Raiil 434: Britain should have Dutch courage to learn NS lesson

Britain’s rail system has taken so many wrong turnings but it would be wrong to despair, says CHRISTIAN WOLMAR, just back from a visit to Holland. Far from being a ‘state-owned monolith’, the Dutch railway is a coherent, publicly accountable system that has been created by putting pragmatism before ideology.

The peculiarity of the way that Britain has gone about breaking up and privatising the railways becomes most apparent when visiting other countries. There is always a tendency to suggest that differences in culture, geography, history and social factors make comparisons difficult and inappropriate.

That is wrong. The similarities between different railway systems are more important than their differences. This was clearly apparent during my recent two-day study visit to the Dutch railways. The whole Dutch system, Nederlandse Spoorwegen (NS), could be likened to something like the South West Trains franchise. The longest direct journey on the whole system takes less than four hours and the whole operation has the feel, as one of our hosts put it, of a large tramway system.

The InterCity network operates on the basis of clock-face 15 or 30 minute frequencies, with the same timetable for virtually the whole day, from around 0050 to 0100. There is no reservation system and the fare structure is very simple. After 0900, fares are reduced by 40% as long as you own a railcard that costs £30 a year. There are no afternoon peak restrictions because simplicity is seen as a key part of the service being offered.

Holland is a compact country with a population of 16 million, and railway use is much more intense than in the UK, with 1m daily journeys, some three times greater than SWT. Nevertheless, the service lost money, putting pressure on the government to privatise it. This was considered in the early 1990s but rejected: “Thank God we did not go for the British model” was a constant refrain among our Dutch hosts. Instead, NS was given more autonomy, partially split up and given the target of achieving profitability by the end of the decade. The railway has been broken up in response to the 1991 European legislation which requires the separation, in accounting terms, of track and services. In 1999, the old NS was split into four.

The Railtrack equivalent was transferred from the railway to the Ministry of Transport. There are, however, no plans ever to privatise the infrastructure. Interestingly, the new company built up an asset register through the simple expedient of videoing the whole network from the front of a train. It then screened it slowly to an audience consisting of representatives of the two organisations who then agreed to the separation of the assets between the two, with only the odd dispute being referred to the lawyers. Yet, in contrast, six years after privatisation we do not have an asset register in the UK.

Two other organisations were hewn out of the old NS. One is traffic control, which operates the signals and that too is now part of the Ministry of Transport. Finally, there is RailNed which is a kind of regulator, though with nothing like either the complexity or the staffing of Britain’s Office of the Rail Regulator. It is the independent arbiter setting the timetables and determining whether there is sufficient capacity for new operators. The freight operations, by the way, have been privatised and sold to the German railways, a logical move given that most flows are international and head southwards to or through Germany, although there are reports that it is struggling somewhat.

The new, slightly slimmer, NS is not directly controlled by the government. It has always had more autonomy than British Rail did, being able to raise money for investment without that being counted as part of the government’s expenditure. Moreover, the politicians had less opportunity for day-to-day meddling, even though the organisation always received a grant. It is now a trust, not dissimilar to Network Rail. It is charged with being profitable, apart from some subsidy for regional services (for which it competes against private operators) and has a franchise to run all services, apart from regional branch lines, until 2010.

There is a supervisory board of non-executive directors who, incidentally, resigned in January when they failed to meet the target of 80% punctuality (within three minutes) to which they had signed up in a deal with the government. They only missed out by 1% but the government was calling for the heads of the NS directors who ran the railway; the supervisory board felt this was unfair and therefore resigned themselves. They were replaced temporarily by a group of senior civil servants, leading to mistaken suggestions that the railways had been renationalised. In fact, they have never been privatised.

And why did punctuality fall so badly? Because of what could be called the British disease, fragmentation. The infrastructure control staff were separated from those in charge of the trains and consequently it became more difficult to catch up on delays. NS is trying to remedy this by bringing the two sets of controllers back together again – familiar, eh?

Of course, not everything is rosy. There were some trains with graffiti; the train interiors are rather spartan, largely in an ugly brown that has a 1950s feel to them; lots more people smoke on the trains than in the UK; and credit cards are not accepted even at main stations as there is less of a credit card culture than in the UK. There were, too, some mistakes in the new stations we went to see.

At ’S-Hertogenbosch, for example, they had forgotten to allow for any free, unguarded bike parking as many people are reluctant to pay the 60p a day – or £48 for an annual pass – which is charged for the covered, guarded bike park. Therefore the whole area became scattered with bikes locked to anything solid until a bit of parking was found for a few hundred bikes, but that is completely insufficient. And the neighbouring bus station had no roof because “no-one would pay for the shelter so it was not built” according to the local manager.

The key point, however, is not so much that the facilities are so much better but that careful thought has gone into creating a better service for passengers, and this thinking is underpinned by a coherent strategy. For example, one brilliant idea is the creation of the horribly-named Wizzls. These are convenience stores which are being opened at the 77 stations where there is daily throughput of at least 4,000-10,000 people. They not only sell basic groceries, newspapers and the like but also tickets.

Many of these stations had been too small to sustain a ticket office but having a shop reduces the cost and provides a service not only to passengers but to local people, as the opening hours are often longer than other stores. Connex has done this in the UK at a couple of stations but has kept the ticket operations separate, meaning that people have to queue twice to buy a ticket and produce. In the Wizzls, there are several cash desks all able to deal with the various transactions, the type of detail which again shows how the Dutch railways are passenger-oriented.

The railways also provide a cheap taxi service that can be booked in advance at 115 of its 250 stations. The taxis are dedicated to rail users and you may have to share, but they are far cheaper than conventional ones. The service, which is designed to fill a gap between a bus and a normal taxi service, has remained loss-making and is currently being reappraised.

The difference in approach is most apparent in the Dutch railways’ attitude to money and profit. It was striking that so many of the questions asked by my colleagues on the field study (and I was guilty of this myself, too) concerned the profitability of many of these initiatives. Did the train taxi service make money? Were the Wizzls profitable? Did bike parking pay for itself? And so on. (The answers were, no, it made a loss, yes but not much, and it kind of broke even.) But, our hosts stressed, “we are not so concerned about this”. All these services ensure people use and stay on the railways. They are part of an overall package of services, the whole journey experience. Most of these added services, like the bike parking and hire service and the Wizzls, are provided by wholly-owned subsidiary companies of NS rather than contracted out. This is to ensure that NS can retain control – and, indeed, the profits – so that decisions are made with transport needs foremost in the minds of those taking them.

NS does not seek to maximise station income. That is not to say they do not make a healthy contribution, providing some 25% of the railways’ overall profit, but the organisation is willing to forego, say, having a lucrative hamburger joint at a big station if, for example, there were a need for a different type of shop and there are already plenty of snacks available. The aim is to ensure that eventually every large station will have the same provision of shops and services so that passengers will know exactly what to expect to find.

The Dutch approach requires much more central control than we have in Britain and, to an extent, less of that ‘choice’ which is so beloved of those who push for privatisation and fragmentation. So, for example, Holland has no long-distance bus services connecting towns on the rail network. Is that restriction of choice or an efficient use of resources?

In a way, it is difficult not to get depressed by all this. In Britain, we have taken so many wrong turnings, with mistakes being made long before the disastrous privatisation of 1993-97, that it is difficult to see how we can find our way back to recreating a coherent railway. But it would be wrong to despair. The Dutch got there through a political process in which common sense prevailed over ideology. The government and the rail companies in Britain should be humble enough to realise that there are lessons to be learnt from Europe rather than dismissing foreign railways as state-owned monoliths which refuse to change.