Transformation of ProRail: what does it mean?
“Since ProRail is functioning so well, why would you want to alter it?”. And so began a talk by Deputy Secretary-General Jan Hendrik Dronkers from the Ministry of Infrastructure and Water Management on the transformation of ProRail to an independent administrative body (zelfstandig bestuursorgaan, or zbo). At the SpoorPro Seminar held on 12 March and dedicated to the establishment of a zbo, Dronkers tried to convince the audience of the usefulness of this operation, and primarily tried to assure them that it would be done carefully and that many things would remain unaltered.
“Yet it’s not such a crazy idea,” continued Dronkers. “I am a ProRail shareholder, but I’m interested in performance, not profit margin. I’d like to speak to ProRail more often than once a year. The political responsibility and the investment of 2 billion are so big that you need to talk to each other more often. The current situation is a bit contrived. There is only one infrastructure manager and there is no competition. ProRail has a public role and is financed with public money, so it needs to be managed publically. There is a principle behind this. If we made Rijkswaterstaat [the executive agency of the Ministry of Infrastructure and Water Management] into a limited company, I know for certain that this would be questioned in parliament.”
Strange situation
According to Dronkers, the reason why the transformation must happen how is obvious. “You may think that as things are going well at the moment, we should keep everything as it is. But this does not hold once you take into consideration the pending growth and the increasing technical possibilities. When ProRail was created, there was a discussion about whether it should be a limited company or not. This discussion re-emerged when things started going badly. At that time, it was decided that it was not the right moment to make ProRail into a zbo. Patchwork solutions were adjudged to be better than wholesale change. But now the right time has come. If the situation on the network remained as it is, then it would be fine to leave ProRail unaltered. But with the anticipated growth of rail, it’s necessary to make the switch now.”
“Currently there is a strange situation that the railway is different, negotiated concessions. You give a subsidy for the implementation and you impose fines if things do not go well. This is a strange construction because then you plough in subsidies from the other side. ProRail has a task to perform and needs to report three times a year. From the ministry, there is a lot of control of details.”
What Dronkers would like is that ProRail’s advisory role for the government is expanded so that the latter widen their knowledge of the railway. “The reason we are doing this is to deliver even better performance. We want to keep everything that we do well, such as collective KPIs that have contributed to improved operations. We’re not going to dispose of things that function well. Our goal is that the railway remains a network organisation in which all the stakeholders work well together. ProRail will not become an umbrella organisation. In this sense, not so much will change. There will be no independent administrative body watching over everything else.”
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No change
“The transformation will not alter the operational process. We’ve already spent two years drafting this law, also within ProRail. There has been no worsening of performance during this work, thanks to the efforts of, first and foremost, Pier Eringa and John Voppen. During the implementation, the current work has to continue. If that’s not possible, we will take more time. It’s a societal duty to ensure that the operation keeps working well.”
Dronkers expects that the transformation will lighten the burden of ProRail’s reporting to the ministry. “ProRail can use this time gained to further focus on operations. In other words, it gives them more scope to play their intended role. Many have said that [with these changes] ProRail will be coming closer to the ministry, which automatically means it will be further from the sector. On the contrary, it means that with ProRail, the ministry is getting closer to the sector.”
Principles
The transformation of ProRail to a zbo is the decision taken on the basis of principles, asserts Dronkers. A public task with public money must be managed publically. Some have criticised this decision, including trade union FNV. “I think it’s a foolish plan, and if it’s a choice based on principles then arguments no longer apply”, argues Roel Berghuis from FNV. “Everyone is advising against it, even the Council of State, but they are all being ignored. It’s ridiculous. As you can imagine, these parties feel like they are being treated with contempt.”
Dronkers counters that while the decision for the transformation is a matter of principle, it has also been made on the basis of arguments. “I can’t imagine that we’re putting people’s backs up since we’re speaking to everyone. We’re listening to the arguments and taking these on board. The Council of State has also said that, if ProRail was being set up from scratch today, it would definitely be a zbo, and that we need to improve our discourse around why we are making this transformation now. And that is precisely what we’re doing in the new implementation.”
Suggestions
The audience provided some good suggestions for and useful additions to the zbo plan. For example, NS in-house lawyer Adriaan Hagdorn noted: “I’m concerned that there is only one article in the plan that is dedicated to collaboration. It’s formulated in very general terms, while for the railway network we all need to work together. I would like to ask that this is carefully looked at again, just like the multi-annual plans that we draw up every four years. I was not in favour of this proposed law at all, but I did see one advantage. Wouldn’t it be great if rail operators were involved in a sort of rolling forecast, on the basis of a four-year plan? Not like now, where you are consulted just once, and can’t give your opinion again for another four years.”
Dronkers responded that he could see sense in what was being called for, and that collaboration was logical. “I wouldn’t want to impose it as such, but it is essential. I’m going to work hard to flesh out the subject of collaboration in the proposal. Later on, you will be able to see if collaboration really is part of the implementation, or you can let us know if there are shortcomings in this regard. The outlines have already been drawn up, but it’s good if the market keeps an eye on future developments.”
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Not just hot air
“I am completely in agreement with Adriaan about collaboration, and am also happy to hear that you are open to it”, added fellow audience member Hans Willem Vroon from RailGood, the sector organisation for rail freight operators, intermodal operators and rail hauliers. “I suggest setting up a users’ council like Germany’s DB Netz has. We have already passed this suggestion on to ProRail, the ministry and the minister.” Vroon said he is also interested to see the strategy that the ministry has for ProRail. “Are you going to simplify the management, and does this mean an end to the endless pointing of fingers between ProRail and the ministry? At the moment, that is happening far too much. We want the ministry to put their money where their mouth is. So there should be no promises of 740 metre-long trains without a budget for them and without a change in the law. ERTMS should not be rolled out while there is a budget shortfall of one billion euros in the financing of goods trains. This is all just hot air and Brussels rhetoric, which can destroy businesses.”
Furthermore, Hans Willem Vroon was keen to find out what would happen with the changed management of ProRail: “You can change the structure, but if the strategy is not implemented, as has been the case for years for rail freight transport, then it’s useless.” Dronkers agreed that this was an important point. “I can only concur. If you have poor plans, or if you lack the possibility to execute your plans, things will not move forward. We’re all in agreement about this. And we are listening to what everyone here has said. We are all ears, so please keep talking to us.”
Besides from the management, the ministry must not forget to consider what happens about penalties, asserted Rikus Spithorst from the Society for Better Public Transport (Maatschappij voor beter OV). “You have wishes, but you must also be able to ensure their compliance. At the moment, this is done by imposing a range of fines on the concessions [for non-compliance]. I’ve heard you say that this will not be the case in the future, and this concerns me.”
Sanctions
According to Spithorst, if there is not a good sanction policy, the government will be unable to ensure its wishes are implemented. “And a policy-maker apologising or resigning does not solve the problem for passengers or freight companies. In the new situation, how are you going to ensure that ProRail keeps doing what is expected of it? Would it not be better to ensure a greater distance?” Dronkers gave a clear response to this: the fines must go. Having a subsidy on one side, a fine on the other and then applying for a new subsidy if the money has run out before completing a particular task does not work, he said. In a later presentation, ProRail’s Chris Verstegen was also clear that fines do not work. However, Dronkers is yet to determine what a good sanction policy is. “One important thing is to devise good KPIs, to strive to meet them and to closely monitor that this is indeed happening. But we still need to think carefully about what good sanctions are. If you have any suggestions in this regard, by all means, let us know.”
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