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ACM recommends Dutch government to include a requirement to cooperate in the tender conditions for a new train service to Germany

11-05-2020

A requirement to cooperate with other market participants may be included in the concession conditions of the international rail service between the Dutch city of Eindhoven and the German city of Düsseldorf. Such a requirement is preferred over a financial incentive to stimulate cooperation as the latter may create an uneven playing field in the tender process. This is one of the conclusions of an analysis carried out by the Netherlands Authority for Consumers and Markets (ACM) at the request of the Dutch Ministry of Infrastructure and Water Management (IenW).

The new international train service between Eindhoven and Düsseldorf allows passengers to get to their destination faster, which is convenient for those passengers. The service is expected to attract many additional passengers each year. Traveling by train is often a more environmentally-friendly alternative to air travel and road travel. Furthermore, regional public-transport tender processes have shown that tender processes can lead to new and innovative solutions, and produce higher passenger satisfaction.

Through a public tender process, market participants are able to apply for the concession to operate the train service. For a tender process to be successful, a level playing field must be ensured. ACM underlines the importance of such a level playing field, allowing all bidders in the tender process for the new international train service to compete fairly with one another. At the end of the day, such competition is in the interest of consumers.

Cooperation

The concession for the international train service concerns the operating costs. The revenues go to the Dutch and German granting authorities. The original plan was to allocate the revenues from passengers in the Netherlands on the international train service to the operator of the Dutch main rail network. At the moment, Dutch Railways NS is the operator of the main rail network in the Netherlands. The financial incentive resulting from this allocation was aimed at stimulating cooperation between the main rail network operator and the international operator. According to ACM, it cannot be ruled out that the plan to allocate the revenues to the main rail network operator may result in giving an advantage to this bidder over other bidders in the tender process. This potential advantage could be incorporated in the bid that the operator will submit for the international concession, thereby creating an uneven playing field. After all, the other bidders for the concession do not have that advantage.

The operator of the Dutch main rail network and the international operator can already be stimulated sufficiently to cooperate in a way that does not carry any risks of distorting the level playing field. For example, a requirement to cooperate may be included in the concession conditions of the main rail network and the international rail service, which is a method that is also common in other concessions.

Question of the Dutch Ministry of Infrastructure and Water Management

The Ministry of Infrastructure and Water Management on July 17, 2019 asked ACM whether the level playing field could be distorted in the tender process for the new international train connection between Eindhoven and Düsseldorf. This question was prompted by the planned revenue allocation.

See also:

11-05-2020 Analysis of the level playing field with regard to the Eindhoven-Düsseldorf train service (in Dutch)