On the Wings of Hope

AVE at Sants Station

This essay ponders the interplay of risk, debt and optimism, with specific reference to the expansion of Spain’s high speed railway network. It summarises the renaissance of AVE expansion, reconciling different approaches to risk in the construction of transport infrastructure. The interaction of external finance within the Spanish societal structure is hypothesised as reliance on external debt with no internal counter-balances – a virtual economy characterised as Gross Domestic Optimism. The postscript asks what it means to invest in state, with reference to two evolving models – people and perception.

“On the Wings of Hope” is the final essay in a sequence of four titled, “The Art of Public Competition“, which together explore the competitive model underlying Spanish public transport. An anthropological analysis of the tension between this internal model and that of globalised economics, reveals the distortion of external finance on the internal workings of the art of public competition. The first essay in the sequence establishes the policy context for the liberalisation of public transport in Spain. The second explores the workings of the art of public competition using the example of interurban buses around Barcelona. The third examines how the art of public competition functions when one of its most important competitors is absent, using the case of post-Independència Catalunya.

AVE or Bust

Given all that has so far been described in this sequence of essays, it should be self-evident that grand public infrastructure, of the type Catalans and Spaniards came to expect in the early 2000s, can no longer be funded publicly. That the Generalitat de Catalunya’s post-Independència hiatus merely emphasised a reality first exposed by the 2008 Crisis. There is some evidence that the Generalitat, the regional government of Catalunya, had already shifted policy prior to the Referèndum, for example its 2017 proposal to replace the tolls levied on users of recently built strategic roads (those still under concession), with an annual “vignette” (tariff) paid by motorists for access to all such roads – which would generate a constant revenue stream with which to fund subsequent network development. With half these roads still administered centrally by Spain, Catalan policy would have to be shared with the Spanish government, which is itself deciding whether to maintain tolls when concession periods end. The 131st President of the Generalitat‘s personal commitment to the non-payment of tolls during 2012’s #NoVullPagar campaign, highlights how road tolls are a thorny issue in Spanish politics, not least in the wake of the recent financial failure, and consequent government rescue, of several high-profile highway concessions around Madrid. Funding the construction of new roads via private toll-raising concessionaires is broadly accepted (even if only by historic precedent), while perpetuating tolls on roads that are ostensibly already paid for resembles state taxation (even if the proceeds are hypothecated into transport projects). The resulting shift between private and public sectors has complex, long-term socio-political connotations. In the meantime, the evidence suggests that, unlike the Generalitat de Catalunya, the government of Spain has not accepted the “reality” that grand public infrastructure can not longer be funded publicly, and that it only need better risk management to achieve its pre-Crisis policies, as best illustrated by its current approach to high speed railways:

For several post-Crisis years Spain pursued ugly engineering compromises to maintain the illusion (in its Anglo-Castellano meaning of both ambition and deception) of a high speed railway building programme it could no longer afford. For example, by re-using historic railway alignments, even where those alignments mock “high speed”, as is the case for the ongoing integration of the 30 km/h Loja curves (on the line to Granada) into a network intended to reach 300 km/h. The “AVE” from Valencia to Castellón epitomised the problem: Implemented by dual-gauging (Iberian and International) one of the existing two tracks, (International gauge) AVE trains operated no faster than other trains on the same track, thus offered no additional utility beyond what could have been achieved by simply passing the AVE rolling stock through a gauge-changer. The claim that Castellón had been added to Spain’s high speed railway network was met with a good degree of Valencian cynicism, and did nothing to assuage the view that the government in Madrid ascribed a low priority to the Mediterranean Corridor (along the east coast).

2018 heralded a return to pre-Crisis high speed railway building, particularly in the north of Spain where none of the intended network had been completed beyond Valladolid – the Crisis having left an eclectic mix of disconnected infrastructure in its wake, from stations served by no trains, to depots maintaining no rolling stock. Works agreed in 2018 include Bilbao station, the most expensive railway station project in the history of Spain, a 720 million euro investment that makes the 240 million euros lavished on the temple to AVE that is Zaragoza Delicias, look cheap.

Compared to Castilla, the geology of northern Spain increases construction costs, as the Norte discovered in the 1860s – its route from Madrid to Irun cost around 550 thousand Pesetas per kilometre, compared to 208 thousand Francs per kilometre from Madrid to Zaragoza (the two currencies directly comparable because the Peseta and Franc maintained parity via the Gold Standard – although it should be noted that the Norte was actually dealing in “Reales de Vellón”, in a decade when the Spanish currency changed twice). Modern engineering techniques, such as the New Austrian tunneling method, may make many AVE route alignments possible, but such construction carries increased geological risk, as epitomised by the Pajares tunnels on the route to León and Asturias: Construction costs have more than tripled, to over 3 billion euros, as has construction time, from the five years anticipated in 2003 to perhaps twenty – while water leaks from punctured aquifers, and relentless landslides, raise doubts as to whether the line will ever open to its intended specification.

Risk is not necessarily so visual: For example, in the case of the failed highway concessions around Madrid, land purchases were budgeted on the assumption the land was categorised as rural, however that land was ultimately judged urban, greatly inflating the cost of acquiring it. Similarly, project management, even of relatively unambitious projects such as Girona’s concrete box of an AVE station, can get bogged down in local political disputes – not to mention the equivalent project in Barcelona, which was stalled for several years by anti-corruption audits. That ADIF-AV budgeted half a billion euros in 2017 to deal with litigation by its own construction contractors paints a dismal picture.

In 2017 the Spanish government legislated to moderate risk in public contracting: To spread risk across more contractors by encouraging the participation of smaller contractors through the contesting of more minor contracts, splitting large contracts, and measures such as ensuring prompt payment and improving transparency. And in parallel, to transfer risk to contractors, notably by limiting the modification of contracts with the private sector to no more than 50% of the original bid price. On genuinely risky projects, this dual policy of spread and transfer naturally tends to contradiction, since only larger companies can carry larger risks. Mid-sized construction companies remain unconvinced that the Spanish government’s approach to procuring transport infrastructure has actually changed. That the new legislation is simply patching up the cracks in the original (internal societally structured) model, is borne out by the counsel of the larger Spanish construction companies, who consider risk as a far more fluid, flexible component of project financing than the government: Shifting risk to reflect the capacity of each sector to manage it, adding value through the private sector management of projects over a longer period than the political electoral cycle, and conversely reacting faster than the public sector to offer short term flexibility. Not least because of their temporality, these are unmistakably lessons from the external, globalised environment in which these companies now operate.

Since the Crisis of 2008 Spanish construction companies have learnt to thrive in markets outside of Spain, their global dominance now second only to China: Their technical competence is not in doubt, nor is their ability to work effectively in different societal and administrative environments. Which makes their domestic environment all the more intriguing. Spanish national transport infrastructure is theoretically ripe for the application of externalised risk models:

  • The Spanish construction industry are both willing and able to adjust to more external organisational models. That adjustment does not necessarily suppose a radical change in epistemology. Rather that the internal societal model of knowable groups has the potential to be arranged differently, should it be exposed to a different environment.
  • The existing internal societal model has never worked well at the scale of national transport infrastructure, as described in The Expectations of Competition. Indeed the purpose of such transport infrastructure’s “presence” is precisely to bind groups that cannot know one another through the base societal “family” model.
  • The theological root of infrastructure presence – the boundary at which the state manifests the external (God) in nature – is surely just as capable of delivering alternative external concepts.

The inhibiting factor is elementary: The nation of Spain, by Westphalian definition, cannot be global. Spain, like other sovereign nations, is predicated on its ability to differentiate itself from the global whole. Since every element of the external that Spain accepts weakens itself as an entity, it is crucial that it uses external elements to strengthen itself as an entity. Since losing the European intellectual hegemony to the Dutch Republic, the question of what strengthens itself as an entity has plagued Spain, because its internal strength manifests in a different manner to the way the external (at least northern European) world measures strength. AVE is a contemporary example – its presence strengthens the internal idea of Spain, while its utility strengthens the external notion of economy. In practice a compromise between these internal and external assessments which perhaps satisfies neither adequately. A relentless tension – here between presence and utility – rather than a happy equilibrium be found, with respite ominously implying isolation. Given the stakes, exposure to externalised risk is moderated by the state: Unfettered external finance could weaken Spain more than it strengthens her, or might negatively alter the balance between presence and utility.

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Patria and Patrimonio

Sant Llorenç de Montgai

“Patria and Patrimonio” is the third essay in a sequence that explores the current Catalan independence process. The first essay introduces The Act of Referèndum. The second, on hope, 1714 and All That. This essay characterises state.

In September 1923, Miguel Primo de Rivera, the Captain General of Barcelona, lead a successful military coup d’etat for control of the Spanish government. Spanish society had never recovered from the humiliation of the “Disaster of 1898“, not least the Catalans, whose textile industry had previously benefited from favourable trade with what had remained of the Spanish Empire – a policy that had done nothing to assuage the Cuban separatism at the heart of the Disaster. Primo de Rivera’s paternal dictatorship manifest a pragmatic economic nationalism, in which government gave to the “working” population only in so far as it did not take from the “landed” interests of the elite. An improvement on Cánovas’ policy of absolutist suppression, that had contributed to 1898, but ultimately insufficient to avert the rise of the Second Republic, subsequent civil war, and altogether harsher dictatorship of Franco.

The railways of Spain mimic her geopolitics. That’s as true today as it was when the centralist government of Isabel II first offered state support in 1855, explicitly for new railways emanating from Madrid. An imbalance between the centre and periphery redressed in the 1870s and 1880s by the gradual formation of a near-perfect duopoly of the two dominant railway companies: Centrally-focused MZA and more peripheral Norte. The exception of Andalucía from this duopoly is notable for suggesting the geopolitics of Spain are not quite as simple as centre vs periphery: Not just that the regionally dominant “Compañía de Ferrocarriles Andaluces” remained outwith the duopoly, but that its ownership so closely mirrored wider political history – from primarily French investors in the 19th century, to Catalans in the 1920s, before collapsing into the state in the 1930s. While Spain’s railways were built as commercial concessions (the profit from their operation expected to fund most of the cost of their initial construction), the materials shortages caused by World War One had pushed operating costs beyond revenue. The creeping nationalisation of Spanish railways, which had started at the turn of the century as state protections for the railway industry, was looking increasingly inevitable by the 1920s. Sufficiently inevitable that the Spanish state could engage in railway building without incurring the wrath of the elite, just not yet in the more commercial territorial cores of the centre and periphery. Enter the era of the Explotación de Ferrocarriles por el Estado (exploitation of railways by the state), and the Málagan engineer Rafael Benjumea y Burín, the Count of Guadalhorce.

Ostensibly aimed at integrating Spain’s railways, the Guadalhorce Plan of 1926 primarily fulfilled Primo de Rivera’s policy of building “economic” infrastructure, albeit only in so far as it did not impinge on the interests of the elite – a caveat that essentially excluded economically beneficial railway investment. The fatal flaw in Primo de Rivera’s economic nationalism was his inability to apply it to the most commercial areas of the Spanish economy, commerce indicative of economic (especially industrial) benefit, because such areas remained wedded to the untouchable landed elite. Primo de Rivera’s policy none-the-less established a precedent for the state to provide infrastructure for the people, even if that infrastructure serve almost none of its implicit economic function. Most evident in railway policy, but presumably true of wider communications including power, this precedent combined with the 19th century expression of (especially central) authority through railways, an absolutism vested in God: As explained in 1714 and All That, the idea of Spain maintains the external as a god in nature, so to this way of thinking, railways serve as the physical manifestation of the external. The contemporary AVE high-speed Spanish railway network is built thus: The external, a (Bourbon legacy) mirage of France’s TGV, physically manifest for the people of Spain with scant regard for economic performance. The radial AVE network was delivered geopolitically over three decades due to the immense cost of railway construction to an internal economy which is not as strong as its external ilusión portrays. For now, radial only, the traditional peripheral counter-balance temporarily lost in a quagmire of regional autonomies that struggle to stand together against the centre, evident from the Mediterranean Corridor. Prediction, of operating costs and revenues, little more than a charade for soon-to-be bankrupt international investors, the bane of operations in a culture that can only comprehend mega-project solutions to its operational problems, but not a philosophical tenant of the idea of Spain, and thus to misunderstand ilusión – a hope to be lived.

The Guadalhorce Plan’s most infamous project was a transversal railway from south to north – Baeza in Andalucía to Saint-Girons in France – avoiding all the major cities of Spain – Seville, València, Madrid, Barcelona. Economically and operationally, such transversal railways are difficult projects to justify, even in densely populated, highly industrialised countries – a rational nonsense for relatively agrarian Spain. Yet perfectly suited to the geopolitics of the moment. In the nature of ambitious construction proposals, the Baeza-Saint Girons project outlived its moment: The project persisted (with a break in the 1930s, when Guadalhorce was in exile) until Franco’s post-isolationist stabilisation plan of 1959, which briefly injected American economic “sense” into Spanish railway development, directing investment into the productive core of the railway network. The only section to have opened, Lleida to Pobla de Segur, a glorious white elephant – that with the greatest of respect to Pobla de Segur (population three thousand), goes nowhere that warrants the cost and capacity of a railway. Spanish enthusiasm for underutilised geopolitical transport infrastructure evidently predates the “ghost airports” of the early 2000s.

Left to the tyranny of post-Francoist Spain, RENFE (Spain’s nationalised railway company) would have closed the Lleida-Pobla de Segur railway as part of their 1984 route rationalisation, a Beeching-esk response to financial deficits. Apparently under pressure from local people to save the line from closure, the autonomous community stepped in. By operating subsidy since 1984, ownership since 2005, and complete control since 2015 – the latest notable for de-implementing European policy, a shift in policy focus from national to regional, an unintended acknowledgement that the line’s original cross-border ambition was over. In addition to paying an operating subsidy of almost 2 million Euros a year, between 2006 and 2016 the Generalitat de Catalunya (the government of Catalunya, via its railway subsidiary FGC) invested 45 million Euros in the route, including a pair of new trains – which subsequently improved frequencies and patronage, albeit from a pitifully low base: Average daily passenger journeys (factoring in occasional tourist trains) had fallen as low as 200, strongly skewed to the short southern section between Lleida and Balaguer.

The epitome of politicised infrastructure, the very manifestation of the geopolitics of Spain, the Pobla de Segur railway was surely destined to illustrate the Generalitat de Catalunya’s publicity for the Act of Referèndum. The sidings at Sant Llorenç de Montgai station repurposed under the banner, “you were born with the capacity to decide – will you give that up?” With little visual pretence of neutrality, indicative of the politicisation of Catalunya’s principle civil institution, the citizen of the upcoming state of Catalunya is presented with a choice between the straight track ahead and the siding to the right. Humorous deceptions all: The straight track continues to Pobla de Segur, as close to nowhere as Catalunya’s railway network goes. The sidings have been airbrushed to show just one, avoiding any suggestion of the plural reality beyond. And not one of the two trains is in sight, the impending “choque de trenes” (socio-political train crash) left in the eye of the beholder. With specific historical context, the poster represents the perpetual geopolitical struggle that is Spain. Without, the enticing vision of a future on an empty set of railway tracks, reveals much about the relationship of people and state.

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