A package of legislation to overhaul the management of funding for rail and public transport aims to bridge a chronic gap in infrastructure funding and deliver the SERM suburban rail development programme, as Jérémie Anne explains.
When Jean Castex met politicians in the Assemblée Nationale in October last year as part of his confirmation as the next SNCF President, he asserted that the national railway holding company would face ‘the mother of all battles’ to restore the quality of the national network.
There is no doubt that the French network is one of contrasts, typified at one extreme by the most recent sections of the LGV network such as the Tours – Bordeaux corridor, and at the other by a swathe of lines that are effectively closed because of the poor condition of the infrastructure. This is not a new issue: it was emphatically set out in the review of the state of France’s railways undertaken by former head of Air France-KLM Jean-Cyrille Spinetta as long ago as 2018.
Overall, the national network covers approximately 28 000 route-km, of which the average age is 29 years. This compares unfavourably with neighbouring Switzerland, where the average asset age is 15 years, as Transport Minister Philippe Tabarot has been regularly reminding policymakers.
Even if €3bn per annum is being spent by SNCF Réseau on improving the state of the network, it clearly is not enough to stop a gradual decline in quality. Climate change is a big factor in the rising cost of maintenance, necessitating big unplanned interventions to restore service. Indeed, such is the need to manage the fundamentals like track renewals that the important task of modernising the network is increasingly being deferred. No less than 5 000 km of so-called dessertes fines (rural lines) are thought to be at risk of closure through infrastructure degradation. This can be seen by the limited progress with major projects such as the Commande Centralisée du Réseau programme to rationalise 2 200 signalboxes into 16 centralised network management centres, as well as the slow roll-out of ERTMS across the country.
Moreover, the atrophying of the legacy railway is increasingly apparent from the frequent disruption to services seen at key hubs, which is rising up the political agenda as complaints from passengers and freight shippers become increasingly vociferous. In some cases, the incidence of delays and cancellations is such that rail advocates fear a closure of some lines by stealth. This has led Tabarot to reiterate that ‘in infrastructure, postponing spending rarely leads to a saving in the long run’.
Ridership surges
In some respects, diagnosing the problem is the easy part. Addressing it has undoubtedly been made harder by a surge in ridership across the country in the post-pandemic period. In 2025, TGV patronage was up by 4% on the previous year to reach 168 million passenger-journeys, while TER regional trains carried 1∙3 million passengers per day in 2025, representing a 3% increase on 2024.
Regional rail usage has grown by no less than 40% since 2019, with a similar growth rate recorded on conventional inter-city services and night trains. The government says that this boom is reflected in public attitudes, with polling by the transport ministry finding that 56% of the public were in favour of what it termed ‘massive investment’ in the rail network.
A new framework
In the face of these megatrends, the government has been seeking to accelerate investment to try to deliver some rapid improvements in so-called ‘everyday trains’: the regional and commuter services that are used by high volumes of passengers on a regular basis.
The centrepiece of this drive was the launch in 2023 of legislation to create dedicated suburban rail services across the country under a programme known as Services Express Régionaux Métropolitains. However, the creation of SERM also acted as a catalyst for the government to reassess the rail funding policy framework, especially in light of the need to comply with EU directives on market liberalisation.
The reassessment culminated in a series of reports that were exchanged across the political divide, reflecting the relative instability of recent French governments and the difficulty of agreeing national budgets. But eventually, between May and July 2025, the SERM vision, as well as the question of funding SNCF Réseau, coalesced into a series of summits branded Ambition France Transports. Chaired by former Transport Minister Dominique Bussereau, they brought together approximately 150 specialists who were tasked with defining a funding mechanism for the transport sector, with rail at the heart.
A core aim was to find a way forward in a way that could survive the country’s increasingly partisan political landscape. In addition, AFT has sought to address the so-called ‘grey debt’ question. This is the cost attached to the increasing maintenance backlog facing SNCF Réseau; in its own contribution to AFT, the infrastructure manager estimated this funding gap to total at least €15bn.
Following the various meetings, Bussereau submitted a report making a series of recommendations to the government. These are now being worked up by Tabarot, and the result is a so-called loi-cadre (‘framework law’) or green paper, that sets out the government’s position ahead of legislation being brought forward.
Favouring public transport
Officially known as ‘framework law 394 in favour of transport’, the legislative proposals were formally introduced to the national assembly on February 11.
Parliamentarians were due to begin scrutinising the plans last month, with an initial debate in the upper chamber scheduled for mid-April. To date, the published policy framework includes 22 clauses, of which many are focused on rail issues. Among the key priorities are addressing the ‘grey debt’, helping the railway infrastructure handle changing climatic norms, and delivering decarbonised transport.
In terms of actually delivering these aims, one key announcement stands out: a proposal to use hypothecated funding from motorway tolls to boost the rail infrastructure budget. Rail advocacy groups have long campaigned for such a reallocation, and with the looming expiry of several highway management concessions between now and 2031, the opportunity for implementation may now be at hand. The government is proposing to replace the existing model with shorter highway concession periods that would see income diverted to support public transport investment, with rail a key beneficiary.
According to Tabarot, a key facet of the plan would see ‘foreign heavy truck operators’ making an active contribution to improving French infrastructure, which he feels is not currently happening. This and the revised motorway concessions are together expected to generate up to €2∙5bn per annum ‘without recourse to fresh taxes or adding to the national debt’, he believes. ‘The guiding principle is that transport should fund transport.’
The scheme would be overseen by national transport infrastructure agency AFITF, which is part of the transport ministry. The body would be tasked with collecting the hypothecated revenues and reallocating them ‘across all modes and all regions’, Tabarot says.
Long-term directive
Assuming that the legislative proposals proceed, the next step in delivering the AFT aims would be to introduce a strategic planning directive, or loi de programmation for the transport measures.
Similar instruments have recently been deployed to deliver long-term strategic interventions in fields such as military spending and the funding of academic research. They are intended to set a policy direction to deliver a particular goal over a period of several years.
The directive would set out the major projects to be delivered over a 10 year period and allocate clear funding for each of them. This approach — also long desired by rail sector trade bodies — would give a higher degree of certainty to local authorities, project promoters and the supply chain about which schemes will be delivered and within what budget.
The investment packages covered by the directive will be set out by the Conseil d’Orientation des Infrastructures, another strategic planning body that has previously been tasked with prioritising transport spending and ranking project proposals accordingly. The final contents of the loi de programmation would be subject to ratification by the Assemblée Nationale.
Debt relief
The government has made clear that it regards the renovation of the rail network as a national priority. As such, it has indicated that it is willing to offer some leeway on the so-called ‘golden rule’ that governs the level of debt SNCF is able to accumulate. This has been a long-standing concern that dates back to the time of the Spinetta review, since when the government has sought to limit the state railway’s overall debt to no more than 18 times its operating margin.
Tabarot insists that ‘a brutal reduction in investment in regenerating the network’ for accounting reasons must be avoided at all costs, and flexibility on the debt ceiling means that the annual allocation for renewals by SNCF Réseau will grow from €3bn to €4∙5bn ‘from 2028’. To accommodate this change, the national performance contract between the state and the infrastructure manager is being revised, with the updated plan due to be published ‘this spring’.
However, industry insiders remain concerned that the funding boost has not yet been formally included in the wording of the draft AFT legislation, raising doubts about whether the government will really follow through with the promised extra €1∙5bn.
Other sources of funding are also being tapped, including SNCF’s own support funds that were introduced under the Spinetta reforms in 2018 — these are worth an estimated €500m per annum. Surpluses from SNCF Voyageurs’ TGV operations will be redirected to SNCF Réseau, and the government has pledged to assess other options including EU grants and receipts from energy trading activity.
More radically, Article 5 of the proposed legislation raises the prospect of private finance being raised to support rail investment. According to Tabarot, the government is keen to ‘evolve’ the framework for funding the railway to facilitate access to ‘innovative private finance mechanisms’. However, the application of this approach would be limited to specific tasks; one such case he cites is the roll-out of ERTMS on the French segment of the EU’s Atlantic Corridor. He suggests that a PPP model could be used, similar to that used to fund GSM-R deployment in the 2010s.
Private financing is intended to ‘complement existing funding streams’ but would not be obligatory for any particular projects, he suggests, Nevertheless, he believes that ‘companies are ready to invest, and the needs are so great that it is irresponsible to forgo [these] sources of funding’. He reiterates that strict rules around transparency and governance would govern any future PPP agreements.
Market opening
Meanwhile, back on the railway, the process of opening up the domestic passenger sector continues. Some of the current shortcomings in the functioning of the market are being addressed in the AFT package, notably in the field of passenger rights. Rules on journey continuation in disruption are included in the legislation, as are fresh regulations on third party information providers to ensure passengers can be kept abreast of changes to their journeys and be offered redress or compensation accordingly.
As has been seen elsewhere in Europe, there are frequent complaints from the incumbent that new entrants are solely focused on securing access to the passenger flows with the highest yields. Rail regulator ART has already agreed the level of access charges that SNCF Réseau can levy in 2027-29; this includes a cut in the tariffs for certain passenger services that are deemed essential to the ‘territorial integrity’ of the country.
Tabarot says that the AFT legislation will ‘contain various incentives that will encourage operators to explore opportunities across the whole country’, although he cautions that it is ‘too early to impose rules on operation of loss-making services’ on the new entrants. He has therefore asked Bussereau to undertake a specific investigation into how best to balance the needs of providing regional services, with the conclusions expected to be released in the coming months. One option reportedly under consideration is a cut in access charges for trains that serve rural stations.
SERM gains ground
The next phase of development of the SERM programme is also reflected in the AFT strategy. At the outset, it was intended that the various local rail networks covered by the programme would eventually be folded into more sophisticated multimodal transport networks covering no fewer than 27 urban areas outside Paris.
While not every city-region will have the same needs, the SERM programme called for local authorities to apply to the government to be granted formal ‘SERM status’, and since the summer of 2024 the projects in Tours, Toulouse, Strasbourg, Lyon and Bordeaux have all qualified. The aim with each city is to boost the regularity and frequency of local trains to act as the backbone of the network, while also enhancing integration across modes and delivering smart ticketing.
When specific legislation governing SERM was passed in December 2023, it enshrined metro project promoter Société du Grand Paris as the body responsible for co-ordinating the various SERM schemes; its name was then amended to Société des Grands Projets to reflect its nationwide remit.
The latest legislation proposes a clarification and streamlining of the role of SGP, with Tabarot suggesting it should be seen as ‘the wing of the state armed and ready to deliver SERM’. The project promoter would be able, following a request from the relevant local authorities, to provide its expertise to co-ordinate the project in question. In some cases, its scope might be expanded to take a full project management and delivery role, ‘where this would accelerate delivery and optimise the value of the investment’, the minister says.
Finally, measures are planned related to the funding of urban transport more generally. Tabarot laments the reduction in the proportion of fare revenue used in the financing of urban public transport. From 75% in 1975, this figure was projected to fall to 20% in 2025, he notes.
‘By comparison, this rate is 30% in Italy, 50% in Germany, and 60% in Switzerland.’ The proposed legislation would allow for indexing of fares to inflation, with a view to stabilising the share of revenue coming from users. However, Finance Minister Roland Lescure has rebuffed this idea, insisting that ‘users will not be asked to pay more. Public transport is subsidised, and that’s fine.’
Two other notable regulatory measures being put forward by the government are a clause allowing organising authorities to issue operating contracts to international providers to facilitate the delivery of more rail services in border regions, and a measure aimed at speeding up infrastructure project delivery. Known as RIIPM or raison impérative d’intérêt public majeur, this would seek to restrict access to judicial review for schemes deemed to be in the public interest once the formal go-ahead has been approved and works have started.
Turning point
There is no doubting Tabarot’s enthusiasm for the measures, which he believes could represent a ‘turning point for transport policy in France’. The bill, if approved, would ‘allow us to invest for today and for tomorrow’, he insists.
The government hopes that a decisive vote on the package will take place in the upper chamber, after which the bill would come before the Assemblée Nationale. In such an unstable political climate, the outcome of the legislative process remains hard to predict — and even if the members approve it, the risk of the legislation being gutted of some of its ambition remains considerable.