Public Service, EU says yes to Sncm

Genoa - The European Union supports the economic value of Sncm, allowing it to maintain the public service contract between France and Corsica in the event of a sale. But unions are equally alarmed, as the contract may be divided into lots, that is line by line, making the breakup of the company feasible. The announcement of the European Commission’s decision was made by the new undersecretary of Transportation to the French government, Alain Vidalies, who recently took over from Frédéric Cuvillier. “After several exchanges of information with the European Commission,” Vidalies said, “it is now certain that the transfer of the public service (DSP) is possible from the moment it is divided into several parts. The administrators have just published the tender which contains the possibility of resuming the DSP in accordance with the agreement reached with the European Commission.” For their part, the leaders of Sncm have commented on the news saying, “We are on the right track.”

The funding for the public service between France and Corsica has remained one of the few attractions for Sncm, since the company was put into administration by the Commercial Court of Marseille, on 28th November. The goal is to find a buyer, but the conditions of purchase are not favourable: time is short, there is only enough money in the bank to cover expenses until next January; the fleet is outdated; the company has accumulated debts of several million euro (around 200 million) and has had a budget surplus in only one year since 2001; The European Commission has ruled that about €400 million in state aid granted at the time of privatization must be returned, and the rest as a contribution to the performance of the service by the autonomous region of Corsica. Particularly on this last point, France hopes to challenge the European decision, that has so far kept away potential buyers, that otherwise would not miss this opportunity. If the European Union had decided that the sale of the company required the tender of the DSP service as well, the possibility of selling would completely disappear.

Now, however, any buyer of the company or part of it will also get the contract that was renewed in September 2013 for a period of ten years. But the words of Vidalies have not reassured the unions completely, which are engaged in a battle for the survival of the former national carrier. The fact that the DSP can be divided by lots is seen as a threat to the future integrity of Sncm. The union CFE-CGC, which represents the leaders of the shipping company, have shown concern over a document in which the company explained to the press the details of the tender. The document specified that “the deals may cover one or more sea connections (among those currently operated by SNCM, ed.), but must be presented line by line and should not be indivisible.” Bids must be submitted by 19th January 2015. In 2000, Sncm ran 50% of the passenger traffic between France and Corsica, by 2013 this proportion had fallen to 25%. Meanwhile the main competitor, Corsica Ferries, accused by some French MPs of unfair competition, has grown from 45 to 65%.