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Spain hurtled past France as Europe’s high speed rail leader last month when it opened a 6.6-billion-euro line from Madrid to Valencia, banking on a boost to the economy.

The 438-kilometre route, which opened on December 19, slashes travel time between the Spanish capital and the Mediterranean port of Valencia, Spain’s third-biggest city, from four hours to just 90 minutes.

The project, built at a cost of 6.6 billion euros ($A8.6 billion), brings Spain’s high-speed rail network to 2056 kilometres.

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It places Spain ahead of the 1896 kilometres of high speed rail in France and 1285 kilometres in Germany, home to Siemens, the world’s largest manufacturer of high-speed trains.

Spain’s high-speed train service, known as Alta Velocidad Espanola (AVE), boasts trains with noses shaped like a duck-billed platypus moving at speeds of up to 300 kph.

And it is set to grow further.

Taking into account routes planned or under construction, Spain would be in second place globally with 5525 kilometres of high speed rail tracks, behind China the world leader with 13,134 kilometres but ahead of pioneer Japan with 3625 kilometres.

By 2020 Spain wants to have 90 per cent of the population within 50 kilometres of a high-speed rail station.

"The AVE is very expensive. But it is an investment that generates many jobs and constributes to stimulate the economy, which is good at a time of crisis," said the director general for travelers at state-owned rail network Renfe.

The Spanish economy slumped into recession in late 2008 due to the collapse of a property bubble that has caused the unemployment rate to soar to 20 per cent, the highest in the euro zone.

It posted zero per cent economic growth in the third quarter.

The new Madrid-Valencia line will create 136,000 jobs directly and indirectly, according to consulting firm Accenture.

But with a population of 47 million people, Spain has fewer potential passengers than France or Germany for its high-speed trains.

Spain’s bet on high-speed rail is "the other face of the property bubble" which fuelled economic growth in Spain for over a decade before it burst, said Ramon Lopez de Lucio, a professor at the Architecture School of Madrid.

"That a country like Spain has more kilometres of AVE than any other nation aside from China makes no sense," he said, arguing that the Spanish government was over investing in infrastructure.

Spain invested an amount equal to 1.79 per cent of its gross domestic product in infrastructure in 2009, three times the amount invested by Germany, Europe’s largest economy.

"We have built highways with very limited traffic and in the case of the Madrid-Valencia AVE, we added 100 kilometres so it would go through Cuenca and Albacete, to serve 100 passengers per day," said Lopez de Lucio.

The money would have been better employed in making improvements to the suburban train service or the rail freight network or in education and research, he said.

Spain’s first high-speed line was opened in 1992 between Madrid and Seville, timed to coincide with the Expo 92 world fair being held in the southwestern city.

Services followed in 2007 linking Madrid to the northern city of Valladolid and the southern city of Malaga, followed by a line to northeastern Barcelona in 2008.

"The cumulative investment in AVE in 2010 approaches 45 billion euros," said economist Germa Bel of the University of Barcelona.

When this "impressive" amount of investment is taken into account, "the total passenger traffic is very weak", she said.

While 16 million people a year use the AVE each year, that is equal to just 15 percent of the passengers using France’s high-speed network and five percent of the passengers using Japan’s network, she said.