Tag Archives: Nederlandse Spoorwegen

Political ego and their costs

I recently wrote a little about the Dutch Fyra train, a high speed billion Euro train that is still not functioning. There have been several pointing fingers, yet why is this such a complicated project?

You see, a project is basically a simple thing. It has a goal, it has requirements, it has noted milestones and if the project manager is a clear communicator, then that person has the easiest and best paid job of them all. That is the theory!

The reality is less clear. It becomes an increasing mess, when those in charge make oral promises and not follow them up, or even better, in some commercial corporations where sales executives make so many changes on the fly to wear the project manager down, so when things are asked, those sales executives respond with “where is it written down?” and the problem of it all remains in the clear. This latter example happens in several situations where the Sales department and not the project manager is in charge.

With Fyra there is a third tier, namely the politicians. The NOS reported last night that this group had been putting pressure on the Fyra project. Even though the testers reported massive amounts of events, flaws and even clear malfunctions and design flaws, they seem to have been ignored. These issues add up to a system that should not have been implemented. The political pressure that required ‘high speed train revenues’, in the light of spending was getting louder and louder. So over the heads of those people in charge stating that there are issues, the Fyra was implemented against the technical proven flaws.

I discussed the fyra in a previous blog called ‘Multi billion train ride’ on June 5th.

Now they have a situation where a train was accepted in this light of events and in that same light must be paid for. The Dutch rail roads do not want to pay and AnselmoBreda is telling them to pay. Even though it was never completely a fault by AnselmoBreda, there are more and more clear indicators that political interfering by approving something that was not ready seems to have been a clear interfering factor. So apart from the 7 billion in rails, they are looking at an additional half a billion for 19 additional trains that do not do what they are supposed to do. Basically, they would end up being regarded as VERY expensive non hi-speed trains. Then there are the annual interest and maintenance costs on 7 billion of rails, the list grows on and on. Consider these costs whilst the government needs to push 6 billion in cut-backs. Are you having fun yet?

So basically, a multi-billion Euro push, by politicians, who were guided by ego and a misguided sense of profit, the second factor was never a reality to begin with. If we consider this and see that under current conditions the Hi-Speed trains are not an option, then an additional 7 billion has been wasted. I personally wonder how many people will become non-accountable and in addition will be reason for a massive bill to the tax payer. Considering these events, the upcoming parliamentary committee might take a lot longer than many bargained for, which additional costs to boot.

So why are incompetent politicians getting in the way of sound business?

This claim is in this instance not about the present group, it was the previous groups interfering with this process, yet overall when we read some of the current statements on capping banking incomes, and then when it is decided that the new head of Robeco must get 30 million a year, nothing can apparently be done. Ah, the joy of claim versus reality!

There are several indicators that the UK’s version the HS2 is on similar tracks. As reported by the Guardian in July, there have been voices that the high speed North-South line, which will cost to the scope of 40 billion Euro is going in a not dissimilar direction. Even though the UK government is claiming a 20% nett return, the additional factors might have not been weighted enough. Consider that the current issues involving price hikes for train rides are growing between 4% and 9%, the group that can no longer afford these kinds of prices is growing fast. More important, these price hikes are now pushing people away from rail and towards buses for the sheer cost of it. This is an entirely opposing reaction to what the UK government needs it to be.

Those in favour of HS2 claim in the quote “This is a massively misleading oversimplification because it doesn’t take into account the significant financial returns that will be generated from an investment in high-speed rail.

Even though it is given that unlike the Netherlands, the distances in the UK make for a much more viable need, we should not negate that this is about connecting London to Birmingham. I agree that it is too simple to state that this line is for all those Ashton Villa fans in London, yet the same flaw is shown, when we consider the actual issue. If the distance is 119 miles, then a normal train at 125Mph does it in just under an hour, then why add 40 billion to install a train doing 155 Mph? Getting there 10-15 minutes faster does not warrant such expenses, more important, considering the economic charges, the group willing to pay such an extra amount to get so little extra time would be dwindling a lot faster than some might think, which beckons the question “What significant financial returns?” it is not until the train goes beyond 200Mph that this all becomes a more interesting issue, which means a 20-25 minute saving on that part alone. Here I agree that some (not all) will consider it. The question becomes how much extra will people have to pay until the 50 billion returns is begotten? In my mind that requires a commuting population a lot higher then it seems to have, or the tickets will become extremely pricey to say the least. In my mind, the wisdom is in the middle, it takes a massive amount of traveller, all paying top pound a day. Considering that the economy is nowhere near that strong in the UK until past 2016, the costs involved might be way too high. This all in the end gives weight to the statement made by the Institute of Economic Affairs calling it a “political vanity project“.

So which cheques are underwritten by a political ego and can people afford the consequences of such amounts?


Filed under Finance, Politics

Multi billion Euro train ride

Most of us have taken a train before. Most of us on normal trains and possibly also on a special train here and there as a tourist. Yet, in Europe, many rely on the use of fast trains. One of the most famous one is the Thalys from Amsterdam to Paris and the Eurostar from London to Paris. It takes a few hours, yet the combination of comfort and locations make this option more interesting then grabbing the plane.

As a business solution, the Thalys has a few setbacks (it seems to be around the pricing mostly) and as such an alternative fast train was needed between Amsterdam and Brussels. As this track, for business reasons requires a few extra stops the Thalys was not regarded as a solution (they use the same tracks). The Dutch and Belgium delegation looked for an alternative and the Italian Fyra from AnselmoBreda was chosen.

So why the cost?

The entire track could not be used, so additional tracks were required. This little caper costed the taxpayers 7 billion and was delivered one year early. Many would ask why this is an issue. Well, on an annual 3% interest, a 7 billion track one year early will gain an additional 210 million euro in interest cost. Yes, questions should be asked! Now follow this up with the trains not working, well over 50% cancelled and additional flaws and security issues has delayed this option and is now out of commission as these weak spots are added and added. A parliamentary commission is now arranged to look at these flaws.


The Dutch have a record of achievement in trains, and even though they have been running intercity trains for decades, none of them were designed for the 250Km speeds (neither is Fyra as now seems the case). Why this need for speed? Let us not forget that the distance between Amsterdam and Brussels is only 175Km. With the additional stops made, other options could be implemented; some of them would actually work and not require billions in additional tracks.

For example there is the Swedish X-2000 train (now called the SJ 2000). The train can get up to 276Km/Hr, yet is implemented to go no faster than 210Km/hr. The reason for this is that the Swedish signal system was not designed for trains with higher speeds. An issue that is not in play with the Dutch High Speed lines. Another option was the French Thalys already in use for Amsterdam – Paris. Was it such a leap to order a few more for the Amsterdam – Brussels track? There are additional thoughts. Several nations have had their share of successes. Germany (a nation the Dutch want to do business with) has its options and so does the UK, Denmark, Sweden, China and Japan (more options exist). So why choose the Italian solution? There is the Finnish Allegro, which was built by the French. So we see several operating solutions that have proven themselves. Again the question of choice remains, why Italy?

Well, in honesty, AnsalmoBreda does have a track record. There is the Bombardier Zefiro and a few other options with speed options of 250 and 300Km/hr. So it was not a far-fetched solution at first. So why is it such a failure? That is the question that will haunt Dutch Parliament for months to come. It will also have consequences for both AnselmoBreda and Italy itself too. If a solution is not found, in addition to the upcoming bankruptcy of AnselmoBreda, we will see additional consequences for Italy as a branch of implemented technology will have no option to survive in regards service and maintenance in addition to the costs of hundreds of millions in trains. Trains, in such a condition, that the fyra has been regarded by both Belgium and Dutch experts as utterly non saveable.

Is that true?

The blame game has started in full today and as such fingers are pointed at one another. The Italians mentioned too much speeding in regards to snowy conditions. This is interesting as the Thalys seems to have no real issues with that. In addition the Swedish trains seem to roll along with rails covered in snow almost 40% of the time. The Belgium and Dutch report are damning to a degree not often seen. If accepted as true then it will be years to repair, redesign and implement changes to the current train. Why not exchange these trains for the Bombardier Zefiro?

I am not judging AnselmoBreda as such. I am however wondering how all this ‘poohaa’ can be condoned to offer a train service that is only up to 17 minutes faster. Let us reiterate that! They spend billions to get somewhere up to 17 minutes faster. Time most will waste on coffee, chats and so on. That would be an optimised time; not taking into account the stops and so on, in the end 15 minutes might be saved. Any business that seems to be in that kind of savings should move towards video conferencing is my idea!

I know, there will be loads of issues that cannot be resolved through video, and I will grant that, but the issue of losing up to 17 minutes is a joke! Especially considering the time people waste EVERY DAY! If we compare this to current Dutch materials, the time difference does become 22 minutes. That is current rolling, proven and active materials. This is a solution that would not have required the high speed track solution (and one that has proven to be quite comfortable). From that we can come to the question “Who has been buttering the bread of these deciding politicians?

Consider that 7 Billion could have done heaps for Dutch housing, Business and employment rates. I would wonder what other spending were this overly enthusiastic. It seems that some took the Dutch taxpayer for a ride (and then some).

From what I see at present a choice of investment was made which was debatable to begin with and not all blame will/should fall with AnselmoBreda.

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Filed under Finance, Media, Politics