Competitive Tendering for Rail Track Capacity: The Liberalization of Railway Services in Spain

Abstract

Liberalization of long-distance railway passenger services in the European Union was scheduled for December 2020. The Spanish infrastructure manager decided that the Spanish high-speed network was congested so an optimization plan would be needed to accommodate newcomers and ensure an 'orderly' transition to competition. The infrastructure manager defined a full schedule for cadenced train paths in the three main high-speed corridors. The network capacity was divided into three asymmetric packages combining all three corridors (of 60%, 30% and 10% of the capacity). The infrastructure manager put out the three packages of capacity rights for tender (for a 10-year period), with the assignment criterion being greater use of the capacity. As a result, three undertakings will compete for the provision of highspeed services in Spain. They have committed to a sharp increase in supply in all three corridors, assuming the risk of demand. Fierce competition is expected.

A Difference-In-Difference Approach to Estimate the Price Effect of Market Entry in High-Speed Rail

“…1.Competition in long-distance rail services interests a dozen of cases scattered around Europe, but until 2020 competition in the high-speed segment was present only in Italy. However, during 2021 two more countries experienced competition in this segment: Spain (Montero & Ramos Melero, 2020), where the French brand Ouigo started operations during summer 2021 and a third one (ILSA) is expected soon, and France, where Trenitalia entered on in the Lyon-Paris route in December.…”

Regulatory approaches to rail competitive entries

“…An important international operator started to be Flixtrain with operated lines in Germany and Sweden. In Spain, there has been an interesting combination of open access limited to duopoly by directed competition as described by Montero and Ramos Melero (2020)…”