EU probes ADIF and Civil Guard over rail subsidy misuse

An ex officio review of Adif (Spain's railway infrastructure administrator) scrutinizes the use of €261.6 million in Next Generation EU funds for the Madrid-Seville line renovation and a €94 million contract awarded in October 2021 to replace the LZB safety system with the European ERTMS.

The review, involving the Central Operational Unit (UCO) of the Civil Guard, targets subsidies intended for rail improvements. The core issue is the deployment of **€261.6 million** from Next Generation funds for the Madrid-Seville upgrade, where Adif is Spain's largest recipient under the Recovery and Resilience Facility (RRF).

## The €94 million ERTMS contract

The flagship contract for this renovation was awarded in October 2021 to **Thales**, now **Hitachi Rail**, for **€94 million**, to replace the LZB system with ERTMS. It was granted with a **28%** discount and immediately questioned for potentially reckless low bidding.

Initially funded by ERDF, the project was shifted to Next Generation funds with a promise to Brussels to complete it by **February 2026**. A **12-month** delay has been acknowledged by former Transport Minister **Óscar Puente** before his resignation.

## LZB failed over 170 times this year

The LZB system, slated for replacement, experienced more than **170 failures** this year. Apostolos Tzitzikostas, EU Commissioner for Sustainable Transport and Tourism, urged ERTMS implementation after incidents in Adamuz and Urda. Puente maintained that the legacy system was equally safe.

Also under scrutiny are **GSM-R** (train-to-control-center radio telephony) and maintenance during migration. The UCO previously appeared at the Court of Auditors, which had detected irregularities in Adif awards under the Plan.

## Government stance and pending developments

Finance Minister **María Jesús Sarracena** defended that everything was certified and disbursed. Certifying execution of an irregular contract does not legitimize it, but that is the current status.

The European Public Prosecutor's Office will not name suspects until technical expertise on ERTMS is available, which will take months. Brussels may demand partial repayment of RRF funds if the February 2026 milestone is missed, impacting public budgets. Eleven awards totaling **€900 million** will result in separate proceedings, with some cases likely expiring.

Based on available data, the most probable outcome includes a settlement, fund repayment, administrative fines, and a compliance plan. Full ERTMS deployment could slip to 2028-2029 with a **30-40%** cost overrun, according to technical estimates. This is a projection, not a confirmed fact.