International Transportation | Collection 2020 26 The Perpignan-Figueras high-speed line A great European project that arrived in the middle of a-crisis-and in an immature environment Concession, TP Ferro, LFP, Perpignan-Figueres, High-speed line The Perpignan-Figueras high-speed line is one of the major European projects aimed at solving technical barriers and bottlenecks between rail networks. It is an interoperable line designed for mixed passenger and freight traffic, built perfectly on time. Delivered into commercial service in December 2010, it arrived in the middle of a global financial crisis and in an immature and incomplete railway environment. The situation is improving, but the line is still underutilized. Perspectives are good, but efforts are necessary, both on the infrastructure side, operators’ and on the authorities’ side, to set up regional trains. Petros Papaghiannakis T he history of the Perpignan- Figueras high-speed line stretches back in 1994. The Corfu’ (June 1994) and Essen (December 1994) European Councils endorse a list of 14 TEN-T priority projects, drawn up by a group chaired by then Commission Vice-President Henning Christophersen. Perpignan-Figueras high-speed railway line was included into this list. In addition to the environmental benefits, the socioeconomic expectations of a Perpignan-Figueras high-speed line were numerous for both passengers and freight: significant trans-Pyrenean capacity increase and drastic reduction in travelling times, boosting economic development across the Iberian Peninsula, facilitating rail-traffic between Spain and rest of Europe without gauge changes. Nevertheless, at the same time as the birth of the project, several conditions began to be met that several years later, will prevent it from developing upon its delivery to service. Indeed, at that time (1994) there was no mention of the international gauge Mediterranean corridor in Spain, yet absolutely vital. The line was seen in a radial logic along a high-speed axis Madrid-Barcelona-Perpignan, but not in its global context with a Barcelona-Tarragona-Valencia-Algeciras axis along the Mediterranean coast. One year later, on 10 October 1995, in the frame of the “Madrid Agreement”, French and Spanish governments agreed to create a new line between Perpignan (France) and Figueras (Spain). This would become the prime rail link between the two countries on the Mediterranean side, in addition to the existing conventional line close to the Mediterranean coast with the gauge-change border crossing at Cerbère-Portbou. The project would be realised under a Concession scheme, with mixed financing public-private, including design, construction, operation and maintenance. A binational Intergovernmental Commission was set up to promote the project. The first international Tender was declared unsuccessful due to the impossibility to reach an agreement with the final Bid- Photo: LFP BEST PRACTICE High-speed rail High-speed rail BEST PRACTICE International Transportation | Collection 2020 27 der. Subsequently to the second Tender (2003), the Joint Venture consisting of Eiffage and ACS/ Dragados was declared successful bidder. It is important to underline that traffic forecasts were conservative, if not cautious. This was a decisive point for the choice by the two States of the winner of the tender. TP Ferro Concesionaria S.A. was born as an ad-hoc Company and became the Concessionaire of the project. In the meantime, in 2003 following recommendations from the Karel Van Miert TEN-T workgroup, the EU Commission compiled a list of 30 priority projects to be launched before 2010 - unfortunately, still no mention about the Mediterranean corridor in Spain. The Concession Agreement was signed on 17 February 2004. It provided for five years of design and construction and fortyeight years of operations and maintenance. In round figures, the almost EUR 1.15 billion project finance was mixed and consisted of: • own equity covering about 10 % of the costs • external loans of the Concessionaire covering roughly 40 % of the costs • public subsidy covering about 50 % of the costs, out of which half of it was financed by the European Union, while France and Spain financed a quarter portion each The return on equity and loans’ amortization was planned to be achieved through toll revenues generated by the trains’ traffic. In a European level, on December 2005, the Loyola De Palacio TEN-T workgroup report made no mention about the Mediterranean corridor in Spain, despite the Concession Agreement was signed 1.5 years earlier thus ignoring strong demands of Spanish regional authorities. Obviously, still nobody in the EU had understood that the Perpignan-Figueras line had no chances of success without the Mediterranean Corridor and that both projects were vital one to each other. In this regard, it is interesting to read Mr. Josep Vicent Boira Maiques’ article dated 2006 1 , which describes the work and the efforts that were necessary from the Spanish local stakeholders, so that the Mediterranean Corridor is integrated in the TEN-T. Project finance closed on February 2005 with a pool of five major international banks. Following financial closing, the debt was syndicated with a group of another additional international financial institutions. At a first stage, project finance was achieved from 2005 to 2015. This period was called “Miniperm”. During this period, the Concessionaire had no reimbursement to do towards the Lenders, the project was re-evaluated in order to re-finance it up to the Concession end. In 2015 was beginning the re-finance for 24 years and the amortization of the debt that was supposed to finalize in 2039. The construction works began on February 2005. The infrastructure included a great amount of civil-work structure. Double track, one 8.3 km double-tube tunnel known as the “Perthus Tunnel” (see figure 1 ), two false tunnels, ten long viaducts (some of them above 600 m) of a total aggregated length of 3,000 m, one flyover for the travel side inversion (see figure 2), 14 railway bridges, 11 road bridges, 9 overpasses and 61 hydraulic and drainage works, retaining walls etc. Civil engineering and earthworks for open-air sections were completed on time by late 2007. The “Perthus Tunnel” was constructed using two tunnel boring machines (TBM). Unexpected geological conditions accounted for several extra months needed for tunnel completion and additional workforce (2 or 3 daily running shifts) to comply with the contractual schedule. Infrastructure completed perfectly-on time Despite the above, the works including testing and commissioning of the line were finally completed on 17 February 2009, perfectly on time, exactly five years after the Concession Agreement signature. Figure 1: Southern tunnel portal Source: LFP Figure 2: Northern “Perthus Tunnel” portal with flyover (background) Source: LFP BEST PRACTICE High-speed rail International Transportation | Collection 2020 28 In terms of design, the line and the Tunnel are fully compliant with the Technical Specifications of Interoperability. The line consists of two 5 km connecting tracks to the French conventional network operated at 160 km/ h and 44 km of double track operated at 300 km/ h. The alignment is designed for up to 350 km/ h operations. The track has 1,435 mm standard gauge. It is electrified by means of 25 kV AC-50 Hz overhead line. The safety system is ERTMS levels 1 and 2. However, only ERTMS level 1 has been tested and delivered to service. ERTMS level 2 is installed but not in function: it will be activated and delivered to service upon States’ request. The line is used by both passenger and freight trains (see figure 3). The capability for mixed-traffic is materialized by far less severe gradients than those of lines dedicated to high-speed trains. The stiffest gradient is limited to 18 ‰ and only along two short sections preceded by descents. The longest gradient is 10.9 ‰ stiff and 6,400 m long at the Perthus base Tunnel, that connects France and Spain below the Pyreneans. The cant is limited to a maximum value of 135 mm to allow unrestricted operation of freight trains. The maximum axle load is 22.5 t/ axle, whereas the gages allow the operation of wide and high freight trains gage, as well as rolling motorway (piggyback) trains. Simultaneous operation and crossings between high-speed and freight trains are done with no restrictions, while five sidings between Perpignan and Barcelona Port make possible the overtaking between trains. Nevertheless, despite the quality and performance of the infrastructure, several problems started popping up as of 2009. Due to construction delays in the southbound section from Figueras to Barcelona, the line remained fully operational but with no traffic during 22 months, from 17 February 2009 to 19 December 2010. This first difficulty actually foreshadowed a series of others that, six years later, led the Concessionaire to liquidation in September 2016. At a first stage, the line was set into commercial service in December 2010, with only two daily roundtrips of high-speed TGV trains between Paris and Figueras. Once in Figueras Vilafant station, passengers had to get off the train and get in another commuter train until Barcelona, through the conventional line. These temporary operations lasted two years until the delivery to commercial service of the Figueras-Barcelona high-speed line. Full operations in the entire section Perpignan-Figueras-Barcelona started in December 2012. Since the very beginning of the operations, it appeared that traffic was far below the forecasts, even though they were supposed to be conservative. High-speed trains traffic was consisting of only 4 (winter) to 7 (summer) daily roundtrips, far below public expectations. Several causes for this: • Strong competition from low-cost flights, long-distance buses and car-sharing • Lack of attractiveness of the rail offer: - mainly focusing to tourists journeys, not adapted to commuters and regional travellers - high prices - insufficient frequency (cadence): for example with 1 daily roundtrip between Barcelona, Toulouse, Marseille and Lyon, it was impossible to make a roundtrip in the same day, thus making necessary to spend one night in a hotel - inadequate schedules such as afternoon arrivals that had no interest for professional travellers • And to a lesser extent, long travel time given due to the fact that the Montpellier-Perpignan high-speed rail link was still not built Regional traffic situation was even worse: it never began! Despite explicit mentions into the Public Interest Inquiry (“DUP”), the two Regions, in their capacity of Public Regional Transport Authorities, were slow to react. None of the benefits for the regional population put forward in the Public Interest Inquiry was achieved. Table 1 compares the passenger trains foreseen in the Public Interest Inquiry, with the real situation. It is a pity, especially considering that all unrealized services are with economically powerful cities and covering distances of 400 to 700 km, the preferred distance of high-speed trains. Finally, with only 2 to 3 daily roundtrips, the situation of the freight traffic was difficult as well, but not for the same reasons. Demand was very high, but freight mainly suffered from the lack of international gauge network in Spain, along the Mediterranean coast towards Tarragona and Valencia and the associated capillary network to the ports, factories and logistics centres. In other words, the lack of the Mediterranean Corridor. International gauge tracks still extend today only down to Barcelona Port connecting Can Tunis and Morrot terminals. In other words, international gauge trains still have no possibillity to reach dozens of freight generators in Spain. Fortunately, this situation is now improving rapidly and this problem should be resolved by 2022 to 2023. Finally, thanks to strong pressure from numerous Spanish stakeholders since 2004 (Regional governments, Ports, Trade Chambers, Transporters’ associations), Mediterra- Figure 3: Freight train on a viaduct Source: LFP Public Interest Inquiry Real situation Barcelona - Toulouse Yes Done partially (only in summer time) Barcelona- Paris Yes Yes (2 to 4 roundtrips/ day) Barcelona- Brussels Yes Not done Barcelona- Marseille Yes Yes (1 roundtrip/ day) Barcelona- Lyon Yes Yes (1 roundtrip/ day) Barcelona- Genéve - Zürich Yes Not done Barcelona- Milano Yes Not done Barcelona- Nice, Côte d’Azur Yes Not done Table 1: Passenger trains foreseen compared to the real situation High-speed rail BEST PRACTICE International Transportation | Collection 2020 29 M A R M E D I T E R R Á N E O ALICANTE VALENCIA CASTELLÓN TARRAGONA MURCIA CARTAGENA Sagunto La Encina N BARCELONA PALMA DE MALLORCA Castellbisbal Martorell St. Vicenç de Calders Nudo Perafort Xàtiva Pulpí Vera Los Arejos Níjar Almussafes GIRONA CORREDOR MEDITERRÁNEO ESTADO ACTUAL - FEBRERO 2020 MÁLAGA ALGECIRAS Loja Bobadilla / Antequera Ronda GRANADA Mollet MADRID - CUENCA MADRID - ALBACETE Monforte del Cid ELCHE LEYENDA ANCHO DE VÍA ESTADO VÍA ANCHO UIC VÍA ANCHO IBÉRICO VÍA ANCHO MIXTO FASE DE EXPLOTACIÓN FASE DE EJECUCIÓN FASE DE PROYECTO Vandellós Moixent NODO PRINCIPAL El Reguerón Riquelme Vila-seca Figueres - Vilafant NODO SECUNDARIO SEVILLA CÓRDOBA Alcazar de San Juan MADRID ZARAGOZA Le Perthus Portbou Cerbère ALMERÍA Situation as of Feb.2020 Figure 4: Present situation vs. scheduled buildout Source: Spanish Ministry of Transport, Mobility and Urban Agenda Final Situation BEST PRACTICE High-speed rail International Transportation | Collection 2020 30 nean Corridor was included in the Trans- European network in 2011 under then Commissioner Siim Kallas and appeared as such in Regulations (EU) 1315/ 2013 and 1316/ 2013. The founding stone of the Mediterranean Corridor in Spain Looking into it with perspective, the founding stone of the Mediterranean Corridor in Spain was placed 17 years after the Perpignan-Figueras line! This problem caused one collateral damage: given the lack of international gauge network in Spain, the operators postponed their investments for interoperable multisystem locomotives. Therefore, since 2010 and up to now (2020) still only one operator provides traction services for freight, using few retrofitted locomotives removed from passengers’ services between Madrid and Seville. Designed for 200 km/ h passengers’ trains operating into Spain, although powerful, these locomotives suffer from technical limitations that require operating them in multiple unit (double locomotive) when entering in France, thus increasing the transport costs offered to customers. Macroeconomic and structural factors also heavily contributed to slowdown traffic development and deeply modified railways landscape. The economic and financial crisis that began in 2008 affected significantly in terms of demand of goods and mobility of people and subsequently passenger and freight traffic in Europe. Nevertheless, this was not the only consequence: • The States had less financial resources and were no longer able to finance development of infrastructures, despite having programmed and announced them • The national Railway Undertakings RENFE and SNCF were subject to very strong financial pressure to limit their deficit and therefore decided to drastically reduce passenger rail services for cost reasons Indeed, there has been a sharp change in the commercial strategy for high-speed transport services of the national railway operators. For profitability reasons and subject to strong financial pressure, these companies severely limited their offer of highspeed trains. In other words, contrary to the situation that was prevailing in the 2000’ decade, the priorities of the national railway companies changed radically from 2012. Faced with intense competition from other modes of transport and strong financial pressures, they were no longer in position to offer a plethora of high-speed services that became too expensive and decided to concentrate their offer on the most heavily frequented services. Economic failure of the concession? In summary, Perpignan-Figueras highspeed line was imagined “independent” from the Mediterranean Corridor, it arrived in the middle of a worldwide crisis and while railway environment was still immature from all points of view. All conditions were met to lead to the economic failure of the Concession. In the meantime, between 2010 and 2015, several banks, sold their portion of the Concessionaire’ debt to Hedge Funds. In 2015, Hedge Funds were holding the majority of TP Ferro’ (Concessionaire) debt. In 2015, at the time of the beginning of the re-finance process, it became obvious that the debt could not be re-financed under the initial conditions anticipated in the 2005’ finance closing. The traffics recorded on the line for both passengers and goods trains, were respectively less than 25% and less than 10% of the anticipated traffic in the Concession financial model. The financial model was robust and able to absorb deterioration of its parameters: slow ramp-ups, traffic fluctuation, inflation, delays of the international gauge infrastructures in Spain, rolling stock homologating delays, regulatory issues, ERTMS deployment delays, etc. But in this case, there was a deep and simultaneous deterioration of all the parameters of the Concession. In March 2015, the Concessionaire TP Ferro entered into an administration process and started an intensive work to find a commonly acceptable solution by all involved parties: Shareholders, Lenders and States (Spain and France). Several refinance scenarios and mechanisms were proposed by TP Ferro, but unfortunately none of those prospered. Facing the impossibility to reach an agreement, Girona’s Mercantile Court had no other choice than ordering TP Ferro’s liquidation in September 2016. Finally, on December 20th 2016, the operation of the line was entrusted to Línea Figueras Perpignan S.A. or “LFP”, a joint subsidiary of the two historical infrastructure managers, SNCF Réseau and ADIF. All the staff and management was maintained unchanged. An Operating Agreement was signed for 4 years between LFP and the two States. This Convention will be extended until December 2022. Today (2020), LFP is still operating the line according to the best practices. Its operations performance is very high, while the costs are kept at a very reasonable level. What about the future? The perspectives for the future are positive. With reference to the 2020 situation, highspeed traffic should increase by 40 % until 2026, while freight traffic (see figure 3) should be multiplied by 4 and even more. However, LFP intends remaining humble and modest, indeed, there is no big feat multiplying by several times a traffic that is currently very low. Of course, these perspectives are conditioned by the completion of the international gauge network in Spain, along the Mediterranean coast. Fortunately, since 2013 Spain is putting huge efforts on the Mediterranean Corridor, works are progressing rapidly and completion is getting closer every day. No official completion deadlines are available, especially given the covid-19 recent pandemic consequences in Spain and all around the world. According to the author’s estimate, works in the section between Castellbisbal (Barcelona area) and Tarragona would be competed in late 2022 with a delivery to service expected in 2023, while the section from Tarragona to Valencia would be completed by 2024 (see figure-4). The main challenge for the coming years will be the regional passenger trains for which a strong commitment from Regional and National authorities and Operators is necessary in order to establish new services responding to the regional and “commuters” demand. A proven solution would be to create a binational Joint Promoter whose mission would be to define the general mobility patterns for the inhabitants of the Regions and above all implement such new services. This Promoter would include all stakeholders: Regions (Catalonia and Occitanie) and Operators (SNCF and RENFE) as decision makers, with Infrastructure Managers as technical support (LFP; SNCF Réseau and ADIF). This type of mechanism called “Léman Express” was put in place successfully between France and Switzerland. In conclusion, the future looks bright - but a lot of work still needs to be done. ■ 1 available on https: / / ddd.uab.cat/ pub/ prmb/ 18883621n44/ 18883621n44p44.pdf Petros Papaghiannakis General Manager and Chief Operations Officer (COO), Línea Figueras Perpignan S.A., Llers/ Girona (ES) ppapaghiannakis@lfpperthus.com