NS fined €41 million for procurement fraud

The Dutch Authority on Consumers and Market (ACM) fined rail company NS 41 million euros for fraud in the procurement of a contract for regional public transit in Limburg, the authority announced on Thursday. According to ACM, NS misused its "economic dominant position" to distort competition by intentionally entering a loss-making bid, NU.nl reports.

NS was fined for two violations. First for denying other parties in the tender process a fair chance with the low NS bid. According to ACM, NS knew that the costs would be higher than the expenses, and intentionally created unfair competition with their loss making bid.

The second violation is a combination of actions. NS got confidential information from a former Veolia director, which NS employed through a "sham construction". Veolia was in charge of public transit in the province at the time of the bid. This former director gave NS subsidiary Abellio information about passenger returns that was unavailable to NS competitors. Competitors were also disadvantaged because NS responded "slowly and incompletely" to requests for access to service barges and waiting rooms.

Two former NS managers were not fined because there was not enough evidence to prove that they instigated the fraud.

"The rail market can only work well if all players follow the rules", ACM director Chris Fonteijn said, according to the newspaper. "Over the passed 20 years regional public procurement resulted in more travelers and good services. This benefits passengers. The ACM finds the massive fine suitable."

NS disagrees with ACM's conclusions, the rail company said in a statement. According to the company, ACM is incorrect in saying that NS made a loss-making bid because the authority's analysis included too low passenger numbers, among other things. "NS therefore disagrees with the judgment and the foundation of the ACM's decision." The company filed a complaint.