Else Beekman
Spain’s railway sector is on the brink of another transformative change. Following the liberalisation of high-speed rail, the focus now shifts to commuter (Cercanías) and medium-distance (Media Distancia) services. This next phase could significantly reshape the landscape currently monopolised by Renfe, Spain’s state-owned railway operator.
In 2021, Spain witnessed a historic shift as French operator Ouigo entered the high-speed rail market, breaking Renfe’s long-standing monopoly. Shortly after, Italian company Iryo joined. This created a competitive environment that has benefited consumers with lower prices and improved services. Only 1.5 years after entering the Spanish market, Iryo reached 10 million passengers. The liberalisation was mandated by the European Union’s Fourth Railway Package, aimed at enhancing efficiency and affordability in public transport.
Commuter and medium-distance services: a more complex challenge
While high-speed rail liberalisation stirred controversy, opening up Cercanías and Media Distancia services presents an even bigger challenge. These routes serve over 492 million passengers annually, many of whom rely on affordable public transport. Any new entrant would need to balance competitive pricing with sustainable profit margins.
SNCF and potential new entrants
French railway giant SNCF, owner of Ouigo, is exploring entry into Spain’s commuter rail market, along with several undisclosed operators. However, they face a unique dilemma. New competitors could choose the most profitable routes. On the contrary, Renfe is required to serve a wide range of locations under public service obligations. This strategic advantage for the newcomers has already sparked tensions between Ouigo and the Spanish government.
Political and economic controversies
Spain’s Transport Minister, Óscar Puente, argues that Renfe cannot compete on equal footing with rivals that can selectively operate on profitable lines. Accusations have also been made against Ouigo for allegedly undercutting prices with support from the French state, further fuelling the debate.
Meanwhile, SNCF has proposed a controversial clause demanding a €1 million compensation if it loses the tender, citing high preparatory costs. Additionally, the company seeks access to existing rolling stock and personnel to minimise financial risks.
Gradual liberalisation process expected
Despite these challenges, the liberalisation process is expected to be gradual. Renfe’s current contract is valid until 2027. Thereafter, the railway company has an option to extend it until 2033. However, some routes—accounting for about 3% of the total contract—could be opened to competition as early as 2026.