en.Wedoany.com Reported - Spanish train manufacturer Talgo has reached a settlement agreement with Renfe regarding the Avril S106 high-speed train project, ending a long-standing dispute over delivery delays, penalties, and acceptance conditions. Under the agreement, Talgo will retrofit 15 of the 30 high-speed trains, equipping the entire S106 fleet with gauge-change technology.
The core technical change in the agreement involves converting 15 fixed-gauge Avril S106 trains, originally designed for the European high-speed network, into variable-gauge trains. Once completed, all 30 S106 trains will be able to operate on various types of infrastructure across the Iberian Peninsula. Renfe will pay Talgo €132 million for the adaptation, including adjustments to bogies and Talgo's unique independent wheel system (rodals).
For Renfe, this retrofit enhances the operational flexibility of the fleet. Variable-gauge trains can switch between standard European gauge high-speed lines and the Iberian gauge of Spain's conventional rail network, thereby expanding the range of routes the trains can serve. In Spain, where railway networks of different gauges coexist, high-speed trains with gauge-change capability can extend services beyond dedicated high-speed lines.
The agreement also establishes a payment schedule for penalties related to delays in the S106 project. According to Talgo, the relevant penalties will not begin to be paid until 2032, after the maturity of its recently restructured bank debt. Over the six years following 2032, the penalties will be paid in installments. At the same time, the agreement sets a timetable for Renfe to accept the trains, with the operator paying the remaining amounts for the entire Avril fleet within the next three months and releasing most of the existing guarantees, involving approximately €200 million.
The agreement also revises the maintenance contract for the Avril fleet. Tarvia, the maintenance service joint venture co-owned by Talgo and Renfe, will receive higher compensation. For the replacement of bogies and running gear, Renfe will increase maintenance costs by approximately 29% and will be responsible for procuring necessary spare parts to supply to Tarvia.
Talgo stated that the agreement is a significant step in the new phase that began on December 17, aimed at enhancing the company's stability, industrial capacity, and financial position. The company's order backlog at the end of 2025 was €4.466 billion, rising to a record €6.307 billion by the end of the first half of 2026. Talgo noted that identified commercial opportunities over the next two years amount to €14 billion, with more than 80% in Europe. In the first half of 2026, Talgo secured several major contracts, including a €1.332 billion contract with Saudi Arabia Railways (SAR) for the manufacturing and maintenance of 20 high-speed trains, a train and maintenance order worth approximately €756 million from the Swedish Transport Administration (Trafikverket), and a ten-year maintenance contract valued at around €80 million with Uzbekistan Railways (UTY).
The Avril S106 trains are a strategic project for Renfe to compete following the liberalization of Spain's high-speed market. The public operator competes with Iryo and Ouigo España on multiple routes, and the Avril trains are designed for high capacity and operational flexibility. The agreement provides a framework for train acceptance, payment of outstanding amounts, and the comprehensive conversion of the fleet to variable-gauge capability, reducing most of the project's uncertainties. For passengers, the main benefit is the gradual introduction of a new fleet capable of serving more routes, supporting Renfe's service offerings in a market where speed, price, and train frequency have become key competitive factors.
