Dutch train firm NS asks for more government funding during debate on fare increase
Dutch national railway NS looked to Parliament for support in winning an annual budget increase that could be used to prevent a substantial fare increase. NS CEO Wouter Koolmees discussed the issue during a Tuesday afternoon committee meeting in the Tweede Kamer, the lower house of Dutch parliament.
Last year, the Cabinet gave NS a one-time additional amount of 120 million euros to defer the planned ticket price hike of 8.67 percent for the 2024 calendar year. Koolmees wants that money to become a structural part of the annual budget, similar to how regional public transport operators were given an extra 300 million euros annually for the same reason.
The politicians in the room on Tuesday recommended the NS find more ways to cut costs, like holding off on investments in new trains. Koolmees said he was "surprised" the NS was being treated differently than regional carriers. Making dramatic cuts, or selling off foreign assets, would be "penny wise, pound foolish," he said. "I would like to meet with politicians to see of there is something we can do about this."
When presenting NS’s annual figures last month, Koolmees warned of ticket price increases of more than 10 percent next year. The company is carrying 1.1 billion euros in debt from losses suffered during the coronavirus pandemic and is struggling to keep up with inflation and increased costs while traveler numbers still haven’t returned to their pre-pandemic levels.
But that money did not make last year's cost increases disappear, the rail company said. “NS will, therefore, be forced to implement the deferred fare increase in 2025 due to rising costs and the ‘indexation gap’ that has already occurred in recent years, on top of regular inflation,” the railway warned. “That could mean an increase of more than 10 percent by 2025.”
NS suffered many train delays last year due to track work, disruptions, and backlogs. The rail company granted 288,345 compensation claims for delays last year, over 100,000 more than the year before. Last year, 89.7 percent of travelers arrived on time - within 5 minutes of the scheduled arrival time. That performance is significantly below NS’s own target of 91.5 percent and also worse than 2022’s score of 91.6 percent.
On Monday, ProRail warned that railworks will cause even more train traffic disruptions this year. The rail manager has around 400 maintenance and rail projects scheduled for 2024. That’s too much work to do only on weekends, holidays, and overnight. So ProRail will have to do more work during office and school hours. The rail manager hopes that will also make it a more popular employer and help alleviate its massive shortage of technicians.
"You can be assured that we will do our utmost to do better, but the reality in the coming years is that many situations are beyond our control that cannot simply be resolved," Koolmees said. When criticized about on-time performance, he pointed to staff shortages and equipment shortages.
Passengers were represented by the association, Rover. Earlier, the group said it was outraged that NS wants to hike ticket prices by 10 percent while travelers face more delays and disruptions. According to the organization, more expensive tickets won’t bring travelers back to the train, but improved performance will. Rover argued for the government to place NS and ProRail under increased supervision and to give NS more money to keep fares the same.
Koolmees was joined by representatives from both ProRail and Rover during Tuesday's hearing. The issue will be further discussed in the Tweede Kamer on Thursday.
