Deadly Spain rail crash threatens to derail export bid

The horrific train crash in Spain that killed 78 people comes at the worst time for the recession-hit nation's railway sector, which is pushing to win new markets for its high-speed trains.

Spain is in the running for a contract worth $16.4 billion (12.7 billion euros) for a high-speed rail network in Brazil linking the cities of Rio de Janeiro, Sao Paulo and Campinas which will be awarded in September.

The country, which two years ago won a contract to build and operate a high-speed rail link in Saudi Arabia, is also eyeing new markets in the United States, Russia, Kazakhstan and the United Arab Emirates.

"Technologically Spain is a pioneer in high-speed rail," Alejandro Lago, a logistics professor at the Iese business school in Barcelona, told AFP.

Since the 1960s, the country has had trains made by its Talgo train maker that could circulate at speeds of up to 200 kilometres (125 miles) an hour, he added.

Spain has invested heavily in road and rail links over the past decade and it now has the second-largest high-speed train network in the world, spanning 3,100 kilometres. Only China's is larger.

The train derailed about four kilometres (2.5 miles) from the station in northwestern Santiago de Compostela Wednesday, on the eve of a famed religious festival held annually in the city, where St. James, one of Jesus' apostles, is believed to be buried.

A dramatic 10-second video from a railway security camera, seen around the world, shows the train rocketing around a curve, slamming into a concrete wall at the side of the track as the engine overturns.

Daily newspaper El Pais reported that one of the two drivers on board said he was doing 190 kilometres per hour (118 mph) as he took the bend, where the speed limit is just 80 kph.

The investigation is trying to find out why the train was going so fast and why security devices to keep speed within permitted limits did not slow the train.

Spanish state railway company Renfe said the train -- a model able to adapt between high-speed and normal tracks -- had no technical problems and had just passed an inspection on the morning of the accident.

The crash -- Spain's deadliest rail disaster in decades -- is a huge blow for the country's bid for the deal in Brazil.

Brazil's bidding process for the country's lucrative infrastructure project specifies that firms in the run cannot have had an accident that caused deaths in their high-speed rail network in the last five years, El Pais reported.

That would appear to disqualify Renfe, according to the newspaper.

The rule -- which applies only if an accident is due to "operational causes" -- has already disqualified China's Communications Company Limited from the running due to an accident in June 2011 that killed 33 people.

The private and public Spanish companies that make up the consortium in the running for the contract have been reluctant to speak publicly about the impact of the accident on their bid.

But several unnamed sources close to the consortium, which includes Renfe and Spanish rail network administrator Adif, told Spanish business daily El Economista that they felt the contract was "lost".

This would be a major setback for Spain, which has been hoping to bank on its recent deal with Saudi Arabia to obtain similar projects.

"It's important because we're talking about high-speed rail and we want to show that we are world leaders in this area," Spanish secretary of state for transport, Rafael Catala, said in an interview with AFP earlier this month.

In 2011, a Spanish consortium won a 6.7-billion-euro contract to build and operate a 450-kilometre (280-mile) high-speed rail link in the desert between the holy cities of Mecca and Medina.

Spain's first big foreign rail contract was signed with Turkey. A Spanish consortium built the high-speed rail link between Ankara and Istanbul which was inaugurated in 2009.

"During an economic downturn, the railway sector tries to compensate with activity abroad, with exports," said Pedro Fortea, the head of Spanish railway company association Mafex, which helps promote 73 firms abroad.

"Spain has experience which is transferable to other countries," he added.