Dutch high speed rail projects hits the buffers

The Dutch government is considering abandoning a high speed rail service between Amsterdam and Brussels after months of unsuccessful efforts to fix the project's malfunctioning trains.

The director of the Netherlands' national passenger rail company said on Monday he would resign amid a fiasco that has tarred the company and the government. Bert Meerstadt, the director of the Nationale Spoorwegen or NS, said he would step down in October.

He made the announcement shortly before arriving in The Hague for negotiations with the government over whether to scrap the service, known as Fyra.

The company has invested more than €180m to buy Fyra's trains, while the government spent €6.4bn to build the high-speed rail line they run on.

If the Dutch decide to cancel Fyra, the cost to the state budget, including loss of expected revenues from the service, would run to hundreds of millions of euros at least.

"It was supposed to be the flagship of the Dutch and Belgian railways, but it has turned into an utter debacle," Roel Berghuis, head of the labour union FNV Railways, told Dutch television.

Fyra was launched as a Dutch-Belgian project to increase maximum speeds on trains between Brussels and Amsterdam from 160 kilometres an hour to 250. But Belgian railway authorities pulled out on Friday after an independent review of the trains, built by Italian firm AnsaldoBreda, concluded they had severe mechanical and software deficiencies.

Fyra service began in December but was suspended after a month because of repeated problems with the trains, which suffered damage during icy weather and often became stranded between stations due to software problems. The review found rusting axles, unprotected electrical cables and fire damage from overheating batteries.

The Netherlands has received nine of the trains, at a cost of €21m per train, and has six more on order. The Belgians cancelled their order of three trains, and will try to get AnsaldoBreda to return an advance payment of €37m.

Dutch media have reported that the NS prefers to scrap the project as well, but an NS spokesman said only that the subject was under discussion in a meeting on Monday between Mr Meerstadt and Wilma Mansveld, the deputy minister of infrastructure.

With that meeting under way, Jeroen Dijsselbloem, minister of finance, said he wanted to be informed of the "risks, options, and financial and legal consequences" before approving any decision. The ministry of finance is the sole shareholder of NS.

"He doesn't want to wait until he gets a proposal, and then check it off with his signature and say fine," said Geertje Jansen, a ministry spokeswoman.

The finance ministry's concerns reflect the government's need for revenues in order to help pay off its investment in the high-speed railway line. The line was upgraded between 2000-2009 in a build-operate-transfer deal with two private companies, ProRail and Infraspeed, in order to integrate the Netherlands into the European high-speed rail network used by France's Thalys trains. The Thalys will continue to run on that line but its capacity is limited.

The Dutch state pays ProRail and Infraspeed about €10m per month to operate the line, which it expects to regain through payments from train companies that use the line, said Rob Goverde, a railway expert at Delft Technical University. The NS won the contract to operate Fyra in 2001 by offering to pay the state €167m per year, a bid considered far too high by independent experts, and which was sharply reduced last year when the Fyra appeared at risk of bankruptcy.

If the service is cancelled entirely, or replaced by slower trains as is being discussed, the government may be stuck paying the most of the high-speed line's bill for years.

"You've got a connection here that can accommodate high-speed trains," Mr Goverde said. "If you end up driving only regular trains on it, that's just throwing money away."

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