Frans Blanker

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MuConsult BV | Postbus 2054 | 3800 CB Amersfoort | T +31 (0) 33 465 50 54 | www.muconsult.nl

EMTA General MeetingBerlin, September 18, 2012

Frans BlankerMuConsult BV

Tendering process in the Netherlandsthe factor vehicles

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Content

Tendering process in the Netherlands – the factor vehicles EMTA Berlin, September 18, 2012

The Dutch market for regional railway services

First steps: monopoly in rolling stock

Development of the market

Recent (re)tenders: new approach on rolling stock

Lessons learned

Content

Dutch market

First steps

Market development

Recent (re)tenders

Lessons learned

4

1. Dutch market for regional railway services

Content

Dutch market

First steps

Market development

Recent (re)tenders

Lessons learned

Reorganisation of the railway market (1998 – 2005):Concession core network for all passenger services awarded directly to Dutch State Railways (NS) 2005 – 2014. Concession high speed line tendered, won by NS/KLM New concession core network and HSL 2015 – 2024 directly awarded to NSDecentralization of responsibilities for regional passenger services:

voluntary, though future of some services was threatenedtransfer of resources to regional authoritiesobligation to tender services within three years

Passenger services on 24 lines decentralized, most were actually tendered by regional authorities

Tendering process in the Netherlands – the factor vehicles

EMTA Berlin, September 18, 2012

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2. First steps: monopoly in rolling stock

First decentralizations 1998-2000:NS owned all rolling stock. Due to specific infrastructure, no suitable trains available elsewhereAlmelo – Mariënberg tendered in 1997:

2 old DMU’s from 1953 sold by NSGelderland and Fryslân 1998/1999:

concessions awarded to joint ventures bus-operators / NSNS provided existing rolling stock via NSFS (NS lease company, based in Ireland)in Gelderland, Lint41-DMU’s replaced oldest plan U-DMU’s (built 1960-63), also leased from NSFSrapid increase of ridership due to integration bus and trainservicesextra DMU’s provided by NSFS

Tendering process in the Netherlands – the factor vehicles

EMTA Berlin, September 18, 2012

Content

Dutch market

First steps

Market development

Recent (re)tenders

Lessons learned

6

2. First steps: monopoly in rolling stock

Content

Dutch market

First steps

Market development

Recent (re)tenders

Lessons learned

First tenders 1999-2003:All won by NS or joint ventures involving NS:

existing rolling stock transferred to NSFS and leased to joint ventures (NoordNed and Syntus)maintenance obligatory contracted to Nedtrainnew Lint41-DMU’s for Zutphen – Oldenzaal required by authority, acquired via NSFSnew DMU’s for Zutphen – Apeldoorn poorly prescribed, tender won by NS with older DM’90’s

Conclusions:Ownership rolling stock proved crucial in tendering servicesMonopoly delayed innovation (lightweight, low floor) and competition on vehicle maintenance

Tendering process in the Netherlands – the factor vehicles

EMTA Berlin, September 18, 2012

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3. Development of the market

New tenders 2005-2006:Authorities requiring new accessible trainsFirst ‘electric services’ tenderedNew rules for certification and permissionExpansion of bus-operators to regional rail, more competition

Maaslijn-tender (2006): Suitable NS-DMU’s (140 km/h), only 10-year lease offeredVeolia won concession in may 2006, offering new DMU’s

only non-suitable DH-stock (100 km/h) to fill the gapdelays, overcrowded trains and many replacement buses

According to Veolia, new DMU’s were cheaper

Tendering process in the Netherlands – the factor vehicles

EMTA Berlin, September 18, 2012

Content

Dutch market

First steps

Market development

Recent (re)tenders

Lessons learned

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3. Development of the market

Valleilijn-tender (2005/06):New EMU’s required for 10-year concession 2005 - 2015Uncertainty about new certification- and permission rulesTender failed due to high risks for operatorsSurvey on train detection: no problems expected for EMU’s

certification rules adapted

Adapted second tender 2006 - 2021upgraded NS-EMU’s accepted, new EMU’s favourised15 year-concession and warranty for re-use of new EMU’s

Tender won by connexxion with new FTD-Protos EMU’s3 months delay in production and permissionno fallback option, limited services and bus replacementpenalties adding up to € 400KProtos EMU’s developed and permitted in 2 years time

Tendering process in the Netherlands – the factor vehicles

EMTA Berlin, September 18, 2012

Content

Dutch market

First steps

Market development

Recent (re)tenders

Lessons learned

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3. Development of the market

Content

Dutch market

First steps

Market development

Recent (re)tenders

Lessons learned

Changes:Bankruptcy of FTD prevented orders for more Protos-EMU’sStadler GTW is now ‘standard’ for decentralized servicesAll new EMU’s/DMU’s first owned by operators

after delivery, rolling stock sold to leasing companies and leased back to acquire capital for new investmentsmight cause difficulties transferring rolling stock after retendering

Conclusions:Transparency and certainty on certification rolling stock neededShort implementation period causes dependence of incumbent operator with monopoly on used rolling stock

Tendering process in the Netherlands – the factor vehicles

EMTA Berlin, September 18, 2012

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4. Recent (re)tenders: new approach rolling stock

Content

Dutch market

First steps

Market development

Recent (re)tenders

Lessons learned

First re-tenders (diesel networks):Rolling stock still owned by NSFS (17 year old DM’90 and 10 year old Lint41 DMU’s)Pressure to prescribe re-use NSFS-stockImplementation period over 2 years:

Lint41 accepted possibility to acquire new rolling stock

Arriva 34 new Stadler GTW for Gelderland concessionSyntus (subsidiary of NS and Keolis): re-use of 10 Lint41

Arnhem – Doetinchem services (starting dec. 2012):Tender delayedRolling stock (9 Stadler GTW) ordered by autorityTransfer of order prescribed in tender

Tendering process in the Netherlands – the factor vehicles

EMTA Berlin, September 18, 2012

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4. Recent (re)tenders: new approach rolling stock

Content

Dutch market

First steps

Market development

Recent (re)tenders

Lessons learned

Light rail (Zwolle – Kampen):Conversion to light rail operation with hybrid trams plannedCrashworthiness requirements EN 15227 not met by tramsAdmission process requires demonstration of equal safety

no guidelines on judgement of alternative safety measureshigh risk for supplier of trams

Service tendered twice, yet without result

RijnGouweLijn light rail-project suffered from similar problems, though 6 Bombardier trams ran in public service for 4 years!Project aborted due to altered political priorities

Radical solution in RandstadRail: no track sharing, but infrastructure converted to light rail standardsTrack sharing without mixed operation (freight) Hoekse Lijn

Tendering process in the Netherlands – the factor vehicles

EMTA Berlin, September 18, 2012

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5. Lessons learned

Content

Dutch market

First steps

Market development

Recent (re)tenders

Lessons learned

Level playing field in procurement of rolling stock is crucial for successful tendering of (regional) railway services

authorities need knowledge of rolling stock market sufficient time (2 – 3 years) needed between awarding a concession and start of operationmonopoly on (used) rolling stock slows down competition in vehicle maintenance

Clear admission standards necessary to procure rolling stock

high risks for both operator and supplierprevents innovations as light rail, even without track sharingconversion of infrastructure as an (expensive) alternative

Tendering process in the Netherlands – the factor vehicles

EMTA Berlin, September 18, 2012

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5. Lessons learned

Content

Dutch market

First steps

Market development

Recent (re)tenders

Lessons learned

Obligatory transfer of rolling stock at re-tenderreduces depreciation risks for (first) operatorno experience in practice yet

Slow development in procurement and ownershipauthorities reluctant to purchase rolling stock themselves as they fear financial riskshowever, operator passes risks in concession price anyway

Pre-ordering rolling stock by authorityeffective to prevent availability-risksprobably solution if special vehicles required

Tendering process in the Netherlands – the factor vehicles

EMTA Berlin, September 18, 2012

14Tendering process in the Netherlands – the factor vehicles

EMTA Berlin, September 18, 2012

Thank you for your attention