p16
RAILWAYS IN PORTUGAL AND SPAIN:
CORPORATE AND PUBLIC POLICIES
Luís António Lopes dos Santos
PAPER (pdf)
Railways arrived late to the Iberian Peninsula mainly as consequence of the low awareness of the political leaders concerning the reality outside the country and the importance the new mean of transportation was gaining. Generally, the railways network in the peninsula will be constructed under two phases more or less simultaneous interrupted by serious crisis resulting from the lack of traffic: one between 1855 and 1865, other between 1875 and 1891.
Entering the XX century, for the first time the railways traffic that flooded the railways network exceeded the capacity of the transporting offer. This will be the period of maximum prosperity of the Iberian railways and in general the company's administrations will be able to absorb and adapt to the procurement based exclusively on their resources
The Great World War will put an end to this period of prosperity marking a turning point that will change way the transportation philosophy was conceived since the first days of the railways in the middle of the XIX century. Indeed, the conflict will lead to a severe increase of costs and railways exploiting conditions which could not be compensated by the income since the prices were frozen by the original concession contracts. On one hand, the railways cannot maintain the previous profitability levels and on the other hand, under the new prices and for the remaining concession time, the private companies are no longer able to redeem the investments necessary for a technological update or for the alignment of the offer to the evolution of the procurement.
Under the impossibility to interrupt the transportation service the State is compelled to assume a gradual increase of the subsidies granted for a fundamentally public service. From this moment on a no return transference of railways from private sphere to public one starts having its final stage previous to the II World War with the concentration of the national networks more or less directly under the state management