TGV services were able to build ridership quickly and ensure that high-speed rail is a travel option available to everyone.

Yet if profit is the primary motivator in high-speed operations, the possibility of low fares may thrown out the window. The California Authority has compared ridership and revenues in scenarios with fares set at both 50% and 83% of airline ticket prices; lower train fares would attract almost twenty million more annual passengers than would higher prices — but profit would be slightly lower. Some have suggested thus that the Authority choose bigger profits over higher ridership, with the presumption that private investors would be more attracted to the program if they could gain more from it.

But prioritizing profits has many negative side-effects apart from the loss of generalized mobility made possible with low fares: those twenty million potential riders unwilling to pay big money to ride the system will choose air and road alternatives instead of the train and produce increasing congestion and air pollution. Is that an acceptable trade-off?

Nevertheless, if managed correctly, a public-private partnership on the scale of what California is suggesting could be implemented without many negative consequences, especially if the role of the for-profit side of the equation is limited as much as possible. Facing enormous debt trouble, California has little maneuvering room to increase its bonding capacity beyond the $10 billion already committed to the project; meanwhile, the corridor is competing with projects across the country for very limited federal funds.

Getting the PPP process right, though, is vitally important.

A potential compromise would be to focus private involvement on the real estate side of the equation. The residents of California are wealthy, and the state could make billions by selling off development rights for land surrounding stations. Limited private investment in the line itself could mean a diversion of some, but not all, profit away from the public sector, leaving room to fulfill non-profit-oriented goals.

We can’t discard this unique opportunity in a business give-away.

Image above: California High-Speed Rail train, altered version from that produced by state high-speed rail authority

» As Europe pushes competition in the railway sector, the role of the public enterprise slowly fades away.

The first threat came earlier this year, when French national railway operator SNCF signaled that it was considering cutting some TGV high-speed train routes between the nation’s regional capitals. Facing increasing track use fees and the economic recession, one in five TGV services now lose money, and SNCF seemed ready to stop operating direct services from Bordeaux, Nantes, and Lille to Strasbourg. Many people hoping to travel from destinations in the eastern part of the country to the west would have to transfer in Paris.

Still under the control of the French government, however, SNCF announced that no TGV services would be cut, and that the rail company would have to find ways to increase ridership or cut services elsewhere. For regional officials across the country, this was a relief, a sign that the nation’s rail transport would continue to serve as an engine for universal mobility, not simply for the movement of Parisians.

Yet with European regulations altering the role of the public railway across the continent, the decision the SNCF almost made no longer appears like an aberration — rather, it probably will be the future norm. That’s because European regulators, focused on increasing competition in areas of former public monopoly, have asked SNCF to abandon its public enterprise status by July 2010, or the French government will be penalized for handing out an illegal subsidy. With France’s formerly publicly owned gas, electricity, and aviation companies now private, the pseudo-privatization of SNCF would be just another example of the liberalization of trade in what can only be described as a now market-obsessed Europe.

With none of the public and political pressure to maintain high-speed service between regional capitals, SNCF seems likely to move away from any operations that aren’t money-making once it separates fully from the public envelope. The result will be a general decline in service along less-used routes — a depressing outcome for a system that has developed so well over the past few decades.

Because of decrees by the Brussels-based European Union, France no longer has the ability to make independent decisions about how to operate its railways but instead must follow free-competition rules supposedly designed to improve the efficiencies of the railway market and reduce fares for customers. This represents major a change, especially in France.

The rail network was once operated under public monopolies across Europe, with national operators controlling each individual market and international routes the subject of intense negotiation and agreements between countries. This system had a number of benefits, notably in France, where SNCF was conceived as a service providing more than simply transportation, but also societal equalization, befitting its designation as a public enterprise. The company has reduced fares for children, young adults, seniors, and large families — as a matter of social concern. The operator offers high-speed tickets at cheap prices compared to comparable services in Germany, Spain, or Italy — a policy that has resulted in highly frequented TGV trains and a general equality in train service for people of all income classes. There are no slow, poor-person trains on routes where TGVs are offered.

The lack of competition also allowed SNCF to transfer profits from its TGVs to subsidize Corail routes, which provide national intercity services on routes that don’t yet offer high-speed trains.

But the success of the SNCF in running the French railway network has not been adequately appreciated by European officials (or by conservative French President Nicolas Sarkozy), who have made a conscious decision to emulate the British rail system, which has been open to competition since 1994. That network, in which track ownership (sometimes public, sometime private) is separated from private train operations, has extensive failings. An effort to use public-private partnerships to construct the United Kingdom’s first high-speed line resulted in a bankruptcy in which the state had to bailout the creditors and take the losses. The recession pulled several private operators out of business, leaving the state to take command of several money-losing routes.

It’s hard to see the British example as anything other than a racket designed to transfer profits into the private sector and force the public sphere to absorb losses. And yet European officials are adamant that the continent’s more successful rail systems follow in its example.

France made the first step in that direction in early 1997 with the creation of the public Réseau Ferré de France, which took control of the nation’s rail network from SNCF, leaving the company involved in operations alone, paying RFF for the rights to use tracks and opening the way for competition from other companies. This allowed SNCF to make large profits, since it was no longer required to take on debt for the construction of expensive new rail lines. But the creation of RFF immediately established a conflict of interest between operator and track owner: one is intent on paying back the costs of high-speed lines, whereas the other has pursued a socially equitable policy in the distribution of transportation resources.

As a result, RFF has been increasing track use fees significantly over the past few years. As a bureaucrat at SNCF put it: “We’re stuck: we’re asked to make money. But the tolls paid to RFF to run TGV services keep going up. At the same time, we’re asked to keep running trains, even when they lose money.” Between 2005 and 2013, RFF will increase SNCF track fees from €1 billion to €2.2 billion, enough to destroy the operator’s profit and eventually push it into bankruptcy unless the government comes to its aid — unlikely considering European regulations. RFF, meanwhile, made a profit in 2009.

At the same time, SNCF faces increasing competition from private and foreign operators that plan to make a play for the lucrative French market beginning as early as this year. They are expected to be able to offer competitive services because their employees lack the employment protections and good pay SNCF workers have earned after years of negotiations and strikes. That said, these competitors will have significant start-up costs, including the not-exactly-cheap purchase of new high-speed trains.

The French government has made a commitment to aid the company whose days as a public protectorate seem short-lived. Money-losing Corail trains, which cost SNCF €150 million a year, are to be contracted out to SNCF by the state, similar to the way the TER regional rail operations are now run by each of France’s 22 regions. This will make the company’s only non-governmental services the TGV lines.

Because of the RFF’s high track fees, a newly profit-motivated SNCF is likely to abandon corridors that are marginal, including those region-to-region routes that almost saw the axe this year; most TGV services seem likely to be relegated to routes with destinations in Paris, Lyon, or Marseille, the country’s three biggest cities. This in spite of the fact that many peripheral regions expected to see declining services contributed directly to the construction of new high-speed lines. But now that RFF and SNCF have completely opposing motivations, it doesn’t matter, since track construction ownership is separated from operations. Regions can no longer assume service expansion to be the expected result of investing in new routes.

In addition, SNCF seems unlikely to continue offering the deep discounts to the young and old it can currently provide, since it will now be focused on providing more expensive profit-building business trips between the country’s biggest cities, routes that will face increasing competition from other operators in the future. If those benefits are to be extended, they will have to be subsidized by the state.

In many ways, these new European regulations put into question the French model of social equity in rail services; the manner in which competition is being pursued will fundamentally transform the role and goals of the SNCF. It’s difficult to conceive of a way in which this will produce general improvements in service for the country’s population.

Image above: Paris’ Gare de Lyon, from Flickr User Nojhan, under a CC 2.0 License

» Of the dozens of rapid transit projects under construction and planned for the French capital, few are aimed directly at the center city.

The civil unrest that spread across many of France’s impoverished banlieues in October and November 2005 made clear the degree to which spatial separation between classes had resulted in unequal distribution of resources and consequent feelings of disenfranchisement by members of the country’s most needy.

Nowhere is this inequality more evident than in the sprawling Paris region, whose 11.7 million inhabitants form one of Europe’s two largest metropolitan areas.* For years, commercial activity has been growing in the massive La Défense business district west of the city, only encouraging the wealth of that side of Île-de-France. The lower class is heavily concentrated in the northeast suburbs, whose formerly industrial cities are replete with high-rise social housing complexes constructed in the post-war period. Though no French town suffers from the abandonment common in some postindustrial American cities, there are clear differences in public services provided by the government.

In many ways, this is most obvious in terms of transportation: The town where the riots began, Clichy-sous-Bois, is hours away from the city center via public transportation despite only being some fifteen kilometers from the city’s borders. While virtually all inhabitants of Paris itself have access to subway stations within a half-kilometer or less, many suburban cities have limited bus and rail service — even though a huge percentage of the population lacks automobile access.

National and local governments have made a big deal of their interest in reducing those inequities. Conservative President Nicholas Sarkozy made a big step in March 2009 in announcing a 130 km automated transit project that would form a double loop through the suburbs. This Réseau Primaire du Grand Paris will cost some €20 billion to complete and serve as the major spine for regional development over the next few decades, much as has the RER regional express network mostly built in the 1960s and 70s. Unlike the Paris-centric RER, however, this Grand Paris system would be designed to avoid the center-city and focus investment in frequently overlooked suburban zones.

Mr. Sarkozy has committed planning dollars for the project, but he has been less forthcomin in defining where he will find the funds to sponsor the project’s construction, whose cost may make it the most expensive single rapid transit project in the world. He has also clashed repeatedly with many local officials, who are worried that the government’s right to use eminent domain in station-area zones will simply produce bourgeois enclaves around them and do little for the existing adjacent communities.

The Île-de-France region, under the control of Socialists, who along with their Communist allies control six of the region’s eight départements (similar to counties) including Paris, has been more proactive in both proposing solutions and funding them. As a result, the region now has under construction seven tramways, three metro extensions, two reserved busways, and a tram-train project — all but one of which will be in the suburbs.

By 2014, once most of the projects are completed, the region will have more than 100 km of tramways operating almost entirely in dedicated rights-of-way, up from around 40 km today. Metro extensions will ring out from the city, and 25 km of bus rapid transit will reach some of the least-serviced areas.

The campaign to ramp up construction on the tramway lines now coincides with the regional elections planned for March this year, in which the Socialists hope to maintain control of 20 of 22 regions they won in 2004. The popularity of these trams, which operate much like American light rail lines, make them a clear electoral selling point.

Tramways have major benefits: the ability to handle routes in very high demand as a result of their long vehicle lengths, up to 143 feet. The T1 and T3 lines already carry over 100,000 daily riders, almost as much as some metro lines, which are usually far more expensive to build. This makes tramways ideal for routes between suburbs or dense neighborhoods, which don’t have the high peak demand required for lines running towards business districts. Their implementation in some of the poorest sections of the region, such as in and around St. Denis just north of Paris, will reduce commuting times and encourage safer, more walkable communities.

In addition, regional officials plan metro extensions on eight lines that will radiate from the city into the surrounding towns, as well as three more busways.

With the exception of the Grand Paris network, the largest rapid transit program likely to be built over the next few years is the extension of the RER E from St. Lazare train station to the La Défense district. The project will include the construction of an 8 km tunnel through some of the region’s most populated (and most valuable) areas, a huge new interchange station, and the furthering of regional rail service west to the town of Mantes. It will cost up to €3 billion.

The new RER E tunnel will parallel the RER A tunnel that opened in 1977, now completely overcharged and rated as the western world’s most-used transit line, with over one million daily passengers.

The region’s decision to fund the RER E’s construction will drastically reduce commute times between destinations east and west of the city and the project by itself will probably attract as many passengers as the entire tramway network, which will carry an impressive 800,000 daily riders by 2014 according to regional officials.

Île-de-France’s commitment to reinforcing suburban service over building new inner-city lines is a direct reflection of Paris’ unique situation: the city has virtually all the public transportation it will ever need, even as the dense surrounding suburbs are mostly deprived of the same.

But American cities like Washington, San Francisco, and Boston, each of which have dense suburbs, could learn a thing or two from the French approach. By distributing public transportation capital funds at the regional level, many disparate areas can benefit from new rapid transit lines. Similarly, by encouraging the development of separated-lane rail and bus projects throughout the suburbs, rather than simply in the core, the idea of living car-free can be extended beyond what are typically considered the pedestrian-friendly zones at the heart of the central city.

The typically arbitrarily defined boundaries between the central city and its surroundings shouldn’t determine whether efficient transit connections are made between dense neighborhoods — and that’s ultimately what Île-de-France regional officials are making clear in their decision-making about how to distribute funds.

* Greater London is either somewhat larger or somewhat smaller depending on the calculation used.

Last week, Le Figaro reported that Veolia Environnement will be working with Italy’s Trenitalia national rail company to compete on French high-speed rail routes beginning in 2012. The ramifications of the move are significant: it will open up existing lines to multiple operators, producing consumer choice currently not available because of a decades-old monopoly on intercity operations by French national rail corporation SNCF. This competition is mandated by European Union law, which is intended to reduce transportation costs by opening up services to multiple operators.

But even if some routes see lower fares, the overall effect on the rail system is less positive. Competition on the most valuable routes seems likely to reduce investment on less profitable segments. In the meantime, operators, interested in increasing revenues, will be predisposed to angle services towards more wealthy passengers — meaning fewer travel opportunities for people across the economic spectrum.

The new competition from Veolia and Trenitalia isn’t surprising: both have been considering entering the French market for the past year. Veolia was in discussions with Air France about operating a train service, and Trenitalia is already planning two trains a day between Paris and Milan and Paris and Genoa next summer; some of these trains will also stop in France’s second and third largest metropolitan areas, Lyon and Marseille.

Together, the companies hope to take on Eurostar on the Paris to London corridor, Thalys on the Brussels to Paris Corridor, and DB German Railways on the Paris to Frankfurt international corridors. The market is currently only open to travel in which 50% of both volume and turnover is by passengers traveling between multiple countries as France won’t open its domestic market for a few more years. But Veolia clearly has its sights on the more lucrative and more trafficked travel between destinations within the country, and its chosen routes will allow it to sell tickets for trips between Paris and Lyon, Paris and Lille, and Paris and Strasbourg, three of SNCF’s largest ridership generators.

In other words, Veolia and Trenitalia are going straight for the French rail company’s throat. SNCF is reciprocating by competing directly with Trenitalia on Italian domestic routes with its 20% investment in NTV, which will offer high-speed service there starting in 2011.

Veolia may be able to offer lower prices because SNCF’s employees are well-compensated for their work; those driving for and working on the private company’s trains are likely to receive 30% lower benefits. SNCF claims that its arsenal of hundreds of TGV trains, tens of thousands of employees, and good reputation will be too much for even an industrial mammoth like Veolia, which is the world’s largest provider of outsourced public services. Yet that company’s recent merger with Transdev, a major transit operator, makes it a transport monolith; together, the companies operate the light rail systems in Barcelona, Madrid, Sydney, Dublin; the metros in Seoul, Genoa, and Porto; commuter rail in Miami, Boston, and northwest Germany; and bus rapid transit in Las Vegas and Bogota — among others.* This will be a battle of titans.

SNCF’s position in France, then, is under threat. Veolia’s choice to compete on the company’s major intercity routes is not surprising: they’re where the money is. SNCF brings in 85% of its passenger fare revenues from its TGV division, effectively subsidizing many of its local commuter and slower intercity services with high-speed operations. Meanwhile, the rising fees being charged for track use — a result of conflicting interests between the infrastructure owner and the rail operators –  could make the situation worse by reducing profits on the high-speed lines.

If SNCF is forced to lower prices on its most profitable routes, it will see decreasing revenues and potentially be forced to scale back services on the lines it operates at no profit. On the other hand, if SNCF decides to attempt to increase profit, it could actually increase fares and improve service quality, with the intention of expanding its wealthy and business clientele.

Either way, the lives of France’s citizens aren’t likely to be materially improved by what isn’t going to be pure competition but instead something more closely resembling a fight between an oligarchy of mega-operators. One of two outcomes is predictable: service will be compromised on less valuable lines as ticket prices decrease slightly on the heaviest traveled corridors even as employee compensation is reduced, or fares will increase and high-speed trains will become a commodity for members of the upper half of the income spectrum alone, as it already is in countries like Germany.

Though France’s situation might seem irrelevant from the North American standpoint — it, after all, has been operating high-speed trains for almost thirty years while neither the U.S. nor Canada have a true fast rail system — the involvement of private interests in transportation investment is clearly an issue in similar U.S. projects. California’s planned high-speed system, which will transport passengers between Los Angeles and San Francisco in 2h40 by 2020, will be primarily funded through government spending, but the State High-Speed Authority expects to attract several billions of dollars in private financing to pay for the project’s costs.

In the California Authority’s most recent report, it argued that fares should be set at around 83% of equivalent air fares, after arguing in previous years that fares set at 50% would also be an option. The latter choice would produce a slightly lower annual yield, despite the fact that it would attract almost 20 million more annual passengers by 2034 compared to the more expensive option. In order to interest private involvement in the process, the Authority seems to be choosing to prioritize profits over increased mobility. That’s because a private company’s interest, of course, is to maximize profits, not necessarily to be an engine for social improvement. The State of California, on the other hand, has — or should have — a different mission.

But the rail system wouldn’t necessarily be built without the private funds; neither the federal or state government is flush with cash at the moment, so increased public funds wouldn’t be simple to assemble.

This quandary, then, is similar to that faced by the French and European rail systems — opening what had been a public enterprise to the private market may increase investment (and even perhaps improve some services), but the consequence seems likely to be an increase in social inequalities by reducing access to transportation for the less wealthy and for those who don’t live in the most populous regions.

The correct answers to these questions is subjective, coming down to what ideology is expressed by decision-makers. Transportation can be conducted in such a manner that encourages profit creation, or it can focus on expandeding transportation provision to everyone. Which route will we pick?

When SNCF opened its first TGV high-speed line between Paris and Lyon in 1981, its marketing campaign used the motto Le progrès ne vaut que s’il est partagé par tous (Progress is worthless unless it’s shared by all), a slogan that seems quite pertinent in all matters of transportation investment. And indeed, the company has fulfilled that objective in many ways, offering fast trains at low prices for everyone throughout its history and systematically providing deep discounts to the young, the old, and those with large families.

Will it be able to do the same in a system where competition is encouraged? Or will it be forced to sacrifice the goals of mass transport for the benefit of bigger profits?

If the competition between Europe’s two largest national rail operators SNCF and Deutsche Bahn (DB) was to be expected, it didn’t seem like it would come down this hard.

Last week in an interview with the Financial Times Deutschland, Ulrich Homburg, head of passenger transport at DB, declared that he was readying a “bloody battle” with his French peers. With international rail services opening up to competition on the French market beginning next month, you would expect Germany’s huge rail operator to be confident in moving onto SNCF’s terrain. But Mr. Homburg is adamant that the fight won’t produce good results for the rail companies or, ultimately, customers. “In a war,” he argued, “there are no winners… It will leave deep traces on the balance sheets.”

If Mr. Ulrich’s reaction seems exaggerated, it may be more a reflection of his fear that SNCF’s TGV services, which have a great reputation both on the domestic and world markets, will attract more customers than his own ICE trains. SNCF has submitted plans to operate high-speed trains between Frankfurt and Berlin and Frankfurt and Hamburg between 2011 and 2016 using either its own workforce or that of its subsidiary Keolis, using a fleet of 35 new international-ready TGVs the company is planning to order soon. This move surprised DB, which has thus far declined interest in new international services operating in and out of France. But DB is working actively to plan new services to compete with SNCF-owned Eurostar on routes from Germany to the United Kingdom. Eurostar is in turn planning direct trains between London and Amsterdam.

The French national rail market remains closed to competition until 2012. The cooperation the two companies currently hold in managing routes between Paris and Germany, in which ICE trains run to Frankfurt and TGVs to Stuttgart, may be coming to an end. The fate of Railteam, the European rail alliance, is unclear. The broader profitability of the national companies is in question.

The immediate effect of the new competition on international routes from France and national routes in Germany (also planned in Italy by partially SNCF-owned NTV) is likely to be decreased fares on corridors where more than one operator provides rail services. Unlike the system in Japan, where six rail companies have monopolies on intercity rail services in the respective regions they serve, or that in the UK, where train operating companies hold franchises on specific routes, mainland European high-speed rail competition will mean more than one company competing on the same lines, similar to the way deregulated air service works.

Like with airlines, customers will acquire the ability to choose the cheapest fare from a series of options, especially on high-demand routes, something they currently lack because of national rail monopolies. Standard amenities will likely increase. In the short-term, these changes may seem good for the consumer.

But in the longer term, as argued by DB’s Mr. Homburg, competition could spell disaster for the European network, which is currently renowned for its high standards.

The biggest problem results from the European Union-mandated separation of infrastructure and operations. In the past, national rail companies like DB and SNCF managed their budgets so that profits from their unsubsidized high-speed lines went into subsidizing their own infrastructure work on corridors throughout the system, for high-speed and local trains; a relatively balanced budget throughout the system was mandated by the fact that the tracks and the trains were owned by the same people. If the affiliated government decided to expand investment in new rail services, it would have to make up the costs through the provision of some other source of revenue.

But by moving infrastructure ownership to new public authorities (such as RFF in France) while keeping rail services in the hand of the national operator, two budgets were created, both of which had to be balanced, but, essentially, not necessarily with each other. Fortunately, of course, European rail authorities have no current plans to privatize infrastructure. Experience in the United Kingdom and Taiwan indicates that that’s a bad idea. Still, if the infrastructure owner is asked by the government to invest in new high-speed lines, it has to find the means to do so; meanwhile, the train operator has an incentive to reduce costs, especially if it’s faced with direct competition resulting in lower fares. The demands of the infrastructure owner, in other words, are not necessarily aligned with those of the train operator. This could lead to a budgetary conflict of interest.

Even without competition, SNCF is already suffering from the consequences of losing control over the French rail infrastructure. Though SNCF profited massively in FY 2007 and 2008 because of significant returns from its TGV operations, the recession has put it in trouble. In the long-term, though, the bigger problem is RFF, which is dramatically increasing track use fees to pay for debt service on its huge expenditures on new high-speed rail corridors and on the maintenance of local lines, which cannot pay for themselves. RFF is planning to increase charges on SNCF’s high-speed track use by 145% in ten years, from less than one billion euros overall in 2005 to 2.2 billion euros in 2013, completely eliminating the billion-euro annual profit from TGV services. The effects of new competition will magnify the problem.

At the local level, the changes won’t be as serious, because commuter trains remain subsidized by the national and regional governments, and will be even if the operator chosen is private. Germany’s regional rail market, already opened to competition from companies such as Keolis, works more on the British standard, with monopolistic franchises sent out to operators on a corridor-by-corridor basis. Subsidies for these unprofitable lines will continue to be distributed. European labor laws make it difficult to envision many people losing their jobs when operators change hands — making it likely that for most routes, because of the annoyance of firing and rehiring engineers, the national rail operators will remain in charge.

But by opening the potentially very profitable high-speed markets to competition, the national rail operators, though still mostly owned by their respective governments, become pseudo-private in the manner in which they operate and are perceived. The result: the government cares more about keeping infrastructure expenditures in the black than ensuring the continued viability of high-speed rail operators. This is the inverse of what should be happening, because it could ultimately mean the bankrupting of national rail companies and vastly inferior service for users.

In whose interest? It will mean fewer labor rights for workers who have spent years working for better salaries and benefits but who now are required to compete with the less-protected employees of other companies. It will mean more service on the most popular routes from a host of companies but fewer operations on high-speed lines that attract a lower patronage. If fares decrease initially, higher track user fees will undoubtedly mean increased passenger costs in the longer term.

Having national rail companies remain in control of operations and infrastructure ensures a more stable equilibrium between costs and returns and provides a model that allows high-speed trains to subsidize other operations, but without going overboard. It allows an honest assessment of how far rail profits can go, and prevents the damaging effects of competition, such as its tendency to lower fares to unsustainable levels.

The government’s expectation that operating companies can pay for infrastructure costs, including new investments, is unrealistic. SNCF is demanding that France rethink this philosophy, as it’s currently stuck, wanting to finance the purchase of 300 new TGVs for mainline operations but unable to do so because of an insecurity that it will be able to profit in future years. DB is similarly insistent that the German government reassess the manner in which it has allowed competition to advance on the home turf — especially since intercity rail in that country is open whereas it won’t be in France for three more years.

The danger of increasing competition of the European market with the present separation of operations and infrastructure can’t be more clear: it could mean the destruction of the viability of the national rail companies, which have provided some of the most reliable, convenient, and comfortable service in the world. The benefits to customers are ambiguous at best. A rethinking of this process should be in order.

» National rail company SNCF plots new TGV service for province-to-province trips, with coordinated development of stations in Paris’ suburbs.

With a high-speed rail system whose capacity and breadth expands every year, France boasts of an efficient national travel network. It is limited, however, because of its historic focus on its terminal stations in Paris, which account for a large percentage of overall trips. Today, customers traveling from region to region, uninterested in stopping in the capital, still are often required to switch trains in Paris, a time-consuming transfer that typically requires crossing the capital by metro. Meanwhile, the city’s suburban residents, who make up 80% of the population of the metropolitan area, are forced to enter the city to make most rail trips.

SNCF railways is plotting a solution through the construction of two new circumferential lines and five new stations in the suburbs. As the United States government prepares to commit to significant investments in new high-speed rail corridors, it should look to Paris to examine the French capital’s planning errors and its new efforts to remediate the situation.

The first three French high-speed lines operated on the same simple model: depart from a Parisian center-city station and extend to a major city in the provinces. The LGV Sud-Est extended to Lyon from Gare de Lyon in 1981; the LGV Atlantique departed from Gare Montparnasse towards Le Mans and Tours in 1990; the LGV Nord, heading to Lille, left Gare du Nord in 1993. Each provided excellent connections between Paris and regional cities, but commuters hoping to avoid the capital altogether were left without fast options. Though the required transfers through Paris may increase the stature of the capital city, it does a complete disservice for people who want to get from region to region. It encourages air and car alternatives.

That situation changed somewhat in 1994, when the LGV Interconnexion Est opened. The 35-mile link connected the Sud-Est and Nord lines and created two new stations at Charles de Gaulle Airport and at Euro Disney in Marne-la-Vallée. The project has made it possible to travel 600 miles from Lille, in the country’s north, to Marseille, on the Mediterreanean, in less than five hours, without a transfer in Paris.

But for people attempting to get to the west side of the country, there’s no simple solution. TGV trains traveling east-west through the Paris region have to share commuter rail tracks through the south of the city. Trains heading to the northwest of the country, which is currently disconnected from the high-speed network, have to use extensive sections of out-of-the-way, slow-running track.

SNCF’s solution to the problem will involve the construction of two new lines — one circling around the south of the city, and the other traversing the northwest. Each project would eliminate transfers for province-to-province travel. In the south, Orly Airport and Villeneuve-Saint-Georges would get TGV service. The northwest line, which would share tracks with the new circumferential automatic metro being planned for the Parisian suburbs, would connect Europe’s largest business district at La Défense and the growing hub at Pleyel, each of which would be provided brand new stations.

The French rail company envisions new terminals on the scale of Shanghai’s south station that will allow commuters direct travel to areas virtually everywhere in the country. The La Défense hub would have the honor of hosting the terminus of the LGV Normandie line, which would connect Paris to Le Havre on the Atlantic coast in just 1h15, compared to two hours today. No longer would all of the major hubs be located in Parisian city limits.

The plan has a number of substantial benefits. Eurostar trains would connect La Défense with the City of London in 2h15. The overload of trains and passengers at Paris’ existing train stations would be relieved by the implementation of new service at suburban hubs, which would reduce overall travel times for people who live outside of the city.

Many of these problems could have been solved years ago had the TGV network been built from the start with through-running trains with a tunnel under central Paris, such as one connecting the Gare Montparnasse and the Gare du Nord. That project, however, was never pursued because of its high cost. And the construction of the new south and northwest links would essentially solve the problem by allowing a detour around the central city. In its recent proposal for Midwestern high-speed rail, SNCF promoted the idea of constructing a bypass of Chicago in the project’s first phase, indicating that it had learned its lesson.

Indeed, the recent French interest in expanding access to the Parisian suburbs is indicative of the fact that singular central city stations are not always enough to satiate the rail travel demands of a region’s residents. Unlike air travel, which relies on just one or two airports per region, rail has the advantage of being able to access several stations; this allows people in different parts of a region quick access to service. If today, most residents of the Paris area have to enter the city to get on a TGV, SNCF’s proposals will open travel to people in the north and south.

In the U.S., where cities are more spread out and where public transport links are less well developed, stations outside of downtown such as those SNCF is developing could be an important element of preliminary high-speed plans. If the Washington-Charlotte rail line is ever improved to true high-speed service, for instance, a bypass around Washington to allow more direct service to areas north of the American capital could be necessary if capacity ever becomes a problem. A station in suburban Virginia would be obligatory — as long as it is placed in a reasonably built-up area to avoid inducing sprawl.

That said, as the French example shows, it may not be necessary to build those suburban connections first; the TGV has been enormously successful so far with mostly center-city stops.

Connection, to be built by 2025, will reduce Paris-Nice travel times from 5h25 to 3h50.

After years of controversy, the French government announced yesterday that it would fund a new TGV route from Marseille to Nice along the country’s Côte d’Azur. The project, which will cost upwards of €15 billion to build, will provide significant travel time savings along the Mediterranean coast and dramatically improve connections between Paris and Nice. The statement by Jean-Louis Borloo, Minister of Ecology, sets the stage for a decade-long engineering and construction program.

This new line will be the most costly high-speed rail line yet built by the French government, a result of its planned numerous tunnels and bridges. The single most expensive element of the program will be a train tunnel under Marseille, where TGV trains from Paris currently terminate at the stub-end St. Charles station. The country’s mountainous coastline similarly poses a number of challenges to the project’s completion.

The brand-new route is necessary because the existing line, which connects France’s third, sixth, and tenth largest metro regions — Marseille, Nice, and Toulon, respectively — is saturated and sees traffic equivalent to that in the Ile-de-France capital region. As a result, the government considered a number of alternative routings for the line, including several routes that would have bypassed both Marseille and Toulon. Those inland corridors would have been far cheaper to build, but would have disrupted the landscape made famous by Cézanne’s late 19th-century paintings and were subject to strong local opposition.

The choice of a coastal route has a number of advantages, though it will lengthen Paris-Nice trips from a 3h40 travel time for the inland route to a modestly slower 3h50. On the other hand, the route improves accessibility for Marseille and Toulon, both of which would have been sidelined had the other route been picked. Nice and Marseille will now be within one hour of one another, versus 2h25 today. This route choice also will provide better connections between Marseille and Italy when improvements are eventually made on the line between Nice and Genoa.

One likely result of the line’s completion will be a diminution of traffic at the Nice Airport, which is currently the country’s third largest after a pair in Paris. Lyon and Marseille, both connected to the high-speed network, see a third less traffic at their respective airports even though their metropolitan areas are each almost twice as large as that of Nice. Nice’s airport will probably see about half its routes eliminated.

This news comes just after the French government approved plans for a new high-speed route between Paris and Le Havre along the coast in northwestern France. That new corridor, to cost €4 billion, will connect the capital to the coast in 1h15 — compared to two hours today — and be completed by 2020. Interestingly, a section of this line will also serve as a reliever for Paris-London Eurostar trains, which will branch off the route and head towards the Eurotunnel at Calais. Eurostar trains are currently confined to the at-capacity Paris-Lille TGV line. In time, that connection will be reserved for TGV and Thalys trains routed towards Belguim.

Image above: Route of new train connection, from France Info.