This opinion piece explains the gradual opening of France’s passenger rail market to competition, emphasizing the role of the independent regulator ART in ensuring fairness and transparency.
Opening up passenger rail transport to competition is a slow but progressive process in France. The current legal framework for French PSO services – which consist mainly of regional services (called TER) and territorial balance trains (TET) – was established by a law of 27 June 2018 called ‘the New Rail Pact,’ which established the principle of opening up domestic passenger rail transport to competition. For PSO services this means that competitive tendering is the rule (Transport Code, art. L.2121-15).
A gradual timetable for opening up to competition with a transition period
The French legislator defined a special timetable for PSO services. The competitive tendering rules for the market came into force on 3 December 2019 in accordance with the EU Regulation. However, there was a transitional period until 25 December 2023, during which for services of national interest the transport organising authorities (PTAs), regions or the state, were able, by way of a derogation from the competitive tendering rules, to directly award a public service contract with the incumbent operator, SNCF Voyageurs, for a maximum period of 10 years. As a result, PTAs in France had much discretion, since they could choose to organise a competitive tender to renew all or some of their contracted services, which some such as the Sud region have done, or else postpone the competitive tender until 2033, as the Bretagne region has done. This means that all conventional rail transport will only have been put out to tender by 25 December 2033. It should also be pointed out that a dedicated timetable has been set up for the Ile de France region (Transport Code art. L.1241-7-1), which does not really seem compatible with the PSO regulations, as it postpones opening up to competition even further.
Under these conditions, it is imperative to establish progressive tendering calendars coordinated between regions, as they need to maximise the number of respondents by continually mobilising applicants.
In addition, all the exceptions recognised in EU PSO Regulation 1370/2007 have been incorporated in French law, so that public service contracts can still be awarded directly in six circumstances.1 However, we do not think that these exceptions are likely to be widely used in the French context.2
The key role of the independent regulator ‘ART’ in the effectiveness of competition
As recognising a competitive procedure is not enough to make calls for tenders effective, the French legislator has established ‘ART,’ a strong independent regulatory authority with broad legal and soft powers to monitor the process of opening up to competition, particularly in PSO services. This is especially the case regarding the major challenge of access to information and the objective of reducing the information asymmetry between the incumbent operator and newcomers. It is also a
challenge for PTAs when they prepare the tender process and draft concession contracts. In this regard, a legislative obligation has been established for railway companies providing public passenger rail transport services, infrastructure managers and service facility operators to transmit information relating to the organisation or execution of PSO services.3 ART has significant ex post powers in this respect (dispute settlement, sanctioning) and has already used them to bring about changes in behaviour and to move towards greater transparency.4 Nevertheless, there is still room for improvement and the regulatory framework for access to data undoubtedly needs to be clarified.
More generally, this process requires a strong regulator. This is clearly the case of ART, which also uses soft law and sunshine regulation to monitor competition, to guarantee non-discriminatory access to the rail network and to strengthen the conditions of equity and equal opportunities for all stakeholders.
Although the process of tendering is underway in France, the players involved and some regions in particular need to become even more proactive in order to take advantage of the opportunities available to them in this area.
This opinion piece by Aurore Laget-Annamayer, Full professor of public law at Paris Dauphine-PSL University, originally appeared in the European Transport Regulation Observer, “Tendering railway public service obligation contracts: a balance sheet” (January 2025).
