Rail freight in Portugal represents somewhat of a unicum in Europe, as there is no state-owned rail operator and a different gauge. However, just like in many other countries, the sector is struggling. RailFreight.com interviewed Miguel Rebelo de Sousa, Executive Director of the Portuguese Association of Railway Entreprises (APEF), who underlined that these differences are not the main obstacles for the industry.
The interview is divided into two parts. In the first one here below, Rebelo de Sousa discussed how the sector performed in 2024 and shared his views on the migration from Iberian to European gauge and the lack of a state-owned company. The second part will delve into the main challenges in the industry and main need of the operators.
How did rail freight perform in Portugal in 2024 compared to last year and compared to other modes of transportation?
Rail freight in Portugal underperformed in 2024, having a slight reduction compared to 2023. The sector has not recovered the volumes it had in 2018, which is a very concerning evolution. In 2018 the transport of coal was discontinued with the closure of the last coal thermal plant in Portugal.
The volume of transported cargo has increased after the pandemic years, but we need to increase it furthermore if we aim to achieve the modal shift goals set by Portugal.
Rail freight currently represents a bit more than 12 per cent of the total cargo transported, with road representing 88 per cent. The objectives set by the Portuguese government were to reach 30 per cent by 2030 and 50 per cent by 2050 and it is important to implement some measures to promote the modal shift otherwise it will not happen.
What is the plan for Portugal when it comes to transitioning from the Iberian to the European gauge?
From the point of view of rail operators, a transition to the European gauge must be very cautious as it will imply an enormous amount of investment which might not lead to a great return. It is extremely ambitious to think that it is possible to change the gauge in the entire network. It is prudent to evaluate it and to consider different scenarios, its benefits, and consequences, as well as the financing structure to support such investment. It is thus essential to include the implications for rail operators as well, since it will surely require further investments in rolling stock.
Portugal has to present an evaluation of the figures around the investment required for such a transition to the European Commission, including financing and return on investments. Moreover, the investments to be made by Portugal have to be fully articulated and aligned with Spain, as an uncoordinated approach would create the risk of building a rail island with no connection to anywhere.
I would like to emphasise that this is not a constraint for the growth of rail transport and for the modal shift to rail. We operate in an integrated network in the Iberian Peninsula, and it is not because of the shift to the European gauge in the French border that we are not competitive. Firstly, we need an electrified network capable of receiving 750 metres long trains along the Corridor with all due infrastructures prepared and capable for such operation, promoting alternatives for rail motorways services to circulate along the Atlantic Corridor.
Portugal is one of the few European countries that doesn’t have a state-owned operator (anymore). How did the market develop with only private players? Do you think rail freight can be an industry that can thrive with full privatisation?
In Portugal, the main rail freight operator was born from the privatisation of a state-owned company. I believe it has been a successful transition, and the Portuguese market demonstrates it is not necessary to have a state-owned operator for it to be developed. The market before was not stronger than today and I sincerely believe that today having a public operator does not make sense.
Nowadays, rail operators have a European footprint and a strong Iberian connection: we consider our market the Iberian Peninsula rather than just Portugal. Moreover, there are several companies that can smoothly circulate on the Iberian network, providing the required service, so there is no risk that could justify the existence of a public company to intervene in the market.