STUDY ON COMPETITION IN RAILWAY FREIGHT TRANSPORT IN SPAIN

ICN, Sydney, May 1st 2015

María Sobrino Ruiz Head of Market Studies Unit

CNMC

Interest of the Study

Lack of effective competition in rail freight market in Spain after ten years of liberalisation

Large number of studies/ position papers/ European Commission and European Parliament initiatives

European context: New Directive (Recast) and negotiations on Fourth Railway Package

Areas of interest:

Competitive situation in the Spanish Market

Restraining factors on the level of competition in the Spanish railway market

Factors related to infrastructures

Factors related to the management of railway infrastructure

Factors related to access regulation and the pursuit of the activity

Specific advantages of RENFE-Operadora (incumbent)

Inadequate institutional development of railway regulator (CRF)

Interest of the Study

Methodology

Previous investigation (competition cases, papers, other studies)

Jan.12 Mar.12 May.12 Jul.12 Sept.12 Nov.12 Jan.13 Mar.13 May.13

Press Release

Meetings with stakeholders (12)

Information request (49)Database

Drafting the report

Economic characteristics of rail freight transport in Spain

Renfe-Operadora is, certainly, the largest operator in the market:

RENFE-OP-ERADORA

80-90%

COMSA 0-10%

ACTIVA RAIL 0-10%

CONTINENTAL RAIL 0-10%TRACCION RAIL

0-10%

LOGITREN 0-10%

Turnover freight transport 2011

Competitive Situation

4. Various indicators show that Spanish Railway is less efficient than other European countries

  DB AG RENFE SNCF FS

Income / Worker (F + P, mill. €) 0,51 0,20 0,20 0,22

EBITDA / Worker (F + P, mill. €) 0,06 0,04 0,01 0,04

Labour Costs / Income (F + P) 0,29 0,31 0,44 0,48

Freight Income. (mill. €) / Nº Freight Wagons 0,17 0,02 0,04 0,03

Nº Drivers / Nº locomotives (F + P) 3,62 9,14 3,97 3,70

Nº Drivers (M + P )/ Nº Freight Wagons 0,17 0,37 0,59 0,35

Recommendations

First: The cost-benefit analyses as part of planning rail infrastructure in Spain and of investments must incorporate factors relating to their impact on effective competition in the market.

Investments that promote interoperability with other European countries

Investments that promote access to ports

Second: Improving traffic management

To give priority to economic criteria in allocating capacity where there is congestion

Introducing penalties for reserving unused capacity

Third: Improving terminal management

To make terminal opening dates and timetables more suited to the needs of the rail companies

To increase transparency and access to up to date information about all logistics terminals, both public and privately-owned

Recommendations

Fourth: To adjust access in line with the principles of necessity, proportionality, transparency and non-discrimination

The requirements laid down for obtaining railway undertaking company licenses and safety certificates should be made simpler, cheaper and more flexible

To make the requirements laid down for the approval of rolling stock simpler, cheaper and more flexible

Fifth: To improve the design of charges

Transparent methodology

To simplify charges and introduce criteria for imposing penalties for non-utilisation of reserved capacity

To abolish or change the structure of the access charge

Recomendaciones

Sixth: To make RENFE-Operadora more independent of the Ministry of Development and infraestructure management

To ensure that RENFE-Operadora is not attached to the same body as the system regulator or the infrastructure administrator

To ensure that RENFE-Operadora is autonomous and financially self-sufficient

Eighth: To make the provision of railway services independent of all other related activities within RENFE-Operadora

To make the companies which sell and lease rolling stock and maintain and repair of rolling stock independent from RENFE-Operadora in legal, accounting and functional terms

Transparent sale and leasing prices and non-discriminatory access by third parties to rolling stock currently owned by RENFE-Operadora

Ninth: Strengthening the rail regulator (CRF)

Legal personality, financial autonomy and sufficient material and human resources to fulfil its responsibilities

Increase competences