Francisco Iglesias has been at the helm of Alsa, an iconic passenger transport company, for eight years. A company that turned 100 years old on April 20 and that carries the name of Spain through several countries. Leaders on the road, the company also sets its sights on railway liberalization.
Where is Alsa going?
We have just turned 100 years old, we are leaders in mobility in Spain. We invoice almost one thousand two hundred million euros. We have a workforce of 16,000 employees, a fleet of 6,000 buses and we want to continue consolidating leadership in Spain, in addition to growing internationally. In Spain we want to continue growing through acquisitions and tenders, looking for new businesses related to mobility in general and in particular with micromobility, the last mile or urban transport. A month ago we started operations in Saudi Arabia and in the last five years we have entered five new countries. We are analyzing all types of modes of transportation that the client demands.
How will they close 2023 and what prospects do they have for 2024?
We have good prospects. We hope to have already recovered pre-pandemic rates and we want to continue growing. Between 2016 and 2024 we will see the size of the company double in terms of passengers, fleet and billing.
Does road passenger transport have a future?
It is our core business but we do other things. Road transport has a great future for several reasons. Spain has a low population density, not everything is Madrid and Barcelona. You have to resolve this capillarity by bus, which guarantees territorial and social cohesion. On the other hand, there is metropolitan transportation. And this last year we have opted for a policy of discounts and promotion of public transport, which has caused us to increase demand significantly.
Are you going to try to operate on more routes?
80% of road transport operates through public tenders, which have an average duration of 10 years. Every year, opportunities and risks associated with bidding processes arise. Yes, we want to access new contracts and we are constantly searching for new opportunities. We prepare on average two offers per month and we win more contracts than we lose.
Some contests are not resolved in the best way for the citizen. What do you think of the problems with some contracts?
The sustainable mobility law was about to be approved, a much-needed standard for the sector. The transport law that governs Spain dates back to 1987. It was a magnificent opportunity to improve and modernize the current system. The bill will surely be approved in this legislature and the foundations will be laid for what mobility will be like in the coming decades.
What does that law have to have?
The law lacks funding, first of all, to provide a sustainable framework for all public transport. Then another problem is the contests, the specifications, the contracting conditions. There are 17 autonomous communities, regional consortia and city councils that have their own procedures. There has not been a consensus and in some cases there have not been good practices in hiring. A good analysis of the sustainability of the contract during the execution period is necessary.
For example, in Catalonia the contracts were extended for 25 years and now they will have to face their renewal. There will be a new concession map and some routes will have to be updated. For example, the Barcelona–Sabadell route will continue to make sense, but others will not so much and other solutions will have to be found. In Catalonia, the Barcelona Metropolitan Authority (AMB) has made questionable decisions with contracts that have been expired for 10 years, annulled, appealed and that have not been re-tendered. There has also been a continuous change of specifications. A practically auction model has been reached, the lowest economic bid wins. This is a mistake by not taking into account other very relevant aspects of quality and service. The system of awarding transport contracts must be changed.
What does this mean?
In a sector like ours, 80% of the costs are personnel and fuel. The company, therefore, has a very small differentiation capacity that must be taken into account, adding value to the service. The almost exclusive criterion based on price in the long run has an impact on the service and is ultimately paid by the user.
How does the user pay for these awards?
In terms of quality of service offered: older vehicles, poor maintenance, poorly trained staff, facilities that do not meet needs. But this is a public service, not a product. Providing services with adequate quality levels must be very important. Although the law itself establishes the treatment of reckless or abnormally low offers, this has not been applied in Catalonia. Offers with very low values have been accepted that in the end will be detrimental to the service.
We must reflect, provide legal certainty and make specifications in which the winning bid is the one that offers the best service to the citizen, with a good price, but with a balance in terms of quality of service. The price can weigh up to 60-65%, but not 90%. And offers with an abnormally low price should be excluded.
They have incorporated a new director of expansion in Catalonia, Pere Calvet, former general director of Transport of the Generalitat. Because?
We are leaders in many autonomous communities, but in Catalonia we want to achieve a more relevant position, in line with the company we are. It was time to dedicate more effort in Catalonia because we want to be leaders here as well.
What opportunities do you see in railway liberalization?
With the entry of Ouigo and Iryo in high speed there has been a notable increase in travelers. We are interested in the train, in high-speed commercial services and in the Public Service Obligations (PSO) in Cercanías and Media Distancia that will soon be opened to competition. If we want to be in the mobility of the future we have to be on the train. And in other segments of mobility such as ambulances, VTC or even tourist boats.
Are you looking for partners for this adventure?
We are always open to incorporating any partner who can contribute to us and who has different capabilities than ours. We could incorporate technology, funds, consulting companies... that add value to the joint project.
What routes are you interested in?
The corridors that connect Madrid with the north. And Madrid with the south, removing the cities where other companies already operate.
Alsa is present in countries such as Saudi Arabia, Morocco, Switzerland, Portugal and France. What plans do you have abroad?
We are looking for new opportunities in four countries on three continents. We look for local partners who share our values. The commitment to internationalization is very strong.
