While the CNMC has approved the long-term agreements with the Ilsa consortium of Trenitalia and Air Nostrum, and Rielsfera, a subsidiary of French National Railways (SNCF), to operate services on three high-speed lines in Spain from December, it cut the length of agreement with Renfe from 10 to five years.

CNMC wants Adif AV to justify why Renfe should be given a 10-year contract. The CNMC says it was agreed that the framework agreements should be for five years, unless associated contracts, special investment and the level of risk incurred by companies justifies a longer term.

Conversely, CNMC says in view of the risk facing Ilsa and Rielsfera, 10-year contracts with these companies are fully justifiable. The two companies plan to acquire 23 and 14 trains respectively, and they will have to set up commercial and operational networks and develop a brand image in Spain, all of which will require considerable investment.

Not proven

In addition, CNMC says Renfe has not proven that it needs to add 49 trains to its fleet for the proposed services, especially as they represent only a slight increase in capacity compared with the timetable which Renfe normally operates on the three lines.

CNMC also points out that the technical characteristics of the new Renfe trains, which have gauge-changeable wheelsets and interoperable signalling systems, would allow Renfe to operate the trains on other lines in Spain or abroad, such as in France, which would be outside the framework agreement with Adif AV. Renfe has ordered the trains from Talgo in batches. CNMC says that the average age of Renfe’s current high-speed train fleet is 18 years which will limit its risk with a five-year framework contract compared with the two new operators.

The CNMC also points to the increased risks facing the new entrants as a result of the coronavirus pandemic, and says that this is bound to create uncertainty for their business plans, the availability of new trains on agreed dates, the signalling system to be used on the Madrid - Seville/Malaga line, and the approval of lines of credit to fund investment.

In a statement issued on April 7, Adif AV said it will examine CNMC’s resolution regarding the framework agreement to be signed with Renfe and prepare an adequate justification for its original decision to award a 10-year contract. Adif AV says it notes the CNMC’s endorsement of the criteria applied by Adif AV during the process of liberalising passenger rail services, in view of their objectivity and transparency, respecting at all times the principles of non-discrimination. In the meantime, Adif AV plans to sign the framework agreements with Ilsa and Rielsfera next week.

Services

The three companies will be able to operate services with effect from December 14 2020 along the following routes:

  • Madrid – Barcelona – French border (Corridor 1)
  • Madrid – Valencia/Alicante (Corridor 2), and
  • Madrid – Seville/Málaga (Corridor 3).

Three packages of services were offered on each corridor. Package A is the largest accounting for 70% of services and went to Renfe. Package B representing 20% of services was issued to Ilsa, and Package C accounting for the remaining 10% was awarded to Rielsfera.