From Mecca to Rio, Spain seeks buyers for high-speed rail

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Encouraged by a multi-billion euro contract to build a high-speed rail in Saudi Arabia, recession-hit Spain is fighting to win more lucrative train contracts abroad.

“A contract like this puts you in a showcase,” said Pedro Fortea, the head of Spanish railway company association Mafex, which promotes 73 firms abroad.

“It helps to get you known in many places, it positions you as a reference country in the sector.”

Spain, whose experts in this area include train manufacturer Talgo and information technology firm Indra, has already convinced Turkey, having built the high-speed rail link linking Ankara and Istanbul which was inaugurated in 2009.

The country’s next target is Brazil which in September will award a contract worth $16.4 billion for a high-speed rail network linking the cities of Rio de Janeiro, Sao Paulo and Campinas.

Spain is bidding for the contract through a consortium of 11 public and private companies.

“It is important because it is Latin America and ties between Spain and Latin America are especially intense,” Spanish secretary of state for transport, Rafael Catala, said in an interview with AFP.

“It’s also important because it is high-speed rail and we want to show that we are world leaders in this area.”

Spain is one of few countries with expertise in high-speed railway technology. Its main competitors are France, Germany and Japan.

It has built the second-largest high-speed rail network in the world since it opened its first high-speed line between Madrid and the southern city of Seville in 1992.

The country’s high-speed network -- dubbed Alta Velocidad Espanola, or AVE which means “bird” in Spanish -- spans 3,100 kilometers. Only China’s is larger.

Beyond its technological expertise, Spain now has an additional interest in exporting its know-how.

With the government slashing spending as it seeks to rein in a ballooning public deficit, Spanish firms “have no choice” than to look for contracts abroad, said Alejandro Lago, a logistics professor at the Iese business school in Barcelona.

And Spain is hoping to bank on its recent deal with Saudi Arabia to obtain other similar projects.

In 2011, a Spanish consortium won an $8.8bn contract to build and operate a 450-kilometer (280-mile) high speed rail link in the desert between the holy cities of Mecca and Medina.

The consortium beat out a strong French bid for the deal, in the biggest international contract won by Spain.

Now it has set its sights on Brazil and the United States which are planning new rail links.

“There are also a series of projects planned in the medium term in Russia, Kazakhstan and the United Arab Emirates,” said Catala.

But Lago cautioned that the market for high-speed rail “is not enormous.”

“It is not so clear that many other nations will do what France or Spain have done, which is to pursue a political policy based on a national model of mobility which favors high-speed rail over others methods of transportation,” he said.

“High-speed rail is difficult to justify on a cost-benefit analysis, unless it is in the very long term.”

Only two high-speed links in the world have managed to recover the investments made to build them - the Paris-Lyon in France and the Tokyo-Osaka link in Japan, said Germa Bel, economist and transportation expert at the University of Barcelona.

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