French in secret talks to take over best BR lines

PARTS of the British Rail network could be run by SNCF, the French state-owned railway company, under proposals raised in secret talks with the Government.

Senior BR executives believe that SNCF will make a formal offer to run services on a prestige route; the recently modernised East Coast main line from London to Edinburgh is the most likely candidate.

SNCF's move is useful ammunition for John MacGregor, the Secretary of State for Transport. At this week's Conservative Party conference, he will attempt to revive the flagging BR privatisation programme and remove nagging doubts among backbenchers about the lack of progress. Despite the public collapse of talks with Richard Branson and the recent collapse of the CharterRail road-rail freight venture, Mr MacGregor is expected to make an upbeat presentation.

He will claim that the private sector has shown strong interest, and will invite tenders from any operator, anywhere in the world, for any part of BR.

But allowing SNCF to operate part of the network could cause tensions within the Cabinet because it would be totally contrary to the 'Lilley doctrine' on foreign investment. As Secretary of State for Trade and Industry, Peter Lilley refused to allow foreign state-owned organisations to acquire any British company because it would amount to 'back-door nationalisation'.

One senior BR official close to the sell-off talks told the Independent on Sunday that he expected SNCF to make a move for the East Coast main line or the West Coast main line from London to Glasgow. Of the two, he thought the East Coast, newly electrified at a cost of pounds 700m, was the more likely.

It is the nearest BR has to a high-speed line on the French TGV model, allowing trains to run from London to Edinburgh at an average speed of 99mph. Moreover, he pointed out, it is the 'crown jewel' of InterCity, which is the only important passenger rail network in the world to operate entirely free of subsidy. Its capacity to generate revenue is proven.

By contrast, the West Coast main line, which passes through Birmingham and Manchester, has not received any investment since the Sixties and urgently needs pounds 400m spent on the track and a further pounds 300m on new trains. Other important routes, such as those from Paddington in London to Wales and the West Country, would require electrification, a fundamental requirement of a modern railway system.

SNCF would be free to set its own fares, and could use modified versions of its high-speed trains, the TGVs, which run at up to 200mph. But, like any other operator, SNCF would have to fit in with the slots made available by the proposed track authority which would own the lines.

Last year, InterCity as a whole made a profit of only pounds 2m on turnover of pounds 900m, but this included heavy losses on some routes. The figures for the East Coast line are not available but would show much better returns.

With the Channel Tunnel now imminent, the French have been showing considerable interest in rail developments in Britain. Even before construction began in the late Eighties, SNCF and BR were embroiled in a row with Eurotunnel on the division of revenues from through trains from London to Paris.

Though a compromise was reached then, the industry viewed the dispute as an early indication of French determination to see the project through on their terms. SNCF is known to want to make as much revenue as possible from the tunnel while establishing Paris as the hub of a pan-European network.

SNCF has already been linked to plans for a new express rail-link from Paddington to Heathrow, but any French participation in running services on important parts of BR's network would be far more ambitious and, inevitably, would arouse fears of foreign takeover.

A Department of Transport spokesman confirmed the potential French involvement. 'There has been a lot of interest from SNCF,' he said.

In Paris, an SNCF spokesman said: 'It is perfectly possible that there will be joint ventures in the future between us and BR within the framework set by the EEC's Directive number 440 issued in July 1991.'