Spain, 2nd High Speed World Power, Can’t Sell Its Trains

High speed AVE trainsHigh speed AVE trains
Excepting the high speed trains involving the so famous La Meca- Medina contract in Arabia Saudi,  and despite authorities and the industry itself have been trying for decades, Spain has been unable to sign even a single high-speed sales operation. This is not, however, the official discourse of any of them.
In no other sector the sensation of triumphalism is so tangible. They not only point insistently that Spain has the world second largest high-speed network (3,240 kms), but also want to pass on the message that “some of the international projects in the high-speed industry bear the Spain brand stamp.”
This is an unsubstantiated affirmation since Spain has only managed to sign one contract for the construction of a high-speed line and the sale of trains of this kind (35 Talgos of 350 SRO model that will need to be operated and maintained for 12 years), which, as we all know, was achieved because of very specific reasons. If not for those, the contract would have surely been awarded to both French manufacturer Alstom and railway operator SCNF.
One of the markets where Spanish companies, especially Talgo, have been working in order to gain ground is the US, which is starting to develop a high-speed scheme, but with few tangible results. Renfe bid for the high-speed corridor of California between San Francisco and Los Angeles, an infrastructure which is under construction with the participation of Spanish firms such as Ferrovial and ACS.  But this contract would not not mean a sale operation either since Renfe only could act as Californian authority’s partner “to advise on the initial stage of the project, eventually becoming responsible for the line’s initial operation .” Not too much.
Another project where the Spanish industry had put many hopes was the UK high-speed- and it also vanished. No Spanish construction company has been awarded a single contract to build railways or install equipment.
The Spanish high-speed sector was so convinced that once La Meca was won, everything would be plain sailing and contracts start to come up naturally. However, in the absence of notable transactions, they have decided to sign agreements that in fact are not high-speed but are sold as if they were such as the Moscu-Berlin or Estambul-Ankara routes.
Indeed, Talgo has sold its trains for the line joining the two capitals, the Russian and the German, which will shorten the journey in 4.5 hours. Trains will run at a speed of 200 kilometers per hour. Another medium speed line from Istanbul to Ankara, operational since 2014, was carried out by several Spanish companies. OHL led the construction operations and CAF supplied the train wagons.
An advising agreement similar to the one of California has been won in India by Adif,  the Administrator of Railway Infrastructures. The state-owned company will advise India on the development of its high-speed projects which are estimated over €11.6 Bn. Furhermore, Adif has also reached several deals with US local organisations to share its experience and know-how, particularly in areas such as construction, quality control, management and maintenance. 
The first attempts to sell high-speed trains came from Talgo and CAF on their own. Renfe, as operator of Spain high-speed and very proud of its capacities, decided to organize the industry in consortiums which joined from constructors to electronics companies and train manufacturers and have been bidding for quite a lot of the projects presented all over the world.
Nevertheless, Talgo is basically living on its Spanish business, along with Renfe, of high and conventional speed, while CAF has become a successful constructor of long distance and suburban trains as well as urban trams, continuously awarded with contracts across the world. In fact, the Spanish railway industry, not only train manufacturers, but also experts in electrification, signaling or control has increasingly gained presence in last years, even in the peak of the crisis. Yet no one has eaten the cake of high-speed industry.
The reason for that failure? First, that Spain has not real high-speed constructors. Talgo was a manufacturer of conventional tracks which became noticeable thanks their moveable rolling system (that allowed to change the railway gauge) not to mention other technological features like their lighter weight that enabled them to reach a higher speed.
Talgo entered in the high-speed sector by imposition of former PM José María Aznar, who wanted to take advantage from the sector expansion in the mid 90s and make Talgo become a builder. He included the company in the program without explanation, much to the irk of Alstom and Siemens, but the fact was that Talgo had and still has no idea about high- speed technology and so its locomotives are manufactured by the Canadian firm Bombardier adapted to Talgo.
These facts do not generate credibility. Although Talgo trains with Bombardier engine run smoothly over Spain AVE routes and have never had a serious problem (except the accident of Santiago de Compostela in 2013, that was not a service of AVE but Alvia’s), buyers prefer to trust industry leaders, still the German and the French. Unfortunately, this is a story that cannot be solved only with willingness and self-congratulation.

About the Author

Fernando Barciela
Fernando Barciela has been a regular collaborator for Spain's leading daily El Pais' business section since 1994. He is also a regular collaborator on foreign policy. For Grupo Consejeros he interviews the top executives of Spain's listed companies. He was a correspondent with Diario de Noticias, Portugal's leading daily newspaper, in 1987-2004. He has a degree in Business Science and Journalism from the Complutense University.