Dilemmas

NS regularly faces dilemmas, both in its daily operations and in developing its plans for the future. We feel it is important to share some of these with the outside world. This enables us to give people in the Netherlands an idea of the considerations feeding into our decisions in 2023. In the section below, we highlight three important dilemmas that NS faced in 2023.

Trackwork: more trains or a less-vulnerable timetable?

In the second half of 2023, ProRail carried out many works on the tracks, for example at Gouda, Schiphol and Rotterdam. Passengers are often inconvenienced by such works, due to timetable changes, fewer services and train cancellations. They may have to travel longer than usual or cover part of the journey by bus. Trackwork also creates vulnerability in the timetable and can easily compromise performance levels, such as punctuality.
During major works, NS always faces a dilemma: are we going to run as many trains as possible in order to carry as many passengers as possible? Or are we going to run fewer trains, thus reducing the risk of delays but also reducing seat availability? After all, in an already vulnerable timetable, running more trains increases the potential impact of disruptions. As regards works in the Rotterdam area, we decided to run as many trains as possible and risk a bigger impact in the event of a breakdown. That turned out to be too optimistic: when we were confronted with disruptions on top of the trackwork, the inconvenience for passengers only increased. That was a good lesson for us. A lot of trackwork remains to be done in 2024, with an increased emphasis on robustness. In each specific case, NS will be looking with ProRail at the best way to minimise inconvenience to passengers.

Rate differentiation to spread passengers: a small group of people pay substantially more, or everyone pays a bit more

Since the COVID-19 pandemic, passenger behaviour has changed permanently. Passengers work at home more often, especially on Wednesdays and Fridays, while on Tuesdays and Thursdays, they are more likely to travel during super-peak hours. All of our rolling stock and staff are set up to ensure smooth flows at peak times, while we run mostly empty trains the rest of the day. On average, over an entire day, only one in three seats is occupied. As a result, our fixed costs are high, and if we do nothing to address super-peak hours, they will continue to rise. This is why NS wants to spread passengers more evenly throughout the day. This is also a more sustainable approach.
At present, our fare system does not differentiate between differences in crowds. It makes no difference whether you travel to Amsterdam’s Zuidas at 8 am on a Tuesday or to Groningen on a Sunday afternoon, even though, on average, trains are much busier on Tuesdays than on Sundays. This presents us with a dilemma: should we raise the price of train tickets for everyone, or only for passengers who choose to take a crowded train? NS presented a proposal for the second strategy. This would make trains more expensive at busy times and cheaper at other times. Under this proposal, around 80 per cent of passengers would benefit while 10 per cent would be worse off.
The idea is that a new fare system would encourage NS passengers to avoid peak-hour travel. In such a system, the price would not be determined solely by distance but also by level of crowding. However, NS underestimated the resistance to the peak-hour surcharge, which was generally thought to be unfair. The government decided that the plan should not go ahead. This means that the problem of crowded trains and affordability remains unresolved. The government has instructed NS to consider alternatives.

A long-term, more expensive energy contract versus a short-term, more affordable contract

The current energy contract between NS, the rail sector and Eneco expires on 1 January 2025. NS hopes to sign another affordable, sustainable contract with long-term security and predictable rates. At the start of the tendering procedure, we were in the middle of the energy crisis, partly due to the war in Ukraine. Amid all this turbulence, it was unclear what potential providers would be able to deliver and at what price. However, it did become clear that providers were less willing to take risks, given the high and volatile energy prices. A different risk allocation would mean more financial risks for NS and the sector as buyers. Similarly, it proved almost impossible for us to secure long-term contracts in this turbulent market without incurring considerable risk ourselves.
This presented us with a choice: should we commit to a long-term contract with more risk of higher rates or even a failed tender, or should we opt for a short-term contract, with less risk but also less long-term security? Together with the rail sector, NS opted for a short-term contract.