The Railway sector in Spain is under deep transformation. The European Commission 4th Railway Package is a set of legislative texts designed to complete the single market for Rail services. It aims to foster European’s rail network integration; improve infrastructure governance; and liberalize rail commercial services to facilitate the emergence of new players.
Spain, which counts on modern infrastructures and new ongoing projects, is developing a new model for a sector under liberalization, which will require a stable and consistent legislation to facilitate large investments from both public and private sectors.
The year 2020 is the horizon for the private sector to start operating in a field with an omnipresent public administration. That will require new private agents willing to accept the new challenges and profit from the different opportunities offered by the market.
Market in numbers
Spain is an important market within Europe as the national rail network surpasses 15’400 km. In 2016, 32 million travellers used the long distance and high-speed network, 31 million used the medium distance network and 804 million used commuter trains.
Spain has traditionally prioritized the transport of goods by road, that is the reason why the ratio of goods transported by rail represents only 5% (26’618 tn in 2016), quite a low figure compared to the 18.9% of the EU27. The future might change, as rail transport accounts for 27% of the investments made in transport means in 2016.
On the other hand, the 70 existing manufacturers produced rolling stock and equipment for a value of almost €3’000 million at the end of 2017, all with a total direct workforce of more than 10’000 people.
Spanish exports of railway products (both rolling stock and railway equipment) grew to almost €1’423 million in 2017, while imports reached €226 million. The main clients for Spain fluctuate every year, as the top buyers usually depend on rolling stock purchases in large tenders. For 2017, the top five countries buying to Spain were Saudi Arabia (€225 M), Mexico (€174 M), Germany (€138 M), Chile (€110 M) and United Kingdom (€101 M). On the other hand, the main sources for imports were Germany (€71 M), Austria (€25 M), France and China (€ 22 M). Switzerland ranks 9th as Spain’s supplier with €5.79 M in 2017 (€43 M in the last five years).
Business opportunities for Swiss companies
Adaptation to the new model: service companies and manufacturers
The liberalization of the sector and the consequent increase of competition will bring new opportunities. New service companies will arise in order to exploit the existing rail network for a growing demand. At the same time, these companies will need important investments to acquire the necessary rolling stock or to rent it from third players. Therefore, the demand for both rolling stock and equipment is expected to boost in the coming years.
Export of goods: Public Tenders
Even if the Spanish trade balance in this sector arises a surplus of more than 6 euros in exports for every euro in imports, public tenders for large orders offer Swiss companies an opportunity to enter the market. In fact, foreign companies settled in Spain, Swiss included, already won important contracts to provide rolling stock and equipment. In addition, manufacturers located in Spain often rely on foreign companies for the provision of technologies and equipment, as for example, CAF, ALSTOM, SIEMENS, TALGO, RENFE, STADLER RAIL (Swiss) and BOMBARDIER.
Digitization and Consumer focus
The sector is willing to apply new technologies like Artificial Intelligence and Blockchain to emerging business models, also the use of APIs (Application Programming Interface). Service companies are paying special attention to business models where users are the centre of the focus.
This brings an opportunity to innovative or experienced companies that could offer an added valued to national companies.
- Ministry of Infrastructure: Rail sector legislation, public tenders, news, etc. http://www.fomento.gob.es/MFOM/LANG_CASTELLANO/DIRECCIONES_GENERALES/FERROCARRILES/
- MAFEX (Spanish Railway Association) www.mafex.es
- Spanish Transport Association (AET): http://www.aetransporte.org/
- Railway Observatory Report (ES): https://www.fomento.gob.es/NR/rdonlyres/45E675F8-076F-4471-8346-2410116206CC/147879/Informe_OFE2016.pdf
- State Railway Safety Agency (AESF) http://www.seguridadferroviaria.es/
- Association of Railway Private Enterprises (AEFP) http://aefp.es
- Administrator of Railway Infrastructures (ADIF) http://www.adif.es/en_US/index.shtml
If you would like to further evaluate the opportunities related to the Spanish railway sector without any further obligations, please get in touch with our S-GE Senior Consultant for Southern Europe Beat Kuster. Contact now