European Union wants return of competition in railway system

Reversal of 1937 amalgamation

UTRECHT, the Netherlands - The parliament of the European Union has voted to compel national railways in the EU to accommodate competition in both cargo and passenger transportation. The far-reaching move could still be postponed or vetoed by the transporation ministers of the EU member states. If the liberalization measures indeed take effect by 2008, it could mean the end of the railway system as existed in the Netherlands since 1937.

The Nederlandse Spoorwegen (NS) was formed in 1937 to cap a long amalgamation process. At the same time, the two remaining railway operators were disbanded: Hollandsch Spoor (its complete name was the Holland Iron Railway Company) and Staatsspoor (in full Company to Exploit the State Railways). A railway station in The Hague still carries the name of one of these original companies: Hollands Spoor. All shares in the NS are owned by the Dutch government.

In anticipation of the European quest for privitazation, NS in the mid 1990s allowed (some) competition. Amsterdam-based Lovers, a canal boat operator, applied for a railway concession and began running a seasonal line between Amsterdam and the North Sea resort of Zandvoort. Using surplus and outdated railway cars and locomotives from another European railway, Lovers operated on a shoestring budget and was shunted to secondary lines and platforms. When Lovers was acquired by a French railway operator, applications were made for an expanded network. For a number of reasons, conflicting regulations, a questionable business plan and rising costs, the French railway operator soon abandoned the Dutch venture.

Split

In 1991, the European Union passed a law forcing the national railway companies to split into an operating unit and one which owns and maintains the actual rail lines. At the same time, companies were granted the right to operate cargo services in third countries. The new move by the European Parliament allows this type of competition also for passenger services. Domestic service in most European countries still is maintained by national or regional railways.

Most EU countries oppose the further liberalization now ‘forced’ by the European Parliament. Those against such moves point to the less-than-stellar attempts at allowing competition in the Netherlands and England.

The Dutch government currently is contemplating an overhaul of the NS and in particular of the way in which already abandoned or currently non-profitable lines could be exploited by ‘outside’ transportation companies. The Dutch want to auction off certain routes, a process also used for communication channels and for gas stations located on freeways. NS in every case will be the operator of such lines for the first ten years after the auction.

The liberalization process both in the Netherlands and the European Union has a long way to go. Questions also will arise about the ownership of nation-wide railways, as governments want to secure adequate public transportation in areas non-profitable to commercial entrepreneurs. In any event, the liberalization process ends an era of Dutch state-controlled railway services which began when hard-pressed local enterpreneurs relinquished control of area lines in favour of a national system only a scant 70 years ago.