Spain’s rail industry set to take a new route next year

The government announced on Friday a shakeup in Spain’s money-losing rail industry by opening the sector to private competitors and eliminating the state-owned Feve, which operates service in the northern regions.

Following a Cabinet meeting, Public Works Minister Ana Pastor said that certain short- and medium-distance routes operated by Renfe will be closed because they are “neither economically or socially profitable.”

Beginning on July 31, 2013, Spain’s rail industry, which is managed by the state-holding Administrator of Railroad Infrastructure (Adif), will be opened to competition from private operators, Pastor said.

The government believes that current railway service is “outdated” and “needs to adapt to reality,” she said. Pastor said that currently there are 52 medium-distance regional trains that travel with 15-percent passenger capacity on average. There are 176 train stations and stops across the country that only average one passenger a day. “We have AVE rails already prepared so that a train can pass every five minutes on routes where trains now pass one every half hour,” she said.

By inviting private competition, the government hopes to save some 2.5 billion euros annually that it now allots to the sector. Companies that are interested in becoming operators after next July will be able to rent “surplus” trains and locomotives from Renfe.

Renfe will remain as the public operator of the Spanish rail system, but will be divided into four companies that will be dedicated to providing passenger service, heavy transport and logistics, maintenance and railcar manufacturing, and rentals.

Feve, which operates routes in Cantabria, León, Galicia and Bilbao, will be closed in January. Renfe will now assume those services.