Supporting Better Decision‑Making in Transport Infrastructure in Spain

1. Institutional context and trends of infrastructure investment

Infrastructure is one of the backbones of both productivity and inclusiveness: firms derive much of their competitive edge from their ability to use modern infrastructures, while societies depend on good infrastructure to ensure equal opportunity and access to services for citizens. Nevertheless, infrastructure has always been difficult to get right. Apart from the technical challenges, poor governance of infrastructure is a major reason that infrastructure projects fail to meet their timeframe, budget, and service delivery objectives. Substantial benefits can be attained by better infrastructure governance.

This review presents an analysis of the decision-making process in Spain, in order to ensure that the selected investments can provide adequate value for money for the Spanish economy. The assessment includes examples of practices in Spain and considers whether the Spanish institutions and regulations veritably foster efficient and effective investment decisions and implementation of good practices.

The first chapter presents trends in transport infrastructure in Spain over the period of 2000-2018, providing an international comparison between infrastructure investment in Spain and other countries in the Eurozone. Additionally, it presents the institutional context underlying transport infrastructure investment decisions, which will support the analysis of Chapter 2 (Evaluation of Legal Framework) and Chapter 3 (Evaluation of the Decision-Making Process) of this review.

Trends in transport infrastructure investment

After a boost in transport infrastructure, investment has steadily decreased in Spain

Before the 1990s, Spain lagged the rest of Europe in the provision and intensity of transport infrastructure. Important efforts to close this gap brought about rapid growth in transport infrastructure investments from the 1990s to the first decade of the 2000s. During this period, Spain invested a larger share of its GDP in transport infrastructure than the average Eurozone country. However, the financial crisis in Spain between 2008 and 2014 resulted in austerity policies that negatively affected the rate of investment in transport infrastructure. After 2008, the country suffered a sharp drop in investments of almost one percentage point (p.p.). of GDP, from 1.6% in 2009 to 0.51% in 2017 (Figure 1.1). Countries such as Estonia, Greece, Finland, Latvia, Lithuania, the Slovak Republic and Slovenia have displayed a significant increase in investments in transport infrastructure from 2014 onwards, despite countries like France, Germany and Italy seeing a decrease in their investments during the same period (International Transport Forum, 2018[1]).

Figure 1.1. Inland transport infrastructure investment in Spain and Eurozone countries

As % of GDP

Note: Values for Eurozone have been averaged using as weigh factor each country’s yearly GDP as a ratio of the aggregate yearly GDP of all 19 Eurozone countries. No data available for Cyprus; no data available for the Netherlands from 2012 onwards; no data available for Ireland from 2008 onwards; no data available for Luxembourg from 2016 onwards; no data available for Austria for 2017; no data available for Portugal for 2011 and 2014 onwards; no data for Malta from 2015 onwards.

Source: (International Transport Forum, 2018[1]) (OECD, 2019[2])

Spain has made large investments in railway infrastructure in comparison to Eurozone countries

Over the past 19 years, Spain has successfully rolled out many of the key investments in the country’s railway infrastructure network. During the 2000s, the average investment in rail infrastructure in Spain far exceeded the average for Eurozone countries (Figure 1.2). Specifically between 2006 and 2011, Spain invested in rail more than any other country in the Eurozone (International Transport Forum, 2018[1]), reaching a peak in 2009 with investments equivalent to 0.8% of GDP. However, investments financing in rail infrastructure in Spain plummeted between 2011 and 2013 and continued to decline steadily until 2016. Meanwhile, Eurozone countries increased investment of resources in rail infrastructure from 2013 onwards; in particular large investments have been made by Lithuania, Latvia, Slovenia and Luxembourg.

Spanish investment in rail displayed a positive growth rate in 2017, and reached the average investment rate of Eurozone countries. With the largest projects in railway infrastructure already concluded in Spain, it is not likely that the levels of investment in rail infrastructure will reflect phenomenal growth like what was seen in the second half of the 2000s, but instead should remain steady and closely follow the Eurozone average investment levels.

Figure 1.2. Rail infrastructure investment in Spain and Eurozone countries

Note: Values for Eurozone have been averaged using as weigh factor each country’s yearly GDP as a ratio of the aggregate yearly GDP of all 19 Eurozone countries. No data available for Malta and Cyrpus; no data available for the Netherlands from 2012 onwards; no data available for Ireland from 2008 onwards; no data available for Luxembourg from 2016 onwards; no data available for Austria for 2017.

Source: (International Transport Forum, 2018[1]) (OECD, 2019[2])

Investments in Spain were heavily biased towards rail between 2004 and 2013, in contrast to other Eurozone countries. Whilst the share of railway infrastructure in total inland transport infrastructure investments was around 30% to 40% in Eurozone countries, Spain invested more than half of its infrastructure investment budget on rail. In spite of the large investments made by the Spanish government, in 2016 the density of its railway network (3.1 km per hundred sq. km) was still below countries in the Eurozone with similar territorial extensions and demographics, such as France (5.3) Germany (9.6), Italy (5.7) (International Transport Forum[1]). Nevertheless, by 2016 Spain had the highest share of high-speed rail lines amongst all four countries; while high-speed rail lines accounted for 16% of the total rail network in Spain, France reported 7.4%, Italy 5.4% and Germany only 3% of its network (International Transport Forum[1]).

Investments in road infrastructure are no longer a priority

Road infrastructure investment in Spain was well above the Eurozone average until 2012 (Figure 1.3), although it remained less than rail. By 2009 investments in road infrastructure in Spain were in steep decline and have continuously displayed negative growth rates ever since, reaching their lowest point in 2017. Unlike Spain, the average investment in road infrastructure has increased in recent years among the Eurozone countries, with the largest investments implemented by Estonia, Greece, Latvia, Lithuania and the Slovak Republic (International Transport Forum[1]). However in 2017 Spanish road infrastructure investments remained slightly above the Eurozone average.

Figure 1.3. Road infrastructure investment in Spain and Eurozone countries

Note: Values for Eurozone have been averaged using as weigh factor each country’s yearly GDP as a ratio of the aggregate yearly GDP of all 19 Eurozone countries. No data available for Cyprus; no data available for the Netherlands from 2012 onwards; no data available for Ireland from 2008 onwards; no data available for Luxembourg from 2016 onwards; no data available for Austria for 2017; no data available for Portugal for 2011 and 2014 onwards; no data for Malta from 2015 onwards

Source: (International Transport Forum, 2018[1]) (OECD, 2019[2])

Resources that were originally destined to road infrastructure investment in Spain were gradually shifted to rail from the early 2000s (Figure 1.2 andFigure 1.3). Conversely, Eurozone countries invested on average more resources in road infrastructure than in railways, and have displayed rather steady investment levels throughout the last two decades. In recent years the share of investments in road infrastructure as a percentage of total investments in infrastructure in Spain has increased and exceeded the Eurozone average.

Spain still faces inter-modality challenges in freight transportation

Despite of the large investments made in railway infrastructure, road freight transportation is significantly higher than that of rail in Spain (Figure 1.4). Road freight transport has continuously grown throughout the last two decades, starting from 101 874 million tonnes-km in 1995 to 238 991 million tonnes-km in 2018 (International Transport Forum, 2018[1]). Germany is the only country in the Eurozone that exceeds Spain in road freight transport, with 316 767 million tonnes-km in 2018 (International Transport Forum, 2018[1]). Inversely, by 2016 rail freight transport in Spain had not even exceeded the initial levels displayed back in 1995. While Spain transported 10 644 million tonnes-km by rail in 2016, countries like Germany, France and Italy were transporting 128 296, 32 569, and 22 712 million tonnes-km, respectively (International Transport Forum, 2018[1]).

Figure 1.4. Modal split of freight transport in Spain and Eurozone countries

Note: Values for Eurozone have been averaged using as weigh factor each country’s yearly GDP as a ratio of the aggregate yearly GDP of all 19 Eurozone countries. The indicator is defined as the percentage of each inland mode in total freight transport performance measured in tonne-kilometres. Inland freight transport modes include road, rail and inland waterways.

Source: (Eurostat, n.d.[3]) (OECD, 2019[2])

On average, countries in the Eurozone rely less on road infrastructure for freight transport and display higher levels of inter-modality than Spain. While the share of railway in total freight transport in Spain has remained stagnant at around 5%, the average in Eurozone countries is around 14% (Figure 1.4). These figures are relevant when compared to the substantially large investments made by Spain in railway infrastructure, particularly in comparison to Eurozone countries. Given that Spain has already expanded its railway network, the challenges that the country currently faces could potentially be a result of the lack of inter-modal strategies to strengthen the use of railway for freight transportation, rather than insufficient investments in rail infrastructure.

Passenger transport remains dominated by road infrastructure

Inter-modality levels in passenger transport in Spain are similar to the average of Eurozone countries (Figure 1.5). Although the investment in railway infrastructure has not significantly increased the share of rail in total passenger transport, the use of rail in Spain has risen from 16 594 million passenger-km in 1995 to 27 516 million passenger-km in 2017 (International Transport Forum, 2018[1]). Interestingly, even though Spain has the largest share of high-speed rail lines, rail passenger transport is still lower than other countries in the Eurozone. If compared to countries like France, Germany and Italy, which in 2017 transported 110 469, 95 530 and 53 231 million passenger-km (International Transport Forum, 2018[1]), rail passenger transport in Spain still has more room for growth.

Figure 1.5. Modal split of passenger transport in Spain and Eurozone countries

Note: : Values for Eurozone have been averaged using as weigh factor each country’s yearly GDP as a ratio of the aggregate yearly GDP of all 19 Eurozone countries. The indicator is aimed at monitoring the dependence of passenger transport on each individual mode. The indicator is expressed as the percentage of passenger transport by car, buses and coaches, and trains respectively in total inland passenger transport (measured in passenger-kilometres).

Source: (Eurostat[3]) (OECD, 2019[2])

Spain displays high levels of quality infrastructure investments

Quality of infrastructure investments is critical to ensuring that infrastructure fulfils its potential as a catalyst for growth and development. In addition to large investments, Spain also displays high levels of quality transport infrastructure (Figure 1.6). In terms of road density and airport connectivity in particular, Spain is scored with the highest mark according to the World Economic Forum Competitiveness Index. Road quality and efficiency of airport transport services also score above the average of Eurozone countries. Likewise, in 2016 Spain had completed almost 100% of the road infrastructure length established by the EU under the TEN-T Road Core Network programme (European Commission, 2019[4]). Spain also scores way above the Eurozone average in terms of liner shipping connectivity and it is close to average in respect to the efficiency of seaport services.

Regarding railways, on average Eurozone countries display a higher score for trackdensity, but efficiency in train services in Spain scores higher than average within the Eurozone. In terms of completion of rail network works, in 2016 Spain completed 100% of the length indicated under the TEN-T Conventional Rail Network programme, albeit that only 41% of the total length indicated under the TEN-T High Speed Rail Core Network was built. In terms of the TEN-T High Speed Rail Core Network, Spain ranks below Belgium, Finland, Netherlands, Germany, Greece, France and Italy (European Commission, 2019[4]).

Figure 1.6. Quality of transport infrastructure in Spain and Eurozone countries

Note: Scores are on a 0 to 100 scale, where 100 represents the optimal situation or 'frontier'.

Source: (World Economic Forum, 2018[5])

Institutional Setting

Over the past few decades, Spain has invested a large amount of resources to improve the provision of transport infrastructure. Projects have been implemented effectively and the Spanish authorities have developed strong technical capacities. Despite these strengths, the Spanish institutional setup and legal framework is fragmented across different modes of transport, making strategic planning, needs assessment and prioritisation unnecessarily complex. Moreover, lines of accountability for infrastructure investment could be better defined and monitored. These aspects represent an additional complexity for strategic planning, needs assessment and prioritisation.

Ministry of Transport, Mobility and Urban Agenda

The Ministry of Transport, Mobility and Urban Agenda (Ministerio de Transporte, Movilidad y Agenda Urbana, MITMA)1 plays a central role in policy-making, strategic planning, prioritisation, project evaluation and monitoring of transport infrastructure.

Although the Ministry of Finance sets the investment ceiling for the MITMA as well as a number of limitations for budget setting, the MITMA has extensive sway over budget allocation across projects, modes of transport and decentralised entities. Later stages in the life cycle of infrastructure projects, such as delivery, administration and operations are decentralised (Box 1.1). These functions are assigned at the national level to administrators and operators under the MITMA, and at the subnational level to autonomous communities. Furthermore, the institutional setup is also siloed by sectors (e.g. roads, seaports, railways and airports) both at central and decentralised levels.

The Secretary of State of Transport, Mobility and Urban Agenda exerts ample political power over transport policy and infrastructure investment decision-making. Critical decisions over the implementation of the transport infrastructure strategic plans, as well as those that directly concern project formulation, prioritisation and budgeting, remain under the scope of the Secretary of State and its cabinet, directly in the case of national roads and railway sectors and through its functionally dependent entities and SOEs in the case of airport and seaport sectors.

Even though there are cross-sectoral and multi-level co-ordination mechanisms available (i.e. Conferencia Nacional de Transporte, foro de estrategia logística), these forums are underused by the MITMA. Nonetheless, these institutions that have been created are expected to play an important role in the infrastructure investment cycle.

Transport, Mobility and Urban Agenda Council

The Transport, Mobility and Urban Agenda Council (Consejo Asesor de Transportes, Movilidad y Agenda Urbana, former Consejo Asesor de Fomento) is a council made up of experts in the infrastructure, transport and housing fields, and it was created to advise the MITMA on issues regarding infrastructure planning and co-ordination between public and private sectors in infrastructure projects. In compliance with the recommendation from the EU to establish an independent body in charge of evaluating high-profile investment projects, and collaborate on the selection of infrastructure investments, the Transport, Mobility and Urban Agenda Council was created in 2015.

There are a range of topics upon which the Transport, Mobility and Urban Agenda Council advises the MITMA. Existing sectorial regulation requires the Transport, Mobility and Urban Agenda Council to assess PPP investment proposals in road infrastructure. Likewise, prior to the adoption of a road or railway infrastructure plan, the Transport, Mobility and Urban Agenda Council has to furnish a report on the proposed draft. The Council can also review topics that are of particular interest and report back to the MITMA. A few examples include the work accomplished on methodologies for infrastructure planning, implementation of European legislation in Spain and safety and security in infrastructure. However, the decisions reached by the Council are not binding for the MITMA. Furthermore, meetings and deliberations of this body are not publicly available (although they might be accessible upon citizens’ request).

Box 1.1. Ministry of Transport, Mobility and Urban Agenda

The MITMA undertakes infrastructure planning, budget proposal and oversight through the Secretary of State of Infrastructure, Transport and Urban Agenda and three Secretaries-General: one for infrastructure, one for transport and the last for housing. The Secretary of State is also responsible for monitoring and overseeing the performance of public operators and administrators of transport infrastructure.

 

 

 

Source: (Ministerio de Política Territorial y Función Pública, 2020[6])

Sector-based institutional arrangements

Decentralised entities under the supervision of the MITMA typically perform the administration and operation of transport infrastructure in the country. Public administrators are state-owned enterprises (SOE) that manage construction, delivery and maintenance of transport infrastructure projects, either directly or through contracting out to private sector companies. Public administrators in Spain are also responsible for managing the tariffs and contributions to be paid for the use of public infrastructure. Public operators, on the other hand, are in charge of the provision of transport services and are under the surveillance of national regulators.

The institutional setup is not homogenous across modes of transport and the different arrangements that can be observed from sector to sector will be examined in the following section. Indeed, whilst road infrastructure remains under the direct control of the MITMA, other transport sectors are managed instead by decentralised administrators and operators. Furthermore, these differences also respond to the liberalisation of a few transport sectors in the Spanish economy, such as the air transport and railway freight transport sector.

Road Infrastructure

Road infrastructure network in Spain is comprised of 165 624 km of roads, 26 403 km of which are under direct administration of the MITMA and are known as the National Road Network (Red de Carreteras del Estado), 71 313 km are under the administration of autonomous regions and 67 908 km are managed directly by provinces (MITMA, 2018[7]). Municipalities also manage 489 698 km of urban and inter-city roads (MITMA, 2018[8]). Only 10% of the infrastructure MITMA is responsible for is currently managed and operated via concession agreements awarded to private developers (Ministerio de Fomento, 2018[9]) and the Directorate-General of Roads is responsible for overseeing the performance of these concessions. The Directorate-General is also in charge of the construction and maintenance of the remaining national roads not granted under these schemes.

Since 2005, the Land Transport Infrastructure Company (Infraestructuras de Transporte Terrestre S.A. -SEITT), a SOE functionally dependent on the MITMA, has been responsible for the public tendering and oversight of contracts for the construction of a limited number of national roads. Since its creation, the MITMA and SEITT have entered into a number of different agreements for the construction of roads funded by the national government as well as European funds (Ministerio de Fomento and SEITT S.A., 2015[10]). The roads constructed under these agreements are subsequently transferred to the MITMA for their operation and maintenance (Ministerio de Fomento and SEITT S.A., 2015[10]).

In 2017, nine toll-road concessions declared bankruptcy and were reverted by private concessionaires to the national government before the completion of the concessionary periods. The Council of Ministers agreed to assign the management of these toll-roads to SEITT until 2022. At the moment, it is still unclear which entity will continue to manage the nine toll-road concessions temporarily assigned to SEITT or the remaining toll-road concession agreements that are near completion, especially as the most recent governments have shown a consistent lack of interest in the renewal of these agreements (Ministerio de Fomento, 2018[9]).

Railway Infrastructure

The institutional setup in the railway sector has had a number of important reforms during the last decade. The railway network was initially managed by the SOE named Red Nacional de los Ferrocarriles Españoles (RENFE) from 1941 until 2005. Red Nacional de los Ferrocarriles Españoles was wound up in 2005 and two newly created SOEs under the MITMA adopted the management of the infrastructure and the operation of railway transport services: Administrador de Infrastructuras Ferroviarias (ADIF) was entrusted with the management of railway infrastructure and RENFE-Operadora undertook the provision of railway transport services.

ADIF split into two separate entities in 2013 in order to transfer the high-speed rail infrastructure to ADIF Alta-Velocidad (ADIF-AV). Although operationally ADIF and ADIF-AV collaborate as one entity, their funding derives from different sources. ADIF is mainly funded by fiscal transfers from the national government and user fees, but can also receive European funds. ADIF-AV is only partly funded by the government, with the rest of its funding coming from user fees, debt, bonds and resources from the EU. Although the ADIF-AV is considered a public non-financial corporation under the European System of National and Regional Accounts, its deficit and public debt levels are not consolidated in the national accounts and are thus kept as off-balance sheet liabilities.

RENFE-Operadora, the public operator of railway transport services, has a monopoly over passenger transport services and competes with private operators in the freight transport sector. However, the liberalisation of the rail passenger transport services in the European Economic Area (Box 1.2), which will take place in 2020, is expected to pose challenges for strategic planning and for the long-term sustainability of RENFE-Operadora. Likewise, it could also affect the profitability of conventional rail infrastructure.

Box 1.2. Single European Railway Area

From 2012 onwards the EU has progressively adopted a series directives to establish a single European railway area and an EU internal market for rail. One of the main objectives of this programme is to achieve a more competitive and efficient rail industry vis-à-vis other modes of transport, by opening up national freight and passenger markets to cross-border competition.

The process of railway markets’ liberalisation in the EU has gradually taken place, starting with the liberalisation of rail freight services in 2007. Under Directive (EU) 2016/2370, the EU set forth the obligation of all member states to ensure the right of access to railway infrastructure for the purpose of providing rail passenger services under market conditions from December 2020 onwards.

In addition to the liberalisation process, the EU has undertaken a process of harmonisation of the regulation on governance of railway infrastructure, managers and operators. As a result, national rules on railway infrastructure have significantly being replaced by EU Directives as a way to reduce the risk of insufficient transparency and discrimination towards new rail operators. This is expected to reduce administrative costs and additional burdens for railway undertakings that wish to operate across Europe, and further boost competitiveness of the railway sector in the single European railway area

Source: (European Parliament, 2016[11])

Airport Infrastructure

After the liberalisation of air transport services that took place in Europe during the late 1980s, the airport infrastructure sector in Spain underwent a series of reforms that led to its partial privatisation in 2014. Since 1958, the National Airports Autonomous Body (Organismo Autónomo de Aeropuertos Nacionales), a public body under the former Ministry of Transport, Tourism and Communications, was in charge of air infrastructure and navigation services. The first substantial reform came in the early 1990s, when these functions were reallocated to a newly created SOE under the Ministry of Transport, Tourism and Communications, known as Aeropuertos Españoles y Navegación Aérea (AENA). This SOE was responsible for the management and operation of airport infrastructure as well as civil air navigation services. Subsequently, in 2011, the government adopted an additional reform and dictated the incorporation of a subsidiary enterprise, Aena Aeropuertos S.A., which took over the management and exploitation of airport infrastructure. Finally, in 2014 the government authorised the privatisation of 49% of the shares that Aeropuertos Españoles y Navegación Aérea owned in Aena Aeropuertos S.A., and renamed both corporations as ENAIRE and Aena S.A., respectively. In April 2017, the abbreviation S.M.E. was added to indicate its status as a state-owned company. Within the current structure, both ENAIRE and AENA S.M.E., S.A (hereafter AENA), are situated under the MITMA.

The airport infrastructure and civil air services model adopted in Spain after 2011 was a response adopted to improve financial sustainability of investments in airport infrastructure. Throughout the 1990s, ENAIRE (formerly Aeropuertos Españoles y Navegación Aérea) made a radical shift in its business model to keep up with the demand for airport infrastructure and competition brought about by the liberalisation of air transport services in the EU. However, the profitability and value for money of infrastructure investments in airports located in remote areas of the country were largely questioned (European Court of Auditors, 2014[12]). The decision to create AENA as an independent body to promote private investments in, and operation of, individual airports through concession agreements was precisely aimed at increasing efficiency and ensuring financial sustainability of airport infrastructures in Spain. Since ENAIRE and AENA receive their funding from user fees and revenues, this has also ensured their independence from political cycles during the process of budget formulation and execution, especially in the case of AENA after its partial privatisation. Currently, AENA manages 46 airports and 2 heliports in Spain and has direct and indirect shares in other 23 airports: one in Europe and 22 in the Americas, and has an ample offer of commercial areas.

Seaport Infrastructure

National seaport infrastructure in Spain is managed by 28 independent public port authorities, co-ordinated by Puertos del Estado, a SOE under the MITMA. These port authorities have adopted a landlord model, where they own the basic infrastructure and lease it to private operators while retaining functions related to regulation and promotion of businesses and value-added services to port stakeholders (Puertos del Estado, 2019[13]). Similar to the case of airport infrastructure, port authorities and Puertos del Estado receive the bulk of their funding from user fees.

Under the co-ordination of Puertos del Estado, port authorities collectively participate in the governance of the seaport system, with shared strategic plans and objectives. Port authorities also have pooled resources for infrastructure projects and maintenance costs in an inter-port compensation fund (Fondo de Compensación Interportuario). Efforts to improve inter-modality across rail, road and port infrastructure have been led by port authorities in recent years. Port authorities collaborate with the corresponding authorities to provide funding and operate railway and road infrastructure that connects seaports with urban areas and the rest of the country as a whole.

Ministry of Finance

The Ministry of Finance (MOF) is responsible for the definition of the national budget, as well as the establishment of investment thresholds and standards for budget formulation. Through its General Budget Directorate (Dirección General de Presupuesto, DGP), the MOF co-ordinates the formulation of the budget bill across the different entities at the national level. The DGP does not perform an allocation of resources, but performs an analysis of the economic impacts of public expenditure and investment policies and programmes formulated by each ministry, making sure that these are coherent with medium-term economic forecasts and fiscal stability goals previously defined by the EU.

Ex-ante and ex-post control over future commitments is exercised by both the DGP and the General State Controller (Intervención General de la Administración del Estado, IGAE), respectively. The IGAE is an entity under the MOF responsible for controlling the economic and financial performance of the public sector, and auditing public spending. The IGAE evaluates the projects’ alignment to fiscal principles of legality, economy, efficiency and efficacy, as well as availability of its resources for capital investment.

Budget execution and the use of public-partnerships and European Union funds is audited by the IGAE through the National Audit Office (Oficina Nacional de Auditoría), an internal audit body of the executive. The National Audit Office exercises rigorous scrutiny over accounting of public expenditure and public deficit levels. Furthermore, it performs a quarterly report on decentralised entities’ accounting statements (i.e. ADIF-AV) to ensure compliance with public debt and public non-financial corporation ratios.

National Commission on Markets and Competition

The National Commission on Markets and Competition (Comisión Nacional de los Mercados y la Competencia, CNMC) is in charge of ensuring effective competition in markets and productive sectors of the economy, and has been explicitly entrusted, inter alia, with the regulation of railway and air transport services. Nonetheless, the CNMC has no explicit mandate to regulate or oversee transport infrastructure investments. Regarding railways in particular, the CNMC must ensure competition amongst public and private operators and oversees negotiations to take place between operators and ADIF or ADIF-AV. The CNMC also plays a role in foreseeing potential circumstances where returns in railway services contracts might be affected by the provision of international railway services. Furthermore, the establishment or modification of airport tariffs in accordance with existing regulation is supervised by the CNMC. Disputes between railway or airport administrators and transport services providers are also under the scope of the CNMC.

The National Evaluation Office

The National Evaluation Office (Oficina Nacional de Evaluación, ONE) was initially created in 2015 as a unit under the MOF and was entrusted with the task of analysing the financial sustainability of the infrastructure concession agreements to be entered into by the central government. Autonomous regions can either voluntarily grant authority to the ONE to conduct these analyses or create authorities within their own jurisdictions to perform this function. Since 2015, the ONE has been in charge of evaluating and providing a mandatory report prior to the tendering of concession agreements if the investment exceeds EUR 1 million or if the construction or exploitation of infrastructure under the concession agreement requires the allocation of public resources or provides any other financing mechanism to the concessionaire. For the preparation of these mandatory reports in subnational public procurement, each regional government can create its own evaluation office or opt-in to be under surveillance of the ONE. Under the most recent public contracts legislation, the ONE has been relocated to be under the remit of the recently created Independent Office for Public Procurement Regulation and Surveillance. Despite of its creation more than five years ago, this unit has not yet fully entered into force (Oficina Independiente de Regulación y Supervisión de la Contratación, 2019[14]).

Independent Office for Public Procurement Regulation and Surveillance

Following the adoption of the EU directive on public contracts and public procurement, the Spanish Government created the Independent Office for Public Procurement Regulation and Surveillance (Oficina Independiente de Supervisión y Regulación de la Contratación Pública, OISRCP) as an independent body charged with the oversight of the public procurement process and the overall life cycle of public contracts. The OISRCP initiated activities in January 2019 and has issued one annual supervision report for the 2019 period (Oficina Independiente de Regulación y Supervisión de la Contratación, 2019[14]; Oficina Independiente de Regulación y Supervisión de la Contratación, 2019[15]). The entity is expected to ensure the integrity, transparency and compliance with public procurement regulation and furnish a report to the European Commission every three years. The OISRCP will be responsible for the formulation of a four-year National Public Procurement Strategy that will include good practices to improve public procurement processes in Spain. The OISRCP is also expected to conduct preliminary evaluations of the financial feasibility of construction and concession agreements through the ONE.

Autonomous regions, provinces and municipalities

Spain is politically divided into autonomous regions and autonomous cities, provinces and municipalities. As a decentralised unitary state, sub-national governments in Spain enjoy a high level of autonomy and responsibility in providing public services, assuring public investment, and supporting regional and local development. The degree of municipal economic, financial and institutional autonomy varies across and within the different levels of subnational governments. Depending on the autonomous region, municipalities have different responsibilities, organisational structures, and financial arrangements.

Autonomous regions (Comunidades Autónomas, CCAA) constitute the highest level of decentralised sub-national governments in Spain, financially independent from the national government. CCAA are free to allocate budgets and develop infrastructure projects within their jurisdictions. In terms of rail and road infrastructure, the national government has control over infrastructure assets that span more than one CCAA, as well as other infrastructures of general interest. On the other hand, CCAA only control the administration of railway and road infrastructure within their own jurisdictions.

CCAA play an important role in the management of the road network in Spain, especially considering that the investment in road infrastructure within the jurisdiction of each CCAA is exclusive to the corresponding sub-national government. CCAA manage 71 313 km of the road infrastructure in Spain, and where the national government has awarded the administration of 2 457 km under concession agreements, CCAA have only awarded 329 km of toll roads under concession agreements (Ministerio de Fomento, 2018[9]).

Within each CCAA, provinces and municipalities are the second and lowest level of decentralised sub-national governments, respectively, financially independent, and have the autonomy to manage the provision of public services within their own jurisdictions. Each CCAA is entitled to establish its own institutional framework for transport infrastructure and transport public services at the provincial and municipal level. In terms of road infrastructure, provinces are in charge of managing 67 908 km of the road infrastructure in Spain and municipalities manage 489 698 km, comprised mainly of those classified as urban road infrastructure due to their high levels of urban traffic (Ministerio de Fomento, 2001[16]; MITMA, 2018[8]).

In specific cases the central government provides financial and technical assistance for the execution of infrastructure projects at the subnational level, by means of collaboration agreements with the corresponding regional government. This is the case for the development of high-speed railway infrastructure projects in regional and metropolitan areas for example. Different arrangements between the central government, ADIF, CCAAs and specific municipalities resulted in the incorporation of investment vehicles where ADIF remains a minority shareholder (some examples of investment vehicles are Cartagena Alta Velocidad S.A., Murcia Alta Velocidad S.A., Alicante Alta Velocidad S.A., Valladolid Alta Velocidad S.A., Zaragoza Alta Velocidad S.A., Barcelona Sagrera Alta Velocitat S.A., Barcelona Regional, Vitoria Alta Velocidad S.A., and Almería Alta Velocidad S.A.) (Intervención General de la Administración del Estado, 2018[17]).

Note

← 1.  Following the formation of the new Government in January 2020, the former Ministry of Public Works (Ministerio de Fomento) was renamed Ministry of Transport, Mobility and Urban Agenda, keeping its functions and responsibilities in terms of transport infrastructure.