NEW TRACKS FOR THE EUROPEAN RAILWAY
Sir State Council, Sir XXIst Century Club's president, ladies and gentlemen;
Good evening and thank you very much because of coming to this important forum such as is the XXIst Century Club, to whom thank that they have thought in me as lecturer on this course titled as "Reflections at the end of the century". I want to thank too all the board of directors who manage this Club.
I show my gratitude in the name of the railway family, an economic, social and business sector whose most important exponents and best professionals are here, among the public. Their presence at this meeting is very important for me and, for Renfe it is an incentive to continue with the collaboration lines begun last years.
Consensus, understanding, alliance, cooperation are words which the railway sector uses today with agility and effectiveness. I thank you the trust which give me to back with your presence. I wish that the reflections related to the importance of the train into the construction of the new Europaen railway would be interested to you and my colleages or, at least, would give you an idea about the means of transport during the following century.
" His Majesty Belgium's King, Germany's president, France's president, Italy's president, Her Majesty Luxembourg's great duchness, Her Majesty Low Countries' Queen, want to put the basis of an Union, more and more close between the European countries; decided to make secure, with a commom action, the economic and social progress into their respective countries, eliminating the barriers which divide Europe; fixing as the most important objective of their efforts the constant improvement of the life and work conditions into the different countries; considering that the elimination of the obstacles being between the countries need a concerted action to guarantee a stable economic development, an equal commercial interchange and a fair competition; worried for reinforcing the union of the different economies and to fix their harmonize development, reducing the differences between the regions and the underdeveploment of those countries less favoured; (...) they have decided to found the European Community".
I've just read a part of the definitive act belonging to the Rome Pact. It was ten minutes to eight in the evening; we were at the Horacios and the Curacios hall into the town council Palace (Rome), at the Capitolio hill; it was on 25th of March, 1957; and put their signature the following people: Konrad Adenauer and Walter Hallstein, for Germany; Christian Pineay and Maurice Faure, for France; Antonio Segni and Gaetano Martino, for Italy; Joseph Bech and Lambert Schaus, for Luxembourg; Joseph Luns and J. Linthorst Homan, for the Low Countries; and Paul Henri Spaak and J. Ch. Snoy, for Belgium.
It seems opportune to give the names of the protagonists in honour to the most important men of the Community Europe, names which today are less known than our most famous people among the celebrities, but, without anydoubt, much more important for the social welfare and the cultural enrichment of our countries.
Here it is the most important word: "welfare". We aren't building Europe on a criterion of political influence. We can't eliminate any barrier only to make easy the free movement of people and merchandise. We didn't create an commom economic space to reinforce the internal domestic trade. We didn't bet on a monetary union to compete with the dollar and the yen. Europe is, as the citizen thinks, a space of freedom, prosperity and solidarity, that is to say, a supranational instrument to advantage of the social welfare. It is the community expression to the person service.
Welfare is prosperity, but knowledge too. If anything distinguishes the developed societies, will be the capacity to extend their living setting from the curiosity. The transport has an important position on the mobility of the people and the ideas which travel on them.
Last two decades, since the last great crisis, the mobility has increased in Europe. It is a phenomenon which hasn't been a suprise for anybody, but it has catched all of us unawares. Saturation is a word of commom use in the transport vocabulary. Saturation of the air space, retention in the roads, breakdown of cars at the centre of the different cities, bottlenecks in the railway infrastructures,...
....beautiful words and much more beautiful words which show that the ways of this enormous skyscraper called Europe need a deep renovation and revision.
The figures are clear. During the first three months of 1999 more than 2,636 million people used the train as mean of transport into the countries which belong to the European Union. Renfe is in the forth position in the ranking with an 8.14% over the whole of the Union.
If we extrapolate the results to the whole of the fiscal year with an only duplication and we add the metropolitan transport, the fifteen countries of the European Union can every year carry by train the whole population in the World.
If the transport of passangers by railway gathers continuous growths during the last years, the merchandise transport suffered an important recession of a 5% during the first six months of the last year. It seems unbelievable that at the same time the frontiers are dessapearing and the domestic trade grows, the train loses seller's quota.
It is obvious that it isn't enough the elimination of the political barriers, but there have been technical and economic difficulties yet, which on the contrary on the traffic of travellers, hinder the free movement of merchandise into the Union.
Therefore, the European Union stimulates as the most important objective the foundation of transnational corridors for the goods transport, known as freight ways, but I'm going to speak about them giving more details later.
In Spain, Renfe carried in 1999 418 million travellers, among who 375 million used the suburban services. The most important growth is into this service which make easy the access to the big cities, with 16 millions of new costumers.
By the way, the high speed is the business unit which registered a most important increase, a 9.3%, which places the connections between Madrid, Ciudad Real, Puertollano, Cordoba, Sevilla, Malaga, Huelva and Cadiz over the five million passangers each year.
Commuter and high speed are the services which have waken the train up, to turn the first one into the mean of transport prefered by the townmen; and the second one, is placed in the forefront of the technological, economic and organizative renovation of the railway system.
Last year was specially difficult because of the bad climatology and the syndical problem, but the high speed services closed the year with a punctuality of a 99.7%, that is to say, only arrive to their destination with more than five minutes of delay -and not always was Renfe's blame- three out of a thousand of trains.
With a quality of 8.5 over 10, as the inquiries which we make to our costumers indicate, Renfe obtained with the AVE management the first prize that the European Foundation for Quality Management gave to a public enterprise into all the European countries. We are in front of a management model whose example quickly goes through all the business units which make up this company.
As in all the European Union, the merchandise transport maintains with great difficulties its statu quo, except for the increases registered in the intermodal traffic. Although the saturation of the roads, the train can't articulate interesting solutions to increase its quota in this part of the market, always with the necessary specialization in the pure and big size traffics. The competition of the merchandise train is one of the challenge of the European Union.
By the way, the train plays another time an important role in Europe. It's really that the romanticism of the big European night trains has been changed by the effectiveness of the commuter trains, the fiability of the railway connections in medium distances and the quality of the high loans.
But, it would be a wrong to analyse this recovery according to quantitative averages. The train is nowadays a social phenomenon in Europe and in an important part of the world. It isn't surprised that some of the most important projects into the infrastructures would be railway character.
The European citizens wish transports more and more integrated and respectful with the environment. All of us know the limitation of the natural resources, of the necessity to improve the structure of costs into our enterprises and, at the same time, the placed expectation in the railway to make compatible both objectives.
The citizens see Europe as a supranational instrument to surpass, because of its own and mutually nature, the difficulties that the internal frontiers (cultural and physical) mean for a continous development.
Europe is the chosen mark to improve the vital quality. A life much balanced is the axis around it turn round the new social tendencies. At the end of this century we distinguish three important facts of social change:
In the first place, the citizen has found in the technology a reliable ally to improve his or her welfare. It is looked for a nice technology, that one which can solve with effectiveness and kindness the interfaz , the communication zone, between the man and the machine.
The confluence of the electronics and the computing, whose best expression is Internet, has changed the citizens' communication capacity. It is the technology which makes easy the access to the knowledge, puts in order and summarizes the information and passes it on fastly to all the places in the world and in a few time to the television placed at our living room.
-The second most important revolution has been the woman incorporation to the labour world. This process has considerably hurried up last two decades, to be conducive to the highest participation in all the vital circles. In United States, the women have already supposed more than the 50% of the buying decisions.; they are majority in the consumer rules.
But in our country there is yet an important unbalance in favour of the man (for example, the passanger's profile who travels by train is 70% man and 30% woman), in accordance to the women climb positions in the economic-social organization chart, their prescription capacities increase, such as their opinions increase too in quantitative terms.
Because of the importance of this process, those enterprises, organizations or societies which can't assimilate the important change which the complete integration of the women involves are sentenced to the failure.
-Quality of life is a word which includes the thought currents which make up the third link of the social change. It seems that the culture of earning money easily and fastly isn't today a reference to the new generations. The growth of the social awareness around the new idea of solidarity, more and more far from the idea of charity (this one is an aspect with connotations clearly passive) and near to the continous development, leaned on the proactivity and the transmission of the knowledge.
Nowadays, there are poor countries which don't need fishes, book on the fishing, but they need as soon as possible to teach them to fish without finishing with the natural resources.
The importance of the variety against the uniformity; the tendency to the personalization against the personal preference; the preference of the authenticity against the imitation; the triumph of the feeling against the emotion; form a scene much hot, harmonic and balanced.
It isn't important to have, but it is important to be. It isn't good to hoard, but to enjoy the goods. It isn't important to be a famous person, but to live. We are building new references and new models for the generations which will govern the new Europe.
And all of them have as commom denominator the dialogue, the consensus, the reflection,..., in short, the communication.
The technology and the humanism converge at a new railway system which has to strengthen the social-economic structure of the European Union.
If you allow me to continue with the comparison, the telecommunications will be the nervous digital line; the enterprises and the commercial interchange, the muscular tissue; and the infrastructures, the bony architecture of the European body.
The experts in the railway enterprises know that the responsabiliy rests on the train, because of its capacity to, with effectiveness, combine quality and warm, technology with humanism. The challenge consists of recuperating the train's social values from positions with an important business stress.
To get that the train honours the mission which the European society, through the demand but by the wish too, has begun to entrust, it is necessary to operate in three fields: in the technic field, in the legislative field and in the infrastructures field.
Last day, 1st of January I have had the satisfaction of assuming the presidency of the International Union of Railways. It was founded in 1922, and the UIC is made up by 145 railway enterprises from the five continent, with the objective of uniting and harmonizing the exploitation conditions of the railway transport.
The UIC is an important reference to those people who work in the railway field. To those ones who aren't familiarized with these themes, I will only give three facts which will allow you to judge its importance:
-As a whole, the countries represented in the UIC add 800,000 kilometres up of railway lines, that is to say, it is around 60 times long related to the Spanish system.
-The enterprises integrated in this Union use more than seven millions of workers.
-The basic indicators are also spectacular: 1.5 billion of travellers a kilometre and 5.7 billion of tons a kilometre.
It is, above all, a technical institution which has its influence over the institutional field in the European Community of Railways (CER), the last one has its central office in Brussels, near the European Union's decission centres.
UIC's most important mission is to reach the internal coherence into the whole of the European railway system to reinforce its intereffectiveness and, as consequence, its competition, through the cooperation of the enterprises of this sector. Among other activities, the UIC writes the rules and the suggestions of general or restricted application to improve the international transport; guarantees the representation of the railway in international organizations; finances studies and projects of Research and Development; and promotes the interchange of experiences between enterprises.
The intereffectiveness, in the conventional railway field as the high speed field, is an important aspect. It is tried to operate in this way over the problems provoked by the determinants which have historically carried as consequence of the different technic solutions of each country for the signing, the communications, the electrification and, in general, the railway infrastructure and superstructure. The technical harmonization allows, for example, the Eurostar to travel between Brussels and London carried by locomotives which answer to four different electrification systems.BR>
Think in the difficulties that it causes to the transport by road if each time that they must refuel at the petrol stations in the different frontier countries, they must do it with different fuels, incompatible between themselves. The answer is very simple: it wouldn't possible the transport.
The technical and standar harmonization carries to the opening of railway lines. The freedom of access to the infrastructures in conditions of equality and competition is the most important objective to the European Committee.
From Spain we see this process with caution and trust at the same time.
The caution comes from the inherent difficulties in the liberalization processes, and it is much important in a mark that surpasses the national frontiers and needs the agreement of all the members.
The trust derives from the fact that the Commissioner of Transports and Vice-president of the European Commission would be the Spanish Loyola de Palacio, with who will have the opportunity of meeting soon, in the mark of the next general assambly of the UIC, which will take place in Budapest next 9th and 10th of February.
The liberalization of the railway is a requeriment which connect with the most important rudiments of the European Union: much freedom and competition for the citizens.
It is a process that, with excessive frequency, is mixed with the privatization. The only country which privatized at the same time as it liberalized was Great Britain, with the result that many of you know: the railway system has forgotten quality and fiability, even security; the costumer continues paying the same quantity or much; and it is two times and a half more expensive to the State than that gave to the dissapeared public company, British Rail.
To understand the wrongs, we must know the beginings. The process of liberalization of the railway transport began at the first of the nineties. Concrectly, the European law 91/440 oreders the conditions for the restricted opening of the railway system to the internatioanl market and promotes the account separation between the management of the infrastructure and the services of transport. At the same time, it calls to the countries members to face up to the cleaning up of the public enterprises, important condition to begin a new standar and economic regulation of this market.
Then, the European law 95/19 establishes the criterions to the sharing out of the traffic capacities among the different operators and the setting-up of a tax because of the use of the infrastructure.
Nowadays, it is underway a new European law, which will replace the last one and which will go deeply into the rules of the game necessary to favour a new regulation in the use of the railway infrastructure. The last one considers that the right of access resides in the Manager of Railway Infrastructures in each country, but suggests the creation of an "only small window" or organization with international character which would give the moving licences. It seems for the railway a medium similar to the Eurocontrol, but because of its natural long range, the train is much more placed all over the countries.
To sum up, the European Commission wants to accelerate the liberalization by the clear separation between infrastructure and the services. From this criterium, which is more or less clear to all of the actors involved in this process, there are almost such formulas as countries into the development of the liberalization.
In any way, the facts known and the projects guessed include some certainties which must move away from the railway sector the fears which inspire the combination of pessimism and uncertainty.
In the first place, it is a certainty which, except of the English design, despite of all it maintains the public tutelage on the traffic regulation, the infrastructure maintains its public character. It is proved that only the States, with their budgetary availability and their strategic and total view over the territory which manage, have the enough budgetary capacity to finance completely or partially of the big projects of railway infrastructure. Only in this way it is guaranteed the polytical action which involves the country balance and the harmonic development of the different managed regions.
In the second place, the public operator, or the State continues being the most important shareholder, or transfers the majority power or even proceeds to its capitalization in the market, keeps the most important position. And the begining of its leadership isn't such an adventage at the exit line -the history weighs too in the opposite way, above all weighs in the structure of costs- as the management of the knowledge which accumulate its experts, its equipments and its business structures.
I'm sure that the future private or public enterprises of the railway transport in Spain will eat of the best professionals who nowadays work in Renfe. Because of, the business toughness will rest more over the commom knowledge and over the management gears than over the individualities.
By the way, the liberalization is a wish that is borned in the European Committee and must be agreed into the junior Cabinet and signed in the European Meetings. It is a commom project which, to advantage of the interoperation of the railway lines, must go on at the same speed in all the countries. To a country as Spain, which is placed at an peripheral position, we won't get nothing if France is changeless in its positions. It is necessary a coordinated action, reflective and constant checking. Spain, despite of its peripheral position and its small delay in the first phases of the liberalization, is prepaired to advance such fast as all the countries members which belong to the European Union will decide at the same time.
The social wish of tren can be channelled by new and better railway infrastructures. With the current designs and the following capacities of traffic, the railway enterprises few much can advance.
The European line is today a whole of unconnected systems, full of bottlenecks and insufficient corridors to answer the increasing demand of mobility.
The Union is working in two big projects which repair these lacks: the transeuropean line of the merchandise transport and a new interconnected lines with high loans.
The first project is known as freight ways, free corridors to the international merchandise transport which make up an unit from the begining to the destination, that is to say, they don't suffer the freigth breaking which means the national frontiers. It is about important corridors to the Committee, very worry because of the few train's quota into this market and the difficulty to articulate technic and commercial solutions which emphasize the prominence of the railway.
Renfe takes part in the first freight way completly constituted. This corridor has been called Belifret, in short it will celebrate its train number 2000, but it is an important initiative which hasn't enoughly thought out.
The second big project is related to the in fashion transport: the high speed train.
Excuse me, but I'm going to do a previous reflection to the route of the wish train: we are into a dangerous dialectic which distinguishes high speed and speed high, a game of words which reserves the first one to the strongest ones from the politycal view, and the second one, to those less lucky than the first ones. This perversion, whose original sin dates from a necessity only demagogic, confuses the train with a service. We must build infrastructures and services able to solve the demands of moving with the confort and the reliability which the European citizen demads and desseves. The least important is the high speed -on transport we know that the travel times depend on the averages obtained- and the kind of stock material which is used.
In Spain, we have an only AVE, but a magnificient Euromed, a wonderful Alaris, commuter trains very punctual or effective regional services with diesel traction. Restricting the modernization of the railway system to the AVE is to limit the professional initiative of the system's managers and the innovatory capacity of the enterprises which construct the stock material.
Out of the 11,699 kilometres of lines with high loans that there are in the world, 6,618 kilometres are in Europe. France is the country with the longest line in Europe: 2,503 kilometres in service and 295 kilometres are being constructing. Then, Spain, which will add to the 471 kilometres of the line Madrid-Seville, the 745 kilometres of the corridor Madrid-Barcelone-French Frontier; Germany and Italy, with 1,072 kilometres and 906 kilometres, respectively. Even without including the projects have already approved by the Spanish Government, Spain will be in the year 2004 the second European country because of the extent of its high loans line.
The projection of the train as an alternative to the collective transport needs the planning and fulfilment of the new infrastructures with high loans, which make up the secular delay that has suffered the country in this theme, but at the same time it places us among the most effective railways in the European Union.
Renfe finished the fiscal exercise of 1999 with 418 millions of travellers and 26 millions of tons carried. Without any doubt, these are important numbers, but they must'nt hide the limits of the offer increase which derive from the obsolescence of some journeys and the few competition of the railway infrastructure at important geographycal areas.
For example, the current design which connect the Spanish center to the North-North-west makes the implantation conditional of any new railway service, whose run times will always be far from the costumer's necessities. The Guadarrama variant, included in the Infrastructures Plan whose presentation we greet these days, will change the position.
The new Northern access will mean the step from the annual acumulative losses of 17,000 million pesetas to the multiplication by three the current seller's quota and, as consequence, to the economic balance of the corridor. But it will be much important the train recovery as motor of the economic development of an area which concentrates almost the third part of the Spanish population.
Because of it is often talked about the Guadarrama variant as a new design between Madrid and Valladolid, when, in fact, is much more; it is a new main line distributor of the railway traffic between the Spanish center and North. Of course, in Castilla y Leon it will value soon the important reductions of the travel times, which will be moved, at the same time, to Galicia, Asturias, Cantabria and Vasque Country.
The high speed line between Madrid and Seville is an important antecedent. The combination between infrastructures and railway services with high loans considerablely contributes to the invigoratation of the economic, social and cultural changes among the connected towns.
Look at this fact: the lanzadera service which makes the trains AVE between Madrid and Ciudad Real and Puertollano carries on one million of travellers a year, that is to say, ten times the population of this province.
The train is another time the catalyst of economic growth. Related to the creation of new infrastructures, the railway sector exerts a new leadership at the construction of a new system better vertebrate and well-balanced with its country side.
It is obvious that the projects started by the Ministry of Public Works make up an stimulate portfolio of buildings for the construction enterprises in the country, which are into the diversification processes which look at the transport sector. The Infrastructures Plan 2001-2007 designed by the Government includes a total investment of 4.7 billions in the railway. This new investment will allow the creation of a high loans line, made up by the corridors in building or in project such important as the quoted corridors Madrid-North-west, Madrid-Barcelone-Frontier, Madrid-Valencia, Madrid-Malaga, Madrid-Lisbon and their respective enlargements and variants, and the Mediterranean and Atlantic axles too.
In the same way, the investment plans in trains designed by Renfe give an important quantity of work to the construction sector of stock material.
Renfe will engage during this fiscal year investments which cost 215,888 million pesetas, out of the 111,750 millions (the 52% of the whole) will be for the buying of trains to the corridor Madrid-Barcelone. The buying of this new high loans park will be raised by some financing ways, among them by funds generated by the own exploitation of the line.
Next years Renfe will have one of the fleet of trains most modern in the world, which will travel on the railway lines that form a system able to generate employment, richness and social knowledge. This one is a delicious fruit of the remeeting between the infrastructures and the trains which will make easy the competition of our enterprise into a future characterized by the liberalization of the railway transport.
Nine out of ten Spanish people join the modernatization of the country with the development of the infrastructure and the railway services. The important responsability which derives from this trust into the railway system rests in an important way on Renfe. Our enterprise is prepaired to manage that important social resources which places the train at the apex of the much reliable alternatives to favour the growth of the mobility.
It is impossible to use the oportunities which appear at the new horizon without a clear business strategy. Renfe has designed an own model which guarantees the order and the harmony in the rearrangement of the railway sector.
It is a fourth way (I don't call it third way after the last facts taken place in Great Britain). It is about, above all, an alternative adapted to the Spanish society's necessities, which is our costumer.
The model which I'm going to explain turns around two axles: a new organization of the railway system and a call to the private initiative to share with Renfe the risks and the benefits of the strategic alliances.
In our opinion, which hasn't got other shades than the strictly professional, the new railway system must rest on three elements: an infrastructure manager; a regulator which guarantees the freedom and the equality at the access to the railway infrastructure; and such operator enterprises as are technically prepaired to compete at the market of the transports. Renfe's professionals nowadays integrated in the area of infrastructures and Services will form the spinal column of the two first public enterprises.
Renfe, in its side, will be one of the operator enterprises, and it will be with vocation of leadership such at the field of the seller's quota as at the field of the quality of the services
The second axle is -excuse me this term- the liberalization of the management. With this few orthodox formula I refer to the necessity of articulating cooperation formulas with the private capital to improve the management. And I assure you that any interest to privatize doesn't press us, but the need of face up our methods and systems to those ones which contend for markets such competitive as the construction of stock material, the civil building and the services. On the contrary, who would deny to his or her enterprise the opportunity of getting rich with the economic powers contributions of its setting?
The strategic alliances make up an horizon of oportunities for the railway sector. And Renfe wants to be at that scene of consensus, management very qualified, shared risk and new businesses.
The buying, the financing and the maintenance of the stock material is the 45% of the costs of the railway exploitation. It is an evidence that with this structure of costs, our natural allies must be the own manufacturers of trains.
In front of them, they have the opportunity of getting long-dated the costumer, their most important costumer in Spain and one of the most important in Europe, and to guarantee the return taxes of the investment by ways less fast than a cold sale contract of material, but much more sure and lasting. If you really believe in the train's furure, we must believe in it with all the possible consequences.
By the way, the railway business not only is opened to the builders of trains, but also to those ones that want to divide the management success which is annually valued by more than 400 millions of costumers.
Our doors are opened to those enterprises which believe that the hard and profitable businesses always bet on the long-dated.
The ruled and managerial scene which I've just drawed will require the adaptation of our structures, our professionals and, in general, all those actors who take part in the railway scene.
Renfe bets on a development model based on the consensus, that has historically allowed a fluent dialogue with the trades union. It would be difficult to build the new railway system without their participation, beyond the punctual dialectics of the collective negotiation, the agreement is an important tool to guarantee the quantity and the quality of the employment in the railway sector, and the leadership, at the field of the transports. Without any doubt, the contrary, the confrontation weakens the whole of the system.
Troski said that it isn't necessary to believe in the company of trams to carry you. As you imagine, in Renfe we aren't agreed with this criterion. I, personally, as Renfe's president and UIC's too, firmly think in the future of the railway; and I think that Renfe will have an important roll in that scene of the progress, balance with its social setting and social welfare. I need to believe in the company of trains to carry us to the business horizon that ourselves will have the chance of designing.
I invite you to go on this train called social wish and to share the future projects with the wonderful professionals who nowadays make up Renfe.
Thank you very much and good night.
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