1. STUDY ON COMPETITION IN RAILWAY FREIGHT TRANSPORT IN SPAIN ICN, Sydney, May 1st 2015 María Sobrino Ruiz Head of Market Studies Unit CNMC

2.   Interest of the Study   Lack of effective competition in rail freight market in Spain after ten years of liberalisation   Large number of studies/ position papers/ European Commission and European Parliament initiatives   European context: New Directive (Recast) and negotiations on Fourth Railway Package   Areas of interest:   Competitive situation in the Spanish Market   Restraining factors on the level of competition in the Spanish railway market  Factors related to infrastructures  Factors related to the management of railway infrastructure  Factors related to access regulation and the pursuit of the activity  Specific advantages of RENFE-Operadora (incumbent)  Inadequate institutional development of railway regulator (CRF) Interest of the Study

3. Methodology Previous investigation (competition cases, papers, other studies) Jan.12 Mar.12 May.12Jul.12 Sept.12 Nov.12Jan.13Mar.13 May.13 Press Release Meetings with stakeholders (12) Information request (49) Database Drafting the report

4. Economic characteristics of rail freight transport in Spain Renfe-Operadora is, certainly, the largest operator in the market:

5. Competitive Situation 4.Various indicators show that Spanish Railway is less efficient than other European countries DB AGRENFESNCFFS Income / Worker (F + P, mill. €)0,510,20 0,22 EBITDA / Worker (F + P, mill. €)0,060,040,010,04 Labour Costs / Income (F + P)0,290,310,440,48 Freight Income. (mill. €) / Nº Freight Wagons0,170,020,040,03 Nº Drivers / Nº locomotives (F + P)3,629,143,973,70 Nº Drivers (M + P )/ Nº Freight Wagons0,170,370,590,35

6. Recommendations   First: The cost-benefit analyses as part of planning rail infrastructure in Spain and of investments must incorporate factors relating to their impact on effective competition in the market.   Investments that promote interoperability with other European countries   Investments that promote access to ports   Second: Improving traffic management   To give priority to economic criteria in allocating capacity where there is congestion   Introducing penalties for reserving unused capacity   Third: Improving terminal management   To make terminal opening dates and timetables more suited to the needs of the rail companies   To increase transparency and access to up to date information about all logistics terminals, both public and privately-owned

7. Recommendations   Fourth: To adjust access in line with the principles of necessity, proportionality, transparency and non-discrimination   The requirements laid down for obtaining railway undertaking company licenses and safety certificates should be made simpler, cheaper and more flexible   To make the requirements laid down for the approval of rolling stock simpler, cheaper and more flexible   Fifth: To improve the design of charges   Transparent methodology   To simplify charges and introduce criteria for imposing penalties for non-utilisation of reserved capacity   To abolish or change the structure of the access charge

8. Recomendaciones   Sixth: To make RENFE-Operadora more independent of the Ministry of Development and infraestructure management   To ensure that RENFE-Operadora is not attached to the same body as the system regulator or the infrastructure administrator   To ensure that RENFE-Operadora is autonomous and financially self-sufficient   Eighth: To make the provision of railway services independent of all other related activities within RENFE-Operadora   To make the companies which sell and lease rolling stock and maintain and repair of rolling stock independent from RENFE-Operadora in legal, accounting and functional terms   Transparent sale and leasing prices and non-discriminatory access by third parties to rolling stock currently owned by RENFE-Operadora   Ninth: Strengthening the rail regulator (CRF)   Legal personality, financial autonomy and sufficient material and human resources to fulfil its responsibilities   Increase competences