Guillaume Pepy doesn’t look like a man in a hurry. An elegant 47-year-old Frenchman with impeccable manners, he doesn’t look like an archetypal railwayman either, which may be because he isn’t. It’s true that he’s an énarque, a graduate of France’s elite Ecole Nationale d’Administration, but he’s also been both a judge and a market-research expert with Taylor Nelson Sofres in France and America, which hardly sounds like suitable qualifications to run La Société Nationale des Chemins de Fer. Yet as chief executive of SNCF, which runs France’s pride and joy, Les Trains à Grande Vitesse, he can claim to be Europe’s most powerful and successful rail boss. Oh, and he’s also chairman of Eurostar, which runs the trains under the Channel.
This week he’s been in a terrible hurry. Somewhere along the TGV line between Lorraine and Champagne, one of his trains has been trying to cover a 10km stretch of line at a speed of 560kph. That’s 350mph in real money, or more than half the cruising speed of a commercial airliner. True, it’s downhill all the way, with champagne at the end, but since the existing world record was 320mph, it was bound to cause a stir.
Pepy’s eyes light up at the thought. The TGV, he says, is not merely a means to go from A to B at high speed; it’s a destination in itself. Instead of a night on the town, try a day on the train. Before you decide this is daft, or an ultimate expression of the belief that it’s better to travel hopefully than to arrive, consider what he’s done. SNCF is profitable, and not merely in the way that British train-operating companies are because they’re paid to run a franchise, or the way that Network Rail can claim a sort of profit-before-subsidies, but in actually earning a commercial return. Moreover, he’s made railways sexy to the French middle classes.
The TGV, he says, is one of France’s leading brands. ‘It’s a customer good. Think of it: Danone, Pepsi, Nike, TGV… Students might buy a DVD, download more music, or buy a ticket for the train. I want to see TGV tickets in bubble packs in supermarkets, so people can buy themselves little treats.’
Astonishingly to British eyes, the strategy seems to be working. The average load factor across the TGV network is 73 per cent, which means three-quarters of all seats on all 680 daily trains are occupied. Six months ago, the line from Paris to St Malo opened: visitors to the town in faraway Brittany are up by a third. ‘The mayor is ecstatic,’ says Pepy. Even more astonishing to British eyes are the fares. This new line can cost just E25 each way, or about £35 return. You can go from Paris to Marseille for £17. These fares may sometimes have the Ryanair approach to availability — sold out before you’ve had time to log on — but the highest fare is £87, first class, and if you miss the 8.20 a.m. there’s another train half an hour later.
No wonder the TGV has been dubbed France’s low-cost airline. It uses a low-cost- airline price model, with seat prices rising as the date of departure nears, at a speed dictated by the number of bookings and previous experience on the route. As easyJet and Ryanair have proved, it’s a great way to maximise revenue and occupancy rates, and the computer can learn as it goes along. But, unlike an airline, the TGV really can claim to be green, since it runs on nuclear-generated electricity. The SNCF website invites users to look at its ‘eco-comparator’ to see how much less CO2 they’ll produce travelling by train instead of flying. In four months, the site has clocked 1.3 million hits. Air France is threatening legal action.
As far as I can see, there is no financial fiddling to square this circle of cheap fares, fast trains and real profits. SNCF makes money: E1.3 billion on sales of E22 billion last year. The TGV pays 30 per cent of its turnover to the track owner — effectively the French state — but Pepy is adamant that this is sufficient to service the debts incurred in building such expensive infrastructure. A typical model for a new line involves the track authority paying four fifths of the capital cost — the maximum investment it believes will earn a commercial return — with the regional authority underwriting the rest, in anticipation of improved revenues when the trains arrive. As the St Malo example shows, it seems to work. ‘Opinion polls show that the locals would prefer a new line to either an upgraded airport or a new autoroute,’ he says.
Like the business he runs, Pepy has come a long way. ‘My CV is a catastrophe,’ he giggles, although he hardly means it in the way you’d expect. He’s slightly embarrassed at the énarque label, since we Brits are convinced ENA graduates carve up the best jobs between them, seamlessly rotating from state to private enterprise. ‘It can open doors for your first job,’ he admits, ‘but after two or three years, nobody cares. It’s what you bring to the market that counts. I’ve never felt like an énarque — there’s a life before and a life after. My mother was a secretary, so I wasn’t born with une cuillière in my mouth.’
This lack of a silver spoon, and his experience at Taylor Nelson Sofres, drives him on. ‘I’m critical because the railways are not close enough to their customers. I spend two days a week travelling incognito on the TGV. If I’m recognised, I change destination. One day I was going to Messe, and people were waiting, so I took the train to Nancy instead. It helps to bring new thinking. First and second class is a heritage of the past, so we’ve created a second brand, iDTGV, with Zen and Zap zones. One day you can think and watch the landscape in calm and quiet [in Zen], and another you can play with the children and make noise, so you travel in Zap class.
‘The thinking was: if we were a competitor, we’d differentiate, so let’s act like one. Rail is an old industry, and while production and safety are important, it needs new thinking. We’re spending E20 million on research to allow you internet access at 320kph, even through tunnels. People will expect it.’
Short of headhunting him to run Network Rail, what can we learn for our own railway system? Last month Pepy delivered the Sir Robert Reid lecture to the massed anoraks of the Institute for Logistics and Transport. His map of Europe’s high-speed network shows Britain at the edge of Europe, with the stubby little Channel Tunnel Rail Link as our only contribution. The time contours show that by 2020 it will be quicker to get from London to Lyon than to anywhere in Scotland north of Edinburgh.
It’s hardly surprising that there’s no possibility of a new, dedicated high-speed line in Britain. There’s so much more room in France, the major towns are widely spread, people welcome new railways, and if your house is in the way, the compulsory-purchase mechanism is ruthless — but you do get compensation of more than twice market value to ease the pain. We’re useless at grands projets, as the endless dithering over Crossrail demonstrates. The rate of financial return on the CTRL is miserable, but at least it’s more use than the Dome.
It’s of little comfort to British rail travellers, but at least our rail operators can see opportunities across the Channel. From 2010 the TGV track will be open, in theory, to all-comers, and several British companies are looking hard. Meanwhile, SNCF is in the GoVia group here, and is a junior partner bidding for Midland Mainline.
Alas, even Pepy-ed up we’ll never see the sort of speeds that are going to become commonplace on the Continent, if only because our existing lines couldn’t cope even if all the traffic was cleared for m
iles ahead. Would it all be different if Monsieur Pepy were in charge here? Alas, I rather doubt it. We’re just too slow.
Neil Collins is a columnist for the London Evening Standard.
This article first appeared in the print edition of The Spectator magazine, dated April 7, 2007