Netherland : a brief overview of the railway regionalisation
Analysis of - Signalling technician and railways observer
(version française disponible à ce lien)
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15th november 2014

The Netherlands is a relatively small but dense country with a population of 16.8 millions. The most densely-populated area, named « the Randstad » cover three big cities from Amsterdam to Rotterdam via The Hague (Den-Haag). Within a 50 to 150-km radius from this « Randstad » we can find other cities like Eindhoven, Utrecht or, in the south-east, Maastricht, and in the north, Groningen. It is a ideal situation for public transports and railways. The backbone of rail services in the Netherlands consists of national/inter regional rail traffic. These services are provided by the IC network, with within Randstad moreover rapid transit rail network.

The Dutch railway reform
Since long time, train service is operated by the vertically integrated national operator NS (Nederlands Spoorwegen). In the early 1990s, there was increasing dissatisfaction about the annual financial support in the form of subsidies because of the resulting heavy burden on the budget, and people had the impression that NS did not always use the money efficiently.  For the implementation of the European Directive in national law and establishing the future administrative and financial relationship between the State and railways, the Minister set up the independent Wijffels Commission. In 1992, this Commission issued its recommendation in the form of a report entitled « Sporen voor straks ». The Wijffels Commission identified four core functions of NS which could be transferred to separate business units, and NS became a holding.

Today, the NS Group (Nationale Spoorwegen groep), a holding with several subsidiaries. The state is for 100% shareholder. The financial contribution of the state has stopped, and since 2000 the NS is self-supporting. The NS Group employs 350 administratives employees; subsidiaries are Passengers (Reizigers with 10.000 employees), NedTrain (maintenance, with 3000 employees), NS Stations (500 employees) and NS International (600 employees).

In 2003, Dutch government created « ProRail », a state agency who responsible for 3.060 km of rail infrastructure, passengers stations, tram and metro excluded. Pro Rail, with 4.000 employees, manages the traffic-control and the path of all trains in Netherlands, both NS as other private company. Funding for ProRail is provided by a government subsidy, and a fee paid by the railway operators. 

Alstom Coradia LINT Dmu of Syntus (photo by Gerard Stolk via flickr - CC BY-NC 2.0)

According a thesis (1), the aforementioned policies and legislation have been based on a certain economic motivation. The attempt of the general railway reforms has mostly been to improve transparency, whereas regionalisation has largely focussed on a greater efficiency and quality of regional transport. In 1994, the consultant McKinsey conducted a survey on behalf of the government and NS into the losses per line and per route, and identified 30 lines as unprofitable, laying the basis for the separation of the Dutch railway network into a main rail network and a regional/local network.

This was the base which introduced the reform of regional rail services by the Passenger Transport Act of 2000. The national/interregional part stands out as the profitable section of entire rail system. This segment remains under state control, while the train services on the main rail network are awarded by private tender to the current operator, Dutch Railways NS. The national company pays an annual fee of 30 € millions to the Ducht state for his exclusive right of exploitation. The aim of this legislation was to drive forward improvements of the other segment, local passenger transport from which it's necessary to recoup a greater share of costs (from 35% to 50% of total costs). This reform provides a framework for the regionalisation of local rail services, bus and metro systems. A total of 18 regional transport authorities were formed, based on the 12 provinces (in more rural areas) and of the "city-regions" of the country.   The Dutch state was treated as the « 19th transport authority » as it retained control of main line rail services – including local rail services operating over the main line routes.

Map of the 18 transport authorities. The 19th is the national Dutch NS.

Devolve powers and budgets of regional services to the province remains the responsibility of the national minister. The train services which were decentralised were all routes which NS had indicated as unprofitable in 1996. Since the reform Act, when decentralisation was introduced, the level of subsidies to the regional authorities should remain unchanged. Over time, a important quantity of local lines were transferred to the provinces as shown the map below. They can choose not only the national NS, but also another operator of their choice according to the method of the tendering and the attribution of a concession for a given time.

Three players
Outside of the national NS, there are currently 3 private players in the railway field. The first company which began the regional experience was Syntus in the east of the Netherlands who provided public transport in regions Overijssel, Gelderland and Twente. The company started prior to the Passenger Transport Act 2000 as a joint-venture between the national NS and a regional bus operator of the VSN-groep (Oostnet). Syntus resulted from an earlier regional project that aimed at better integrating the operations of buses and trains in this area, but lost recently a part. The company had responsibility for both bus and rail services and the staff, including drivers, were multi-skilled in both bus and rail.


Veolia Transport Nederland is a subsidiary of the french Veolia Transdev. Veolia started operating in the Netherlands when it took over BBA, the regional VSN bus company in the southern province of North-Brabant. In December 2006 BBA lost the part of the Brabant  but Veolia won the tender of the entire neighbouring province of Limburg. Veolia operates by with 24 trains on the Maastricht-Kerkrade and Roermond–Venlo-Nijmegen routes.

Arriva was a british company since 1938 and through a number of mergers and acquisitions was renamed in 1997, then was acquired in 2010 by the german railway incumbent DBAG. The company is a leading operator of passenger transport, and operates in 14 European countries. Arriva Netherlands is part of the Arriva Group and  entered in the Dutch market when it acquired the two former VSN bus companies in the North of the Netherlands. The territory was largely extended when it won several concessions in various parts of the Netherlands, including the concession for all regional rail lines in the North of the country. Today Arriva operates on 15 railways lines with 100 trains and on many lines of bus.

(Arriva fac sheet)
National ticketing
It is clear in Netherlands that concurrency is not an end in itself. Many others aspects must be take in account, like the multimodal ticketing. The Dutch government and regional transport companies have introduced in 2010 a Radio Frequency Identification (RFID) smart card for all public transport services, including national railway, called « OV-chipkaart ». This is an electronic card similar to the Oyster Card in use in London, that can be used for travel on all modes of public transport in the Netherlands. One of advantages under the current franchising regime is that this system should give transport companies precise information on their revenues by providing detailed information over all journeys made. The card replace since july 2014 all paper-ticket.

Upon boarding local transport, passengers scan their card and are charged a fixed check-in tariff of €4,00 (on the NS this tariff can be upwards of € 20,00 depending on the smartcard used). When exiting the vehicle, the user has the card read again (check-out) and the correct fare is automatically calculated, deducted and displayed (similar to the Oyster Card in London).

Everyone knows that the main resistances to the transformation of the railways are due to the particular employment conditions in railway sector. State railways NS had an own agreement for collective labor- and safety conditions, and working hours were monitored rigorously. Pro Rail is also covered by a company  collective labour agreement. Next to these two company agreements, there are 3 multi company collective agreements. They cover public local and regional transport (the multi modal collective labour agreement), the collective agreement Public Transport (Openbaar Vervoer) and the rail way infrastructure, named the « RIS agreement ».

Effect of regionalisation
Regional rail is subject to competitive tendering by regional authorities. Often bus and rail are combined into one multimodal concession. The modal share of railways is relatively high in the Netherlands: 9.7 % of all land passenger kilometres are made by train, comparing with 6,8% in Europe. Between 2000 and 2010, the number of passengers increased by 11.5% and NS remains the biggest rail transport operator with a market share of 90% of passengers-kilometers (2012). In the same period, the volume of traffic carried by the other operators on the decentralised regional lines more than doubled. The effect of decentralisation is estimated at a 20% increase in passengers.

On the financial side, and according a paper of the National Bank of Belgium, the BDU which the regional transport entities receive each year is used for the concessions put out to tender, which cover buses, trams and trains. This makes it impossible to separate the subsidies which accrue to the railways. Every year the Ministry of Transport and Water Management pays an average of € 1.6 billion to 12 provinces and 7 municipalities as a contribution for the implementation of the local and regional mobility policy. Of this, roughly € 1 billion is spent on the operation of urban and district transport, and the rest on infrastructure.

On the rolling stock side, the results are very visible. At the beginning of its operations, Syntus used the old Dmu of NS class « Wadloper » of DM90. In 2001, the company acquired 25 LINT Dmu (Alstom Coradia LINT 41/H), on the line Zutphen – Hengelo – Oldenzaal. 

Internal view of a LINT Coradia of Syntus (wikipedia)

Veolia also has procured in 2007-2008 a total of 16 new Stadler GTW diesel-electric articulated multiple units, 10 2-car units GTW 2/6 and 6 3-car units GTW 2/8 with an inner video surveillance system, a closed toilet system accessible for disabled people, a 1st class compartment with 220V connections, an information system using TFT screens and offers space for 2 wheel chairs and 6 bicycles. All this examples show the importance that has the tender system because it forces providers to offer the best rolling stock if they want to win the market.

(Stadler facsheet)
The Dutch idea was to split national InterCity traffic with the unprofitable local traffic that could be managed better on the regional and local level. According a study of Hitrans, the Dutch experience has been largely positive though there have been some problems with the size of the provincial councils resulting in some overlapping of services. The partnership between Groningen and Drenthe suggests that this need not be a major barrier if authorities are willing to co-operate. The relatively short franchise length (up to eight years) means that there is a degree of instability in the network. The loss of a large part of the Syntus network to the rival operator Arriva has been seen by some commentators as risking a decline in the high quality service currently provided. It was not the case but, what is clear is that the instability which is part of the franchising process have a risk of impact on both staff and passengers. Politicians must keep a vigilant eye on this problem.

But according the thesis mentioned above (1), an experience in the north of the country shown that the results of the public tender seems to have been successful. Paid subsidies have become a lot lower for the Groningen part of the concession and stayed roughly the same for the Friesland part. The service given in return with the spend is better than before and the train frequency and passengers growth has been increased. That's what is exactly expected from the franchising system by tendering.

(1) Railway regionalisation in the Netherlands - Wouter van der Kolk - Erasmus School of Economics (Rotterdam)