New method calculating charges in the Netherlands: good or bad news?
From 2023, a new method will be used for calculating the track access charges on the Dutch railway network. In practice, this means that the kilometer charges will be reduced by 57 per cent. On the other hand, the fees for siding or shunting will increase significantly.
State Secretary Steven van Weyenberg of Infrastructure and Water Management reports in a letter to the House of Representatives about the new rail tariffs that the costs will be reduced for many rail carriers. But the new cost structure also means that a number of rail freight carriers in particular will have to deal with significant cost increases.
Interest group RailGood commented that he finds it “incomprehensible that the user charges for siding and shunting on the track will increase”. According to him, this increase will be 30 per cent, or five times more expensive. According to the industry group, this contrasts sharply with the plea for a modal shift and support for the European Green Deal.
In order to accommodate freight carriers, infrastructure manager ProRail has advised the ministry of infrastructure and water management to institute a temporary subsidy scheme. According to calculations by the rail manager, between 10 and 14 million euros is needed for this.
Van Weyenburg therefore wants to make a subsidy available that is mainly aimed at compensating for cost increase at emplacement yard Kijfhoek, regarding the hilling and shunting services. If this is not done, he believes this will lead to a price increase in the services provided by rail freight carriers “with the risk that shippers will say goodbye to rail”. “I will submit the subsidy scheme for this to the European Commission, to see if they apply as state aid rules,” said the minister.
“I will finance the intended subsidy scheme by asking all carriers to contribute via an additional levy to be introduced. This will distribute the advantages and disadvantages of the new tariff system more evenly. The proceeds at ProRail from this extra charge allow a reduction of my annual subsidy for management, maintenance and replacement to ProRail.”
Whether this is an acceptable solution for passenger carriers, for whom the costs will decrease with the new regulation, remains to be seen. A spokesperson for Arriva said in a response on Tuesday that he would further study the proposal for the ProRail Network Statement of 2023, in which the new cost calculation is described.
If the subsidy scheme is approved by the European Commission, it will apply for the period 2023 up to and including 2025. “With the mitigation measures outlined above, I want to enable a transition to the ultimately envisaged situation of full cost allocation,” says Van Weyenburg. Each year, the support decreases step by step during this period. It does not address the question whether rail freight operators will be able to bear the high costs after 2025.
New cost calculation
ProRail CEO John Voppen explains the new cost calculation in a letter to Van Weyenberg. The new calculation method ensures that the user fee for the rail is structured in a different way. The Fee for the Minimum Access Package (VMT) for 2023 up to and including 2025 is determined on the basis of a marginal approach. In addition, the VMT decreases and the running of trains becomes cheaper.
“The compensation for category 2-4 services (including drafting and shunting, ed.) is based on the total integral costs and therefore becomes more expensive.” According to him, applying the new calculation method means that 432 million euros in user fees must be passed on to the carriers, where this is currently 375 million euros.
Because it was agreed with carriers in 2020 that the total amount of the user fee of 375 million euros would not fundamentally change, ProRail will include an average of 79 per cent of the costs in the tariffs in the period between 2023 and 2025. A transition scheme is applied, which should ultimately lead to coverage of the total costs.
Siding and shunting costs increase
“Specifically for a number of smaller carriers, especially in the goods segment, there are major effects for parties that prepare a lot. There are also major effects for carriers that use a lot of sidings,” says Voppen. “These effects do not contribute to the ambitions with regard to freight transport, but within the ProRail methodology there are no options for solving these effects.” According to him, the ministry could do this with policy instruments such as a subsidy scheme.
He points out, however, that financial resources are required for a subsidy scheme. According to him, financing via the market is not ideal, because then there are passenger carriers who co-finance freight carriers. The CEO therefore advises the department to finance this from its own resources.