Tashkent, Uzbekistan (UzDaily.com) -- Experts from the Institute of Macroeconomic and Regional Research (IMRI) analyzed Spain’s experience in reforming the railway sector.

Until 2005, Spain’s railways were managed by the monopoly state company RENFE.

At that time, a number of structural problems had accumulated in the railway system, such as: lack of competition and low management efficiency, lack of investment in the industry, poor compliance with safety standards and others.

In connection with the above problems, in 2005 it was decided to launch a reform to liberalize the railway sector, during which RENFE was divided into 2 organizations: ADIF was responsible for the construction of new and maintenance of existing infrastructure, and RENFE-Operadora was engaged in the provision of transport services. The key to the success of the reform was a clear division of functions and responsibilities between the two management companies.

As a result of the reforms, a competitive environment was created in the transport services market with monopoly control of infrastructure facilities: ADIF retained monopoly management of infrastructure. In turn, operators were given equal rights to access the infrastructure and the ability to use it. In order to create a competitive environment, RENFE-Operadora was divided into 4 companies (Renfe Viajeros, Renfe Mercancías, Renfe Alquiler de Material Ferroviario and Renfe Fabricación y Mantenimiento).

In Spain’s model of vertical division of activities, in which infrastructure is a state monopoly, an important function of ADIF is to ensure that operators have access to the infrastructure in a transparent manner. To do this, operators must pay an ADIF fee, which in Spain is considered a tax and is determined annually in the general state budget. Access fees are established to recover costs directly associated with the operation of railway transport.

In 2022, Spain launched a reform to liberalize high-speed highways. Until 2021, Spain had only one high-speed rail operator in the country. Currently there are 3 companies operating on the market (Renfe, Ouigo España, Iryo).

The invitation of private operators led to a reduction in fares and an increase in the number of trains on the lines. For example, in response to Iryo’s low prices (from 18 euros), Renfe launched its own low-cost airline Renfe Avlo. Moreover, according to the Minister of Transport, as a result of the functioning of private operators in the market, the number of trains on the Madrid-Barcelona, Madrid-Valencia and Madrid-South routes is expected to double. The process of expanding the geography of high-speed trains also continues. For example, it is planned to launch a new route to Seville.

Thus, lower prices and increased competition contributed to achieving a positive effect. Specifically, 310,000 passengers traveled by rail between Madrid and Barcelona in August 2022, up from 265,000 in August 2019.

Anton Kostyuchenko,

IMRI project manager

Odiljon Nazarov,

leading researcher at IMRI