Talgo and Renfe have reached an agreement on the Avril S106 project after years of disputes over delays, penalties, and train acceptance. The agreement calls for modifying 15 of the 30 high-speed trains so that the entire S106 fleet is equipped with gauge-changing technology.
Talgo, the Spanish train manufacturer, and Renfe, Spain’s public rail operator, have reached an agreement regarding the S106 Avril project, one of the most significant orders for high-speed trains in the Spanish market.
The agreement resolves the differences between the two companies, which have persisted in recent years amid delays in train deliveries, contractual penalties, and conditions for accepting the rolling stock.
The most significant technical change is the conversion of 15 Avril S106 trains with fixed gauge—designed for the European high-speed network—into trains with variable gauge. As a result, the entire fleet of 30 S106 trains will be able to operate on various types of infrastructure across the Iberian Peninsula.
Renfe will pay EUR 132 million
Renfe will pay Talgo EUR 132 million to convert the 15 fixed-gauge trains into variable-gauge units. The modification includes adaptations to the bogies and to Talgo’s proprietary independent wheel system, known in the company’s documentation as rodals.
For Renfe, the conversion increases the fleet’s operational flexibility. Variable-gauge trains can switch between high-speed lines with the standard European gauge and the conventional Spanish network with the Iberian gauge, allowing them to be used on multiple routes.
This capability is essential in Spain, where networks with different gauges coexist, and high-speed trains with gauge-changing capabilities allow services to be extended beyond dedicated high-speed lines.
Penalties, deferred until 2032
The agreement also sets the schedule for the payment of penalties associated with delays in the S106 project. According to Talgo, these payments will not begin before 2032, that is, after the maturity of the company’s recently restructured bank debt.
After 2032, the penalties will be paid over the next six years.
At the same time, the agreement also sets the timeline for Renfe’s acceptance of the trains. The operator will release the outstanding payments for the entire Avril fleet and release most of the existing guarantees, amounting to approximately 200 million euros, within the next three months.
For Talgo, this point is financially significant, as it frees up liquidity and reduces pressure on the company’s balance sheet.
Higher Maintenance Costs for Tarvia
The agreement also includes amendments to the maintenance contract for the Avril fleet. Tarvia, the joint venture owned by Talgo and Renfe that specializes in maintenance services, will receive higher compensation.
Regarding the replacement of bogies and running gear, Renfe will increase maintenance payments by approximately 29%. In addition, the Spanish operator will be responsible for procuring the necessary spare parts, which will then be supplied to Tarvia.
Tarvia is the company through which Renfe and Talgo develop and carry out maintenance services for rolling stock, including high- and very-high-speed trains.
An Important Agreement for Talgo’s New Phase
Talgo presents the agreement as an important step in the new phase that began on December 17, with the aim of strengthening the company’s stability, industrial capacity, and financial position.
The company ended 2025 with an order backlog of EUR 4.466 billion, and after the first six months of 2026, this figure rose to a record high of EUR 6.307 billion.
Talgo says it has identified commercial opportunities worth EUR 14 billion over the next two years, with over 80% of these in Europe.
New Contracts in Saudi Arabia, Sweden, and Uzbekistan
The first half of 2026 brought several major contracts for Talgo.
Saudi Arabia Railways (SAR) awarded the company a contract to manufacture 20 high-speed trains and provide associated maintenance services, with a total value of EUR 1.332 billion.
In Sweden, Trafikverket, the Swedish transport authority, ordered a fleet of long-distance and cross-border night trains, with full maintenance services, in a contract worth approximately EUR 756 million.
In Uzbekistan, UTY awarded Talgo a 10-year maintenance contract for the six Talgo trains currently in service, worth approximately EUR 80 million.
Avril, a strategic project for Renfe
The Avril S106 trains are essential to Renfe’s strategy in the Spanish high-speed market, which has become increasingly competitive following liberalization. The public operator competes with Iryo and Ouigo España on several corridors, and the Avril trains are designed for high capacity and operational flexibility.
However, the project has been marked by delays, contractual disputes, and pressure on Talgo. The agreement with Renfe reduces a significant portion of the uncertainties and provides a framework for the acceptance of the trains, the payment of outstanding amounts, and the transformation of the fleet into one fully equipped with variable gauge capability.
For passengers, the key benefit is the gradual introduction of a new fleet capable of serving more routes and supporting Renfe’s service offerings in a market where speed, price, and train frequency have become key competitive factors.
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