Helen Valenzuela is the CEO of Ouigo España, a subsidiary of the French group SNCF, which has begun liberalizing railways in Spain. At the moment, only high speed is working between Madrid and Barcelona, with the forecast of launching a Madrid connection with Alicante and Valencia by the summer.
A strategy that went well until the electricity price crisis shattered its cost forecasts because the contract structure they have concluded with the rail network manager, Adif, is tied to the company and it cannot respond. “The situation is unstable in the short term,” he told elDiario.es. “I’m very worried, we feel powerless. “Liberalization is in jeopardy, it could be the flower of the day.”
At the same time, it is not clear why the shocking plan of impact of the war in Ukraine leaves them. “I do not understand that the measures that are in place go all the way when we have a very clear mobility decarbonization agenda and the railway is the spearhead.”
Since Ouigo began operations in May 2021, the company has seen numbers, with 90% occupancy and 1.5 million customers, in an offer that goes for volume rather than margins, and where they have just doubled the capacity of its trains, to 1,000. Passengers in each convoy.
“We are very happy with the market, it is an elastic sector in terms of prices and we have reduced by an average of 50%, tickets start at 9 euros and children under four travel for free. “, Explains the General Manager from Ouigo, Spain. This allows them to have a different user profile than AVE.
“We accept families, young people and part-time workers. Also people from big companies who measure costs by what they fall for. Many of them are customers coming from the plane. “People who are already used to traveling by train, who stay on the train, we fill Renfe,” he assures us. That is, the clients of the “Air Bridge” were captured. The plane between Madrid and Barcelona is at a historically low level.
Until there is an energy cost crisis, break any plan or forecast. Valenzuela itself does not complain about the increase in costs, but rather the fact that the type of contract left them with a place to maneuver with Adif. “We were flying in a very heavy plane and they took out the engine,” he said.
“Energy purchase depends on the adip. We can not legally enter the market. Any airline, for example, can make future purchases, develop procurement policies and cover financially. not we. “- he points out.
“Adif does not keep its risk, it informs us, a tender was announced in March 2021. [de su contrato eléctrico] And they switched from one fixed price to another completely variable. They had several mix sentences, fixed and variable; And they switched to variables at a time when no one predicted a crisis that passed, but it did. “The contract he maintains with Portuguese group EdP.” We moved from 60 euros per megawatt hour (MWh) to 300 and beyond. On March 8, we touched 700 euros per megawatt. “
“We know that Adif is doing everything to find solutions. They try to fall into the electro-intensive category because it is voluminous, but technically there are criteria that do not fit and as a public entity, they have limitations in the contract. “For example, they can not have a contract for more than five years,” he suggested. You can not tell the banks that “this is how it was created and Adif should answer you,” he said of his financing capabilities.
In this situation, Valenzuela predicted that rail passenger transport would be part of a package of measures to deal with the economic situation caused by the war. But they left.
“We do not understand what happened. It was a surprise, because the introduction to the royal decree clearly states that they are aware of the negative impact on the business plans of both passenger and freight operators. We were planned and suddenly, we disappeared.”
He assures us that we are talking to “the Ministries of Transport, the Ministry of Finance, the Environmental Transition, the CNMC, the Monclo … we want to do something to help curve the curve.” For example, an appointment, a change in a royal decree during its elaboration, or other alternative proposals.
Valenzuela puts forward a model to follow what has been done in Italy, which has extended state aid to operators initiated because of COVID; Or to allow operators, as in other countries, to go to the electricity market.
“We have invested 600 million euros in Spain, we have a 10-year contract and we pay the entire investment, training of staff, homologation of trains, with a brand that starts from scratch. At the moment we have only a third. The plan is in place, in 2022 we will place the second one. “
This refers to the connection that Madrid have with Valencia and Alicante, which should be put into operation by the summer and which, at least for now, is not considering a postponement.
“I do not want to take this into account. Delaying the liberalization of this route will be very irresponsible. They are waiting for us. We have a lot of customers who ask us when we open because more trains are needed and it is very low. “Prices that have nothing to do with what they know.”
What is not in their plans is to raise these prices as it will disrupt their business model. “We can not raise prices because we are a very elastic market. Customers do not care who is to blame for the price increase. “We can not do that. “It is inaccessible,” he repeated.
According to him, the reason is that when the product is launched, you have to create a “shock” supply, add a large volume and reduce the price; If you do not do this, the user will not make the change. “But we can not stand it alone [con la subida de coste] And that it becomes an elite product. AVE is an exclusive and elite product; We will exclude families, students and part-time workers who could already access at high speeds.
Helen Valenzuela does not name what impact the price of electricity will have on the company, though she does indicate that it is “millions of euros”. He points out that if they had to influence the price increase on him, now, with the Madrid-Barcelona operations, rates should increase by 30%; And when they work in the Valencian community, the growth can reach 50%.
“With those who fall and those who are going to fall, with a very high inflation scenario across Europe, the purchasing power of the Spaniards will decrease. We can not raise the price,” he reiterates.
In the future, the group plans to operate in 2023 between Madrid, Sevilla and Malaga. “It will not be in 2022, because the line is not equipped with a compatible RTMS system, it is still historic, which was installed in 1992. We do not want to wait and carry out the homologation of trains with a system that has been discontinued. . ”
What Ouigo does not have are plans, routes that connect Madrid with Galicia or the coast of Cantabria. “The north will have to wait because the infrastructure is different. This is another type of rolling stock, we do not have a variable gauge. Railway is technically complex and diverse in Spain, as in all countries. “Unfortunately, we do not have much choice in the short term.”
With these business plans, Ouigo would be profitable in 2022 or 2023. Now he has doubts. “As I said, we flew and the engine was taken away,” said Valenzuela.
Source: El Diario
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