The French Cour des comptes’s rail transport audits: helping the rail system to adapt
When it comes to high-speed rail many Europeans had their first fast rail experience in the TGV — the Train Grande Vitesse. Since the 1980’s France has been the pioneer in this transport mode. And since a lot of public money, and particularly French public money is involved, so is the French Court of Audit, the Cour des comptes française, assessing also performance and impact of the French railway system in general and the TGV in particular. André Le Mer, conseiller maître in the Cour des comptes, has been in charge of many audits in this area. He explains below about the questions raised, the approach used and impact of the work he and his colleagues undertook in this area.
By André Le Mer, Cour des comptes française
Various issues at stake
The French Court of Audit, the Cour des comptes française, is pursuing a multiannual audit strategy of reviewing the various components of rail transport in France. The report we published in 2014 on high-speed rail -High-speed rail: a model extended beyond its relevance — marked a turning point here, as it challenged an economic model that was too focused on large-scale projects to the detriment of ‘ordinary trains.’ We try to answer questions about rail-transport issues that are both simple and complex: how can the performance of the French railway system be improved while reducing the cost to taxpayers? Each of our audits enables us to deepen our methods of investigation and analysis through regular exchanges of experience with our colleagues at the ECA.
Rail transport is an important audit topic for the French Cour des comptes because the issues at stake are very varied: performance and service quality; economic, social and industrial aspects, and massive financial and budgetary commitments for taxpayers. Each year, France allocates almost € 14 billion to its railway system in the form of various contributions.
A multi-annual audit strategy
The French Cour des comptes pursues a multiannual strategy that is based on audits of France’s major public transport companies (SNCF, the national rail carrier, and Paris’s RATP urban network) and on thematic surveys covering entire sectors of the railway business. We have focused on rail passenger transport in particular, as this area will be opened up to competition in France at the end of 2019.
In 2013–2014, we therefore audited the high-speed transport (TGV) network and the network of conventional intercity trains. In 2016, we examined the rail-transport network of the Ile-de-France region and SNCF’s freight business, and since 2018, we have been investigating the regional express transport (TER) network, as well as carrying out a performance audit of RATP’s transport services in Paris.
Since 2011, we have also carried out several audits of the management of the French rail network and of companies responsible for major infrastructure projects. In 2017, we audited the Société du Grand Paris, which manages the Grand Paris Express automatic metro project, and in 2018–2019 we are auditing TELT, the company responsible for the Franco-Italian rail tunnel project between Lyon and Turin.
The 2014 high-speed rail audit: a two-year investigation
In In 2013–2014, we examined one of France’s grands projets: its high-speed rail network, which has developed very rapidly since the first high-speed rail (HSR) line was opened between Paris and Lyon in the early 1980s.
The audit consisted primarily of sending detailed questionnaires to stakeholders (the State, SNCF and RFF, the body responsible for managing the rail network), examining public and non-public documents (minutes of management board meetings and statements of inter-ministerial decisions), and field trips. Two HSR projects were given particular attention: the Sud-Europe Atlantique (Southern Europe Atlantic) project and the Poitiers-Limoges HSR project. We also interviewed a large number of managers from the companies concerned, as well as officials from French ministries and the European Commission (DG Move).
Our audit lasted two years. After a thorough feasibility and framework study, we created a major documentary database that included benchmarks, statistical data (from the Ministry of Transport, Eurostat, INSEE and SNCF, as well as raw national transport-survey data) and academic studies.
The audit findings: the economic limits of a major industrial success
Our report yielded three main findings. The first confirmed that the HSR network has been developed to the detriment of the conventional rail network. A previous audit from the Cour des comptes back in 2012 had already sounded the alarm about the lack of financial resources for maintaining the conventional network, and several technical audits carried out by Swiss experts had drawn attention to the worrying state of the French network.
The second finding was that the decision-making process for creating new high-speed lines was almost always biased in favour of building them. The political decision to launch a project all too often preceded socio-economic impact studies, which were often unduly optimistic. The State’s shortage of resources also meant that it had to seek funding from local authorities, and led it to make disproportionate commitments about a line’s route or number of connections, thereby undermining the future profitability of the lines concerned.
The third finding was that the TGV network was progressively less cost-effective. The French rail model allows TGVs to leave the high-speed network in order to run at much lower speeds on the conventional network. ‘Ordinary’ trains, by contrast, cannot switch to the TGV network. To satisfy the requests from many towns for a high-speed service, TGV services were therefore extended far beyond the HSR network. The upshot was that the TGV network, with 230 destinations in France, was overstretched and became unprofitable. At the same time, the conventional intercity network, which was cheaper in principle, began to shrink and its rolling stock to decline.
In short, TGV services were becoming less profitable and the cost of the HSR system was in danger of no longer being publicly sustainable, while resources to renovate the conventional network were also lacking. The rail network manager RFF (which became SNCF Réseau in 2015) sought to resolve this conundrum by incurring ever greater debts (€ 45.2 billion at the end of 2017).
Our report elicited considerable public reaction in 2014, including sharp criticism from politicians and user associations, who regarded our findings as questioning one of France’s major industrial achievements and its policy of guaranteeing equal access to the HSR network. Nevertheless, four years on, we now see that our findings are broadly shared. The French government has thus declared that no new high-speed lines will be launched and that the financial priority is now to renovate existing networks.
Progressively more sophisticated investigation methods
The development of our rail audits has meant that we have had to adapt our methods. Our audits have evolved from traditional audits of organisations to performance audits with a focus on analysing effectiveness and efficiency. Accordingly, we have just produced an analysis of the economic and financial model of SNCF Réseau and are currently carrying out a performance audit of Paris’s RATP urban network.
First of all, we are striving to improve the preparation and planning of our audits and we are frequently also involving the regional chambers of the French Cour des comptes, responsible for auditing local and regional authorities. Our work also entails making international comparisons, which are very useful in the area of transport. For our ongoing audit of the TER network, we have visited Sweden, Germany and Switzerland to seek comparable data.
Our investigations now take place more often on the ground, and involve meeting staff where they are actually working, e.g. at night-time maintenance sites and signal boxes for our audit of SNCF Réseau. We also often work with samples, e.g. as part of our current RATP audit, where we have chosen to study certain bus and metro lines.
Lastly, we are aware of our limitations. So increasingly we call upon outside experts, e.g. to evaluate information systems.
A close relationship with our ECA colleagues and greater dialogue with other European SAIs
The publication of our HSR audit provided an opportunity to deepen our relationship with our colleagues at the ECA. We came to Luxembourg in October 2014 to present our report, and the resulting exchange of views was very much appreciated by all parties. Dialogue between our respective institutions is already frequent: our top managers meet once or twice a year, and our transport specialists also now meet on a regular basis to discuss planning, and their respective approaches and methods. An example was the recent meeting we had in Paris in January 2019.
This dialogue is all the more fruitful for being informal and very pragmatic. Auditors of the Cour des comptes and the ECA were therefore able to discuss HSR matters together in 2017 when the ECA launched a performance audit of Europe’s HSR network, culminating in its special report 19/2018 report A European high-speed rail, network: not a reality but an ineffective patchwork. An auditor of the French Cour des comptes was particularly pleased to be able to take part in the ECA’s related audit missions in France as an observer. The ECA’s experience of performance audits in the area of transport also serves as an incentive for us to develop our own audits in the field.
Such exchanges are particularly useful in areas such as major cross-border projects that are implemented jointly by several Member States. Here, the ECA has a unique overview, by virtue auditing EU financing and its impact. However, it is in this very area of major international projects — where the funding at stake is significant — that we have noted the constant danger of a ‘blind spot’ between national Supreme Audit Institutions (SAIs). The fact that, legally speaking, SAIs have only partial jurisdiction over transnational projects means that their audit work needs to be coordinated in order to obtain a comprehensive view of any given project. It is surely in this area that cooperation between national SAIs — and, if EU funding is involved, possibly also with the ECA — will have to progress in the future.
This article was first published on the January-February 2019 issue of the ECA Journal. The contents of the interviews and the articles are the sole responsibility of the interviewees and authors and do not necessarily reflect the opinion of the European Court of Auditors.