A recent panel study reveals public opinion favours introducing more market opening as the most effective solution to the problems facing state-owned incumbent operator Dutch Railways (NS), rather than just giving NS more taxpayer subsidy. Due to the disputed renewal of the directly awarded Main Rail Network concession, there is still the opportunity to prevent further financial waste, according to ALLRAIL.
NS plans to increase fares by 10% next year, a move that is facing much resistance. Notably, NS has failed to implement any significant cost-saving measures, instead seeking even more taxpayer subsidy and/or fare increases.
Research by the TV programme “Hart van Nederland” shows that 38% of those surveyed prefer more market opening on the tracks, while only 30% support more taxpayer subsidy for NS to solve delays, reduced capacity, staff shortages and general public discontent.
All across Europe, market opening in the rail sector has already spurred significant market growth. This has resulted in lower ticket prices (Czech Republic: -46%, Sweden: -13%, Italy -30% to -40%, Austria -20% to -25%, Spain -28% to -30%), improved quality of service, increased train frequency and reduced taxpayer subsidy, all contributing to a rise in passenger demand and modal shift to rail.
Katharina Dekeyser from ALLRAIL urges the Dutch government to promptly introduce full market opening in the Dutch passenger rail system and end NS’ monopoly, particularly since the Main Rail Network concession has not yet been finalised.
“Now is the time for passengers in the Netherlands to reap the benefits of rail market opening. It is not justifiable for travellers and the Dutch government to continue subsidising NS, especially as its trains are increasingly delayed or even in the worst case just simply fail to arrive,“ says Katharina Dekeyser.
NS faces hardships
NS suffered an underlying operating loss of EUR 109 million in the first half of 2024. The costs incurred by NS to operate the train service remain higher than the revenues from the sale of train tickets and season tickets.
In the first half of the year, the number of passenger kilometers increased by 6.4% compared to the same period in 2023. Nevertheless, NS has been suffering from structurally fewer passengers since corona, partly due to the lasting impact of working from home.
The number of passenger kilometers compared to 2019, the last year before corona, is 94%.
In addition, costs have risen sharply due to high inflation. NS has not been able to fully pass on this inflation in the train ticket; as a result, the so-called indexation gap has increased to approximately 11% since 2021.
The Ministry of Infrastructure and Water Management has decided to no longer charge a concession fee – currently EUR 86 million per year – but to provide an annual contribution of EUR 13 million from 2025.
As shareholder, the Ministry of Finance has agreed to a lower return. NS is taking additional savings measures to reduce costs and part of the inflation will be passed on to the traveller via the price of the train ticket.
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