2023-05-30 02:04:01
The liberalization of high-speed rail has allowed a Price reduction which has resulted in a more than notable increase in travelers. In the first quarter of the year, the users of these services increased by almost 30%, according to data from Adif, the owner of the railway infrastructures. The National Commission for Markets and Competition (CNMC) He points out in his report on the sector for the same period that in some corridors the rise has been more than notable. Thus, he has consigned increases of 119% in Madrid-Valencia, 57% in Madrid-Barcelona and 20% in Madrid-Alicante. But these increases, despite being not insignificant, may not be enough for the operators to balance their accounts. This has been revealed by Renfe, iryo and Ouigo. First, in the report “Consult the representatives of the users of rail freight and passenger transport services 2023” recently also published by the CNMC. And just yesterday in a conference organized by Competition to take stock of the railway liberalization.
In the consultation carried out with the representatives of the rail passenger companies, the operators consider that the competition is generating a drop in prices. Between January and March, the cost of tickets was reduced by up to 23% in the case of the Madrid-Valencia and Madrid-Barcelona corridors, as well as 6% in Madrid-Málaga, according to the CNMC sector report. However, the companies warn in the analysis in which they were consulted that this fall in prices, together with the increases in costs, “can, if demand does not grow sufficiently, cause significant economic imbalances for all operators.”
He energy price and royalties -the tolls paid to Adif for using the rail network- are the two big ones pointed out by the companies as responsible for the increases in their costs. According to the report, the operators consider that in the context of the energy crisis derived from the war in Ukraine “the rail passenger transport sector has been discriminated against in relation to other sectors, limiting its competitiveness and the potential of becoming a backbone of sustainable mobility, for being excluded from initiatives within the EU recovery funds and for not having been a beneficiary of aid for high energy prices, unlike road transport”. Renfe, for example, closed 2022 with an additional cost for this concept of 133 million euros. To compensate for this increase in expenses, and as a large energy-consuming industry, both the public company and Ouigo and iryo demand that rail passenger transport be given a status similar to electro-intensive, which would allow them to access aid. In addition, as he stated yesterday at the CNMC conference
Regarding the royaltiesthey consider it to be “necessary and urgent” to review the model. An operator has assured the CNMC that “technical studies must be carried out that incorporate the parameters that adequately measure the wear caused by each circulation to calculate the eligible costs. Another indicates that “the non-eligible costs that are passed on through the Addition to Modality B of the fee irreversibly weighs down the operators that place greater capacity on the market at attractive prices”. This toll is paid as compensation for situations of congestion in some infrastructures and is calculated according to the spaces/kilometer offered, regardless of whether the trains are busy or running.
On this point, there are certain discrepancies with Adif. Its president, María Luisa Domínguez, assured yesterday that “it cannot be said that our royalty levels are high”. To support his statement, Domínguez assured that in the Madrid-Barcelona relationship the fees are similar to those of Germany and below those of France. And in Madrid-Seville, they are below the Italians. However, he has assured that they are working on a new system for these tolls that is good for the operators now that these fees have ceased to depend on the State Budget and are going to be managed by Adif.
The conjunction of the increase in the price of energy as well as the cost of royalties has led them to represent between 50% and 70% of company expenses, which as the CEO of iryo, Simone Gorini, stated yesterday, is “clearly unsustainable” for the business. And less, in a context of low prices. “The passenger growth curve is now much flatter and it has occurred after a 23% drop in prices that is added to the previous 40%. Is this going to be sustainable over time?”, asked the general director from iryo, Helene Valenzuela. From Renfe, the general director of travelers, Sonia Araujo, assured that “competition has transferred the pressure to the price and we must find the point that does not make the process and the operators fail”.
The energy crisis has not only contributed to increasing the costs of the operators but also constitutes, from the point of view of the companies, one of the factors that can hinder the growth of users who need it due to its effects on inflation. The companies also point out as risks the long time required for the commissioning of a new fleet -the approval of rolling stock on a route can take several months- and commitments regarding the date of entry of some new infrastructures or the updating of these.
It also poses a potential threat to the future operations of companies availability of drivers. Or, rather, its lack of availability. The operators have assured the Competition that basic training (license) is expensive -around 20,000 euros- and the available places are limited. For this reason, they consider it necessary to encourage an educational offer that ensures the availability of qualified professionals.
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