Cross-border projectsEconomyEuropeLogisticsPortugalSpain

Portugal to Modernise Railway System and Increase Spanish Trade Via Upcoming Southern European Rail Line

This spring, Portugal, Spain and the EU Commissioner of Transport announced plans to construct a new freight line that will link southern Portugal with Spain, upgrading Portugal’s railways and providing long-term economic benefits to the region.

Portugal is working in tandem with the EU to build a railway that will bring more logistical ease to companies transporting products to the country’s nieghbour and biggest trading partner, Spain. This is one of many infrastructure projects that highlights how the EU and its southern member states are working together to grow the region’s economy.

At approximately 100 km in length, the new railway line will connect the city of Évora in southern Portugal with Elvas, a town just across from the Spanish border. Construction is expected to start in March 2019 and should be completed by 2022.  The project has been budgeted at €509 million Euros, with Portugal and the EU providing €227 million and €232 million respectively.

The European Union’s participation is a major vote of confidence in this infrastructure project. Funds have been made available through the Connection Europe Facility for Transport, a programme that aims to fix the missing links in Europe’s transport networks, with a particular focus on cross-border projects. The European Union has allocated more than €24 billion for these initiatives in the hope that they will promote growth, create jobs, and foster competition.

The Southern European Rail Line railway will connect Évora, a southern city in Portugal circa 115 km east of Lisbon, to the town of Elvas, which borders Spain. This photo shows the ruins of Ajuda Bridge in the Guadiana River dividing Elvas, Portugal and Olivenza, Spain. Copyright: Ana Couto/

This railway line should provide a long-term economic boost to the region’s economies. The high-speed freight trains will connect key ports such as Portugal’s Sines and Setubal, a boon for export industries. Once completed, the rail line will support around 51 freight trains each day. As a result, it’s expected that trade between Portugal and Spain, which amounted to more than €34 billion in 2016, will increase.

While both Spain and Portugal are set to benefit from the construction of the new railway line, it’s a particularly important development for Portugal.  Spain is Portugal’s number one trading partner, and the value of its exports to Spain are double that of France, its second largest export market.  Conversely, Portugal is Spain’s third most valuable export destination. When the project was announced, Portuguese Prime Minister António Costa highlighted that the rail line will lower transport costs from three of Portugal’s ports by 30% and reduce shipping distances by 140 km.

Moreover, this new project has quieted critics who believe Portugal has dragged its feet when it comes to investing in its railway industry. The rail line is part of Portugal’s €2 billion railway infrastructure plan known as Ferrovia 2020. Unfortunately, the plan has been plagued by delays. While the quality of Portugal’s roads ranks amongst the highest in Europe, its railway lines are considered below average by the European Commission. Portugal’s decision to invest in this project shows its commitment to modernising its ailing railway industry.

Improving the interconnectedness of Southern Europe is integral to the region’s economic revival. By building this new railway line, trade between Spain and Portugal will rise and Portuguese ports will be able to export more goods outside the European Union. While it will be at least four years until construction is completed, the project will create new jobs in the meantime and have positive economic spillover effects for the towns along its construction route.

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Katrina Pirner

Katrina is a Berlin-based freelance writer who focuses on economics, disruptive technology and politics. She’s previously worked in Canada, Italy, Belgium, and the US. Katrina holds a MA in International Relations from Johns Hopkins University where she concentrated in European political economy.

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