Isaías Táboas, President of Renfe Operadora, analises in this interview the plan or the company. Mafex Magazine: Renfe Operadora’s services, according to the latest annual data, continue to achieve good results. The train gains users in our country, both in high speed, as well as in suburban and regional services. What do you think is the reason for this growing demand? What are the most outstanding figures? What are your prospects for 2019?
Isaías Táboas: 2018 has been a very positive year in terms of passenger traffic. For the first time since 2008, a decade later, we have once again surpassed the 500 million passengers, regaining 20 million trips in a single year. The growth of passengers has been especially relevant in the suburban services of Madrid, with 256 million passengers, 6% more than the previous year, and in Rodalies de Barcelona, with 116 million, 2.4% more.
Similarly, Ave services (up 3.8% on 2017), Long Distance (up 4.5%), and Avant (up 5.9%), consolidate a growth trend already noted in recent years in our country.
This shows that there is a relaunch of economic and professional activity and that society is on the move. For Renfe, the trust that citizens have in the services we provide is another incentive to continue working and improving the quality of our services.
In 2019 we expect the level of activity and turnover to continue to grow in all the services we provide within our borders, both public and commercial, while we continue to explore business opportunities abroad to increase and diversify our sources of income.
Mafex Magazine: Among the most relevant investments planned there is the tender for new passenger rolling stock for 3,000 million euros. How does the roadmap for these acquisitions go?
Isaías Táboas: Last January, Renfe started the tendering process that will lead to the renewal of a large part of its train fleet. In total, close to 3,000 million euros will be tendered, thanks to the Public Service Obligation contract that we have signed with the Ministry of Public Works and Transport, which will lead to the renewal of approximately 50% of the train fleet dedicated to public service. The calendar began in January, with the tendering of the new metric gauge trains; in February there will be a tendering of motor heads for high-speed services; and in March the purchase of the new high-capacity rolling stock for the large suburban nuclei will be undertaken. Subsequently, in April, the acquisition of new mid-distance trains, both electric and hybrid, will be addressed. The aim of these tenders is to reduce the average age of the railway fleet, especially of suburban and regional trains that have materials that, in some cases, are more than 40 years old.
Mafex Magazine: Your Company plans to invest almost 650 million euros in 2019 in equipment and services with the aim of improving comfort and traveller service. Is this a new commitment that focuses on users? How do you plan to distribute these funds?
Isaías Táboas: The client has always been and must continue to be at the centre of Renfe’s strategy. For this reason, we will double the investment devoted to passenger service. Out of the 855 million euros that the Group plans to invest in 2019, 838 million euros will be used to improve comfort and customer service. Mainly by increasing and improving the train fleet at the service of passengers, but also by making it accessible to all and by making a firm commitment to the improvement and renewal of the information and client service systems.
The details of these investments include purchasing new trains (408 million euros), improvements to trains currently in service to increase their capacity and improve accessibility (281 million euros) and actions to improve accessibility at suburban stations, the only ones Renfe is competent to manage (40 million euros).
Mafex Magazine: You are currently preparing a new strategic plan with a five-year horizon until 2023 that aims to improve your competitiveness against other transport modes. What are the priorities of this programme?
Isaías Táboas: The objectives of this new strategic plan are three. To increase the company’s turnover; to gain in terms of efficiency; and, finally, to preserve the high quality of our services, both public and commercial, increasing even further our safety levels.
To this end, the plan recently approved by the group’s Board of Directors relies the company’s strategy on three key pillars: focus on the client, internationalisation and efficiency and safety. In order to carry out this strategy, we will use three fundamental levers for change: digital transformation, cultural change and the development of strategic alliances, both inside and outside our borders.
Mafex Magazine: The year 2020 is a key date for the sector, as other operators are entering the market of passenger transport. How is Renfe preparing for this new scenario?
Isaías Táboas: Indeed, the perspective of liberalisation in 2020 is a great challenge for our company. But at the same time it represents a great opportunity to grow and an opportunity to be better as professionals and as a company. For this reason, the 2019-2023 strategic plan that we have just approved, includes nearly 50 projects that seek to deeply transform Renfe so that it can compete successfully in this new scenario. Among the most outstanding actions of this plan, I would highlight the launching of new low-cost high-speed services, the firm commitment to internationalisation and strategic alliances, the transformation of Renfe Viajeros into an integral mobility operator based on the concept of “mobility as a service”, which involves the provision of services throughout the entire journey, from the origin to the final destination. And with regard to Renfe Mercancías, the objective is to transform the company into an integral and international logistics operator.
Mafex Magazine: Likewise, the sector is undergoing a transformation determined by constant technological advances. How is Renfe going to respond to the challenges of innovation in the face of such a changing ecosystem?
Isaías Táboas: Technological disruption is, along with liberalisation, the other major challenge that Renfe is facing. In view of this challenge, the company will increase its investment in R+D+i, from the current 1.3% to 3% on the horizon of the strategic plan, a plan that includes the digital transformation itself as a lever or facilitator. This transformation will contemplate both the interface with the client, with new web and mobile applications, as well as the digitalization and automation of the company’s processes.
But, in addition, we will substantially increase investment in the training of our employees and we will continue to support open innovation, increasing the information available in our open data channel, and participating in the innovation ecosystem through initiatives such as TrenLab, Renfe’s startup incubator and accelerator in collaboration with Wayra, where we share experiences and challenges with the most outstanding entrepreneurs.
Mafex Magazine: In the international arena, Renfe also stands out for the outstanding role it plays as a benchmark in know-how and as a partner in important projects such as the high-speed Medina-La Meca or the HS Houston-Dallas. What is the weight of the foreign market in its plans for the future?
Isaías Táboas: Internationalization is one of the 3 key pillars of our strategic plan, and in that sense it is a priority for the company in the coming years. Our objective is that, by 2028, 10% of the Group’s turnover will come from foreign markets. Currently, in addition to being present in the high-speed Madinah – Makkah project in Saudi Arabia and in the first phase of the private capital project that will connect Houston and Dallas, in Texas, Renfe is part of one of the three consortia pre-qualified by the UK Department of Transport to operate the WCP (West Coast Partnership) franchise that would include the future operation of high-speed services between London and Birmingham in 2026 in its first phase. In addition to these projects, Renfe is working intensively to increase its international presence, analysing business opportunities worldwide, not only for high-speed, but also for the operation of public service obligations.
Mafex Magazine: In this sense, a collaboration agreement on railway matters has just been signed with the Chinese Railways (China Railway Corporation). What objectives are being pursued with agreements of this nature?
Isaías Táboas: Out of the three levers included in the strategic plan that will help us transform the company, the development and consolidation of strategic alliances within and beyond our borders is undoubtedly one of the most outstanding novelties.
As part of this commitment, in addition to agreements to participate in consortia such as the one led by the Hong Kong operator MTR for the West Coast Partnership franchise in the United Kingdom, Renfe regularly collaborates with companies, governments and public administrations in multiple territories.
The aim of the agreement signed with China Railway Corporation is to share information and experience in railway management and development, especially in the field of High Speed. These agreements will make it possible to strengthen bilateral collaboration and explore alliances of mutual interest in third markets, such as Latin America and Asia.
Mafex Magazine: Regarding the Spanish railway industry, as a sector expert, what do you think of the Spanish business framework and its growing international presence? What is the collaboration of these companies and entities such as Renfe Operadora?
Isaías Táboas: Spanish companies are world leaders in many sectors of activity, not only the railway sector, increasing their presence in new international markets year after year. In addition, exports continue to increase, generating wealth and employment in our country.
The Spanish railway industry is at the forefront of technology and R&D, and participates in the most important projects in the world. We are one of the international references in rail transport, partly as a result of our commitment to High Speed.
As I mentioned earlier, internationalisation is one of our strategic priorities and one of the pillars of our plan. But, in addition, this plan considers strategic alliances essential to achieve our objectives as a company.
Renfe is a world leader and a benchmark regarding the operation of both high-speed and suburban rail services. The reputation and recognition of this leadership makes us a key partner for sharing and exploring international business opportunities. For Renfe, it is also an advantage to have the international experience of the Spanish business community which, for decades, has exported the reputation of our industry all over the world.