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Powerful position of Dutch Railways NS puts regional railway undertakings at a disadvantage

Railway undertakings that operate on regional rail lines such as Veolia, Arriva, Connexxion and Syntus are too dependent on Dutch Railways NS and Trans Link Systems (TLS), which is the organization behind ‘OV-chipkaart’, the national contactless smart card for public transport in the Netherlands. According to the Netherlands Authority for Consumers & Markets (ACM), this situation is at the expense of customer service to passengers. That is the conclusion of the 2013 Quick Scan on Passenger Rail Transport, which ACM carried out at the request of the Dutch House of Representatives and the Ministry of Infrastructure & the Environment.

Regional railway undertakings in a dependent position at stations

In 1995, former state monopolist NS was split up into network infrastructure manager ProRail and transport undertaking Dutch Railways NS. The latter was given exclusive rights to all train stations, as well as to the commercial exploitation thereof. NS has since also become a service provider to its competitors. Henk Don, member of the Board of ACM, reacts: ‘If a company like Arriva wishes to open a service counter or a small convenience store at a station it serves, they will have to pay NS a visit first, which is their biggest competitor. They will have to do this, even if NS does not serve that particular station. As a result, negotiations between regional railway undertakings and NS tend to become difficult and lengthy. We currently see not enough incentives in place for NS to act in the interest of passengers.’

Bottlenecks in the national smart-card system

Mr. Don continues: ‘In addition, we have established that railway undertakings have no choice but to use the OV-chipkaart system of TLS. NS has a huge say in TLS’ operations. The interests of regional railway undertakings and the interests of their passengers are thus insufficiently represented. For example, the tariffs that TLS charges are not transparent. Regional railway undertakings can only hope that they do not end up paying too much. Furthermore, what we can see is that it is very likely that TLS delays certain innovations such as touching in and out with cell phones. When it comes to developments such as these, regional railway undertakings are also dependent on NS and TLS.’

ACM has identified other bottlenecks related to setting ticket prices, travel information, truck systems for services such as the ticket vending machines, and revenue distribution.

Proposed improvements

ACM has offered different solutions to deal with the identified bottlenecks. The solutions that are most effective are those that directly deal with the relationships between NS and the regional railway undertakings. One idea is relieving NS from its station management duties. In addition, the revenue allocation process and the travel information system could be organized without any involvement from NS. ACM also recommends to organize TLS differently (NS currently owns 68% of TLS).