October 4th, 2005 Chris Verstegen, Directory for Rail Railway Policy and Legislation in The Netherlands Twinning workshop Ljubljana

October 4th, 2005

Chris Verstegen, Directory for Rail

Railway Policy and Legislation in The Netherlands

Twinning workshop Ljubljana

October 4th, 2005

Chris Verstegen, Directory for Rail 2

Contents

1.A brief history

2. Rail policy: objectives & priorities

3. Rail regulation: a new institutional setting

October 4th, 2005


65%

70%

75%

80%

85%

90%

95%

1e kwrt 2e kwrt 3e kwrt 4e kwrt

20002001

Deterioration of all main business indicators: punctuality, customer satisfaction, labour disputes, …

Around 2000: Dutch rail falls sick

October 4th, 2005


… also in international comparison

October 4th, 2005


Levenscyclus kosten

Leeftijd

NC

W (€

)

laag

Economisch optimaal

Huidig

optimaal hoog

Onderhoudskosten

Leeftijd

Ond

erho

udsk

oste

n (€

)/jaa

r

laag optimaal hoog

Level of maintenance costs to high

October 4th, 2005


• 2003-2004: € 853 mln to prevent further detoriation

• An additional € 1075 will have to be spend to restore reliability

• No real ‘life-cycle-management’ for the infrastructure:

– Renewal instead of maintenance?

Backlog in maintenance

October 4th, 2005


Changes in corporate setting (untill 1995)

NV NS

GOVERNMENT(100% shareholder NS)

Infrastructure Transport

October 4th, 2005


Changes in corporate setting(since july 2002)

GOVERNMENT(100% shareholder NS)

(100% shareholder ProRail)

NSProRail

NS Stations

NS International

Railinframanager

Capacity management

Traffic control

NS Domestic

NS Real Estate

October 4th, 2005


The challenge

• Creating rest & stability

• Integrated view quality

• Getting the incentives right

• A shared vision

• Keeping politics out

October 4th, 2005


Contents

1. A brief history

2.Rail policy: objectives & priorities

3. Rail regulation: a new institutional setting

October 4th, 2005


Spatial patterns determine structure public transport

• 16 mio inhabitants– Randstad 6 mio– Network of cities, e.g. Amsterdam 720.000– 6,9 mio cars

• Mobility market: – Car and bike leading, but – Public transport has high market share in rush

hour in main cities– 3.5 mio journeys by public transport daily– Rail share 1/3 of passengers, but 2/3 of

passengerkms

October 4th, 2005


London

ParisRandstad

Spatial patterns determine structure public transport

October 4th, 2005


Characteristics Dutch rail transport

• 2806 km of rail track• 384 stations

– 170 small stations (<1500): 6% of passengers

– 60 best stations (> 8000): 70% of passengers

• 5000 trains per day• > 1 million passengers on a working day• Average rail trip is < 40 km• > 14 billion passenger-kms per year• NS: railways mainlines (>95%pax, 60%

network) • Noordned, Syntus: regional railways (<5%pax)

October 4th, 2005


Characteristics Dutch rail transport

October 4th, 2005


National Mobility Plan

• Facilitate moderate growth of transport

• Reliable and safe journey from A tot B

(all modes)

• Reliable infrastructure & maintenance

• No modal-shift policy

• Decentralisation where possible

• Price policy : towards variable costs

October 4th, 2005


Main objectives for Rail …

• Focus on ‘core competence’ of rail transport:

– Facilitating mass transport (spatial efficiency): mainly commuters between main urban areas

– Providing social function (young/old/disabled)– Facilitating (international) freight transport

• Integrated optimisation of infrastructure & transport operations

– Aim for stability & reducing complexity – Focus on yield and capacity utilisation

management instead of new infrastructure projects

October 4th, 2005


… based on a shared problem-analysis…

• A joint project with all the involved partners was set up

• Proved to be a good exercise in cooperation between infrastructure manager and operators: results were surprising and innovative

Conclusions:

• The present way of running the railway system is to

complex and not reliable enough.

• Better utilisation of the infrastructure is needed in

order to raise profitability

• Key factor for a better utilisation is: restoring

reliablitity

October 4th, 2005


… and lessons from Japan: more reliability = more capacity

Example Osaka – Kyoto (70 km): 4-train system, 24 stations, two lines with passing lines >> 18 trains per hour !

October 4th, 2005


Contents

1. Brief History

2. Rail policy: objectives & priorities

3.Rail regulation: a new institutional setting

October 4th, 2005

Chris Verstegen, Directory for Rail 20New railway regulation: Creating a balanced institutional setting…

Contractual relationship between ProRail and TOC’s

Public law concessions between government and ProRail and NS

Independent regulator

Safety regulator within the ministry of public works

Advisory right consumers organisations

ProRail en NS are private law companies, 100% owned by government

October 4th, 2005

Chris Verstegen, Directory for Rail 21New railway regulation: Creating a balanced institutional setting…

October 4th, 2005


… in line with European directives

October 4th, 2005


Key points in the new railway regulation

• Main objective is securing stronger cooperation between Inframanager and TOC’s to improve performance

• Inframanager ProRail and operator NS have become independent, state owned companies

• Independent Regulatory body to secure non-discriminatory treatment of TOC’s by ProRail

• Ministry Safety Inspectorate responsible for supervision of railway safety

• Countervailing power of consumer organisations

October 4th, 2005


Market structure

• Concession NS to operate passenger trains on ‘core network’ until 1-1-2015

• Concession ProRail to maintain entire network until 1-1-2015

• Concession High Speed Line to Brussels/Paris(/London) from 2007 to 2022

• Concessions for TOC’s on ‘regional networks’

• Open access for freight-TOC’s

October 4th, 2005


• NS is granted an exclusive 10 year concession for the main railway network

• Main railway network is indivisible

• Main task: providing reliable mass transportation into and between the urban area’s

• In these area’s the spatial efficiency of rail transport is needed most

Main railway network…

October 4th, 2005


• The regional networks are(to be) decentralised

• On regional lines regional authorities can determine(and pay for) the service-level they want

• Regional operators do already appear: Noordned and Syntus

… and regional networks.

October 4th, 2005


Financial footprint rail sectorSituation 2001, million €

MIN. OF.TRANSPORT

NSPRORAIL PASSENGERS

REGIONAL GOV.

TAX PAYERS

FREIGHTTOC’S

FREIGHTCOMPANIES

REGIONAL TOC’S

17

78

1030

175

903

2745

17

AMOUNTS IN ITALIC ARE ESTIMATIONSBASED ON AVAILABLE DATA

AMOUNTS IN ITALIC ARE ESTIMATIONSBASED ON AVAILABLE DATA

24

1

37

0

CONSTRUCTORS

1747

New infrastructure•HSL-Zuid•Betuweroute•Other projects

•Maintenance•Traffic controll•Capacity management

2001 2002 2003 2004 2005 2006 2007

38 58 86 123 158 188 218

Development infra charges, million euro (estimated)

Student-card

279

MIN. OF.EDUCATION279

Contract-sector

October 4th, 2005

Chris Verstegen, Directory for Rail

The concession and migration from input- to output-steering

Twinning workshop Ljubljana

October 4th, 2005


Institutional setting since 1-1-2005

October 4th, 2005


Focus in this session

October 4th, 2005


What is a concession?

• A “one –way” public law instrument in which an exclusive right is given and obligations are laid down for the concessionaire (opposed to a “two-way”private law contract)

• Concession discribes the “relationship” between government and ProRail and the instruments for communication and intervention

• Features ProRail concession:– Duration: 10 yrs (2005-2015)– Geographical scope: complete Dutch heavy rail

network

October 4th, 2005


Key elements ProRail concession

ProRail has exclusive right on maintenance of rail-network with obligations to:

• provide:– Good and safe infrastructure,

– Accessible and safe transfer,

– Infrastructure which can be efficiently used by trains,

– Guaranteed minimal levels of capacity.

• lay down a yearly plan with performance-proposal

• professionalize more

• develop step by step towards output-steering

October 4th, 2005


BegrotingJaar t

The cycle of performance & money

Instemming Prestaties

& Subsidieverlening

Concessions

overeenkomsten

Vervoerplan

Begrotingjaar t

ProRail - vervoerders

Budgetyear t+1

Budgetyear t+1

jaar t+1

check check

Beheerplan

Budgetyear t

Budgetyear t

Maintenance planMaintenance plan

Transport planTransport plan

ContractsContracts

Agreement on performance &

money

Agreement on performance &

money

October 4th, 2005


Which steering-instruments does the government have?

Concession:• (half)year reports• additional information (transparancy)• cooperation with audits• Eventually: fining and forcing

But also:• Laws & regulation on specific issues• Licenses• Regulation (safety & non-discrimination)• Money• National Mobility Plan

October 4th, 2005


Migration from input steering tot output steering

• Rail sector still in transition

• Politics demands stability

• therefore:• step by step change (instead

of ‘big bang’)

October 4th, 2005


What is output steering?

• Government is responsable for transport and infrastructure…

• …but NS and ProRail take care of safe and reliable transport,well-maintained railtrack, reliable traffic control and effective capacity

• The government doesn’t have to deal with operational issues….

• … because she has high level performance targets and the necessary steering instruments when things go wrong.

October 4th, 2005


When is it reached?

• Knowing the link between operational performance, own activities and the results;

• Knowing the interaction-effects between own activities, own targets and the targets of the train operators;

• Knowing the long term effects of (life-cycle);

• Being able to create an organisation, culture and instruments to achieve this.

October 4th, 2005


Migration from input-steering to output-steering

Output-targets

Input-targets

MIGRATION PHASE

TIME

TYPE OF STEERING

October 4th, 2005


Performance-targets during transition phase (2005-2008)

During the transition phase two types of targets:

1. Hard targets– Has the target been reached?

2. Soft targets & measures– Have the measures been taken?

October 4th, 2005


ProRail NS

Productionplan

2003

2004

2005

2006

Verbeterplan sector

(100% optimalisatie)

ca. 50%Opt.

ca. 10%Opt.

Productionplan

Productie+

Verbeterplan

Productie+

Verbeterplan

Productie+

Verbeterplan

Productie+

Verbeterplan

Productie+

Verbeterplan

Productie+

Verbeterplan

Migration to joint optimalization

Documents

October 4th, 2005 Chris Verstegen, Directory for Rail Railway Policy and Legislation in The Netherlands Twinning workshop Ljubljana