A report submitted to French authorities details the structural shortcomings of Alstom and the "siloed" organization of SNCF, highlighting the causes behind worsening railway delivery delays. Between industrial failures and unrealistic political demands, delivering a train now takes up to 12 years.
This is a report that could make waves. Submitted at the end of the year to the DGITM (General Directorate for Infrastructure, Transport and the Sea) and the DGE (General Directorate for Enterprises), the document seeks to identify those responsible for train delivery delays in France.
Revealed by our colleagues at VRT (www.ville-rail-transports.com), this report, described as "scathing" by the site, appears to pinpoint the responsibilities of both Alstom and SNCF.
"This report assigns major responsibility to Alstom, highlighting serious weaknesses in its supply chain management, organization, and overall leadership, despite the continuous acquisition of new contracts," explains Louis Billon, who covers the issue for AlphaValue. SNCF, for its part, is also criticized for operating in silos and for the excessive complexity of its technical specifications.
Specifically, "the report underscores the role of the State, transport authorities, and political decision-makers in creating unrealistic timelines and increasingly complex requirements. As a result, the delivery time for a new train has reached between 8 and 12 years, while costs have risen significantly," AlphaValue adds.
Nevertheless, the broker offers an encouraging conclusion, suggesting that even though Alstom is identified as the main party at fault, the report represents "a positive development."
According to AlphaValue, Alstom should continue to secure orders due to the very limited competition in the French market and the complexity of requirements, along with years of lobbying.
"More importantly, this report could help drive change in French regulations and approval procedures, which should enable Alstom to deliver trains more quickly. The expected regulatory and organizational improvements could materialize over the next three years," the firm concludes.
Contacted by Zonebourse, Alstom indicated it is ready to review the final report in full.
"We welcome the publication of such a report. We are confident that the initial ambition—to shed light on the reality of complex projects and support essential reforms for their proper execution in the collective interest—will help fuel the search for sustainable and effective solutions, to the benefit of all and above all users," the group stated.
In early afternoon trading, the stock was down nearly 0.7% on the Paris Stock Exchange.
Alstom is one of the world leading manufacturers of infrastructures for rail transport sector. Net sales break down by family of products and services as follows:
- rolling stocks (51.1%): trains, tramways and locomotives;
- railway services (24.3%): maintenance, modernization, management of spare parts, support and technical assistance services;
- signaling, information and control systems (14.3%);
- railway infrastructures (10.3%): infrastructures for the track laying, lines electrical power systems, electromechanical equipment, telecommunication devices and traveler information in station, terminals for automatic purchase of tickets, access to escalators, lifts for disabled, automatic landing doors on platforms, ventilation, air conditioning and lighting systems).
Net sales are distributed geographically as follows: France (17.1%), Europe (39.6%), Americas (19.8%), Asia/Pacific (14.5%) and Middle East/Africa/Central Asia (9%).
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