Spain’s Transport Minister: Current market opening model “benefits anything but free competition”

Spain is portrayed by some as an example of the benefits of passenger rail opening in Europe, with passenger ridership on the high-speed network having grown since the entry of the competing state-owned or state-backed operators.

However, Spain’s new centre-left Transport Minister Óscar Puente recently said in parliament that this liberalisation model – in which only state incumbents compete with each other – has “damaging effects” because their losses will “have the cushion of the state to cover them”.

Mr Puente’s remarks confirm that the liberalisation model in Spain is not sustainable. There must be a better solution.

How did this happen?

Several years ago, the infrastructure manager ADIF devised a system of ‘market opening’ where operators had to bid for large, inflexible packages and bring their own rolling stock within a comparatively short time frame.

In effect, this opened the market only for those operators with large amounts of state-backed funding, for example, to finance the rolling stock.

The result: the only new competitors to Renfe are operators owned or controlled by the French and Italian state-owned rail incumbents SNCF and FS.

Spain’s transport minister Óscar Puente stated that while this model had brought “a significant reduction in ticket prices” it had also caused “damaging effects.”

“These companies in the end make (financial) losses based on taking decisions … but then these losses have the cushion of the state to cover them. This is something that, I believe, benefits anything but free competition”. 

ALLRAIL agrees with Mr Puente. They believe that Spain’s market opening is financed by:

• French and Italian implicit state guarantees on the debt of their state-owned operators, as acknowledged by rating agencies in public.
• French and Italian taxpayers covering the deficits of their incumbents’ subsidiaries in Spain – which qualifies as State Aid.

ALLRAIL’s Spain spokesperson Marc Planas Blanco says: “We call for a better solution in Spain, that creates the market conditions to attract passengers and private investment while reducing the burden on the taxpayer. 

Such as: smaller, more demand-responsive packages and the same non-discriminatory access to loans from the European Investment Bank as Renfe and FS have received. Otherwise, it is certainly not a role model for the rest of the EU.”