Renfe

   The Spanish state-owned railway company Red Nacional de Ferrocarriles Españolas (Renfe) was created by law in January 1941 to run the standard gauge railway system, which was nationalized under the same law. Renfe inherited a system with fundamental weaknesses, exacerbated by the destruction caused during the Civil War and years of under-investment. From the beginning Renfe began to accumulate losses, inflated by the paternalistic nature of this public enterprise monopoly, leaving the company with substantial debt payments. From the late 1970s the company has sought to reduce operating losses through rationalization and modernization.

   Rationalization has included the closure of lines and reductions in services. The labour force has been cut from around 140,000 in 1950 to close to 36,000 in 1998. Finally, the substantial property portfolio of Renfe has been mobilized through, for example, the development of office and retail space at railway stations, the release of land for nonrailway use (including housing) and the provision of new services such as telecommunications. In 1994 Renfe was reorganized into distinct operating divisions, some of which could be floated off in a process of partial privatization. Private capital has played a role in the railways for some time, for example in the supply of rolling stock (from both national companies such as Talgo and CAF, and from foreign multinationals such as GEC-Alsthom and Siemens, which provided much of the technology and rolling stock for the High Speed line, AVE), in providing specialist services (for example Wagon Lits had a contract with Renfe to operate sleeping car services from 1967 until the contract was taken over by the French Accor group in 1994), and even in the running of specialist freight trains. As with many other public enterprises, the government has tried to encourage increased efficiency by tying subsidies to the achievement of performance targets through "contract programmes". Where lines are uneconomic and justified only by their public service role, Renfe has sought to secure funding and operating assistance from regional governments. Against a background of privatization and public expenditure restraint in the last decade of the twentieth century, it is probable that private finance will play an increasing role in the activities of Renfe and that mechanisms will be found to increase competition.

   See also: transport

   Further reading

   - Ferner, A. (1988) Government Managers and Industrial Relations. Public Enterprises and their Political Environment. A Comparative Study of British Rail and Renfe, Oxford: Basil Blackwell (discusses industrial relations in Renfe prior to the late 1980s).

   - Wais, F. (1987) "Los años de la Renfe", in Historia de los ferrocarriles españoles, 3rd edn, vol. 2, Madrid: Editora Nacional por la Fundación de los Ferrocarriles Españoles (deals with the emergence of the company).

   KEITH SALMON