The Netherlands is facing a far-reaching climate and energy transition and several major challenges in the fields of housing construction and increasing mobility. NS is able and indeed wishes to make a fundamental and sustainable contribution to that transition, in collaboration with its partners. Over the next few years, we hope to realise a range of ambitions to make travelling by public transport even more attractive and facilitate the projected substantial increase in passenger numbers. We have made good progress so far. By the end of 2019, NS reached the midpoint of its 10-year franchise period for the main rail network. We are proud to have achieved all the agreed results thanks to the commitment of all our people, and to see that our passengers recognise and appreciate those results.
NS holds a franchise for the main rail network that covers the period from 2015 up to and including 2024. As agreed, the franchise authority - the Ministry of Infrastructure and Water Management - will evaluate our performance in the midterm review. The focus will be on aspects such as customer satisfaction, punctuality, personal safety and seat availability. This is clearly an important moment for NS, so we are happy to say that thanks to the efforts of all the people at NS and the contributions of our partners, we have been able to achieve all the objectives agreed with the Ministry. We are also, and especially, happy on behalf of our customers, since these results mean that they like travelling with us, are usually able to find a seat and arrive on time to get to their destination or catch a connection train. We expect that those politically responsible for NS will review our results on the main rail network in the spring of 2020. Given our positive performance, we look forward to that review with confidence. That is not to say that we have 'reached our final destination'. Some targets demand our constant attention, such as the issue of punctuality on HSL South, and seat availability. Given the expected growth in passenger numbers, we will need to continue making every effort in the years ahead to maintain our performance at its current high level.
Through our renewed strategy, ‘Keeping the Netherlands accessible in a sustainable manner - for everyone’, we provide solutions to new issues, set the course for the most significant mobility challenges the Netherlands is facing and show what is needed to realise our ambitions. The strategy centres around a strong and dynamic network in the Netherlands that firmly interconnects the stations and the main rail network, including the high-speed line. This will provide passengers with the broadest possible range of mobility options, and ensure smooth and seamless travel between the international, domestic, urban and regional domains.
Contribution to the Netherlands
In recent years, NS has shown that its contribution to Dutch society is significant - not just in terms of our actual results on the main rail network, but also more generally as a provider of mobility services. Indeed, we often make an extra effort, for example by running more trains than we are contractually required to do, or by deploying additional trains during major events such as important soccer matches or festivals such as Pinkpop. We train our own drivers and guards, and in our own TechniekFabriek we transform vocational education graduates into full-fledged mechanics. Our connections with Dutch society are inextricable, we contribute views on tackling the challenges facing the country and help strengthen its economy. Of course we offer employment to our own people, but we also generate indirect employment at our suppliers.
Improvements for passengers
More and more people are travelling by train, and NS keeps making it ever more attractive for them to do so. For instance, since 2018 our passengers have been able to use the NS Flex ‘travelling on account’ option, which already has over 100,000 regular users. NS Flex offers an ever-expanding range of functionalities, including the possibility to activate joint journey discounts (samenreiskorting) in the app and apply for NS Flex for children. In 2019, we announced our intention to make NS season tickets more flexible and more straightforward. NS Flex will become the standard option for most season tickets, and we will streamline our range of season tickets overall. To increase seat availability on our trains at peak times, NS has decided to terminate the 40% discount for passengers during the afternoon peak with effect from 2021. At the same time we will make travel during off-peak hours more affordable and hence more attractive to passengers. And we are taking further measures to improve seat availability. For example, we have expanded the Zitplaatszoeker (seat searcher) functionality, adding further routes where it shows how full each carriage is. We are also investing billions of euros in new rolling stock over the period until 2024. The first New Generation Intercity trains are scheduled to appear on the track from the end of 2021.
We have produced various innovations to help us further improve rail travel in the future. In the NS Lab App, for example, passengers join us in exploring possibilities for digital journey support in the future, with a special focus on step-by-step guidance in the travel process. The tool enables passengers to see at a glance how many minutes they have left to catch their train, and when and where they will have to change trains. In 2019, we ran the first experiment to find out whether automatic train operation (ATO) could contribute to better rail capacity utilisation, less energy consumption and higher levels of comfort, flexibility, safety and customer satisfaction. The experiment was successful and has proved an important first step. We are learning from it and gaining experience in terms of the potential contribution of ATO for NS. We have partnered with Ahold, ING, KLM and Philips to promote and accelerate the use of artificial intelligence (AI) in the Netherlands and retain talented AI experts.
At and around the stations
Stations are developing into hubs for all public transport passengers and are contributing to quality of life and spatial development in our cities. Our stations add value to our network and to our passengers' journeys. As such, they are an inseparable part of NS. The more passengers appreciate their stay and the facilities at the railway station, the more satisfied they are with the entire journey. In February 2019, we announced our plan to upgrade 200 railway stations, both large and small. Facilities such as toilets, hot drinks outlets and pleasant waiting areas are crucial. In 2019, we created a Station Living Room at 8 stations, bringing the total to 24. We are also renovating the sanitary facilities at smaller stations in collaboration with ProRail.
The station also serves as a crucial link in the overall door-to-door journey; it is the place where bicycles, cars and public transport facilities all come together. This calls for sufficient space and proper coordination with all the other parties at and around our stations. Bicycles play a prominent role in what we call 'the first and last mile': passenger transport to and from the station. In 2019, the municipality of Utrecht, ProRail and NS Stations opened one of the world's largest bicycle parking facilities at Utrecht CS, which can accommodate 12,500 private bicycles and 1,000 public transport bicycles. The public transport bicycle remained invariably popular, with approximately 5 million rides from nearly 300 different rental locations in 2019.
In our view, development efforts should not focus only on the station itself, but also on the surrounding area. Station environments offer space for passengers and the infrastructure for the first and last mile of their journeys, but they also accommodate urban functions such as homes, companies, leisure facilities and education. Last year saw the official opening of Heerlen station after a seven-year renovation project. This was part of a complete make-over of the station area, with the Maankwartier district now offering a highly attractive urban combination of homes, businesses and shops. Other station districts (for example Roosendaal, Zwolle and Den Haag HS) are also scheduled for redevelopment. NS aims to use every possibility to build over the railway tracks, in order to alleviate the shortage of urban space while also creating accessible residential areas near the railway stations. In July, NS signed declarations of intent with the partners involved for Utrecht CS and Amsterdam Sloterdijk.
By switching to 100% green power for all its trains in recent years, NS has made a leap forward in its endeavours to make its operational processes more sustainable. The next move is to achieve 100% circularity for NS as a company. And we are making good progress: for example, 99% of the materials of old trains are now reused in other trains or for other purposes.
In another area, NS is contributing to a sustainable society by encouraging international train travel, also as an alternative to flights over distances of up to 700 kilometres. This is a field that offers huge opportunities, and the aviation industry itself is now also becoming aware of them. For example, from late March 2020 KLM will replace one daily flight between Schiphol Airport and Brussels by seats on the Thalys high-speed train. We interpret this as a promising first step, and look forward to partnering with KLM in the development of a 'plane to train' transition that feels entirely logical for passengers. Since last June we have operated a third daily Eurostar service to London, with NS International registering record sales over the summer period. Effective 30 April 2020, we will also offer a direct service from Amsterdam to London. From then on, passengers will no longer have to change at Brussels.
We attach great importance to the safety of train travel, on behalf of both our passengers and our employees. We have taken various measures to improve personal safety and railway safety. Our results in both these areas for 2019 were better than in 2018. However, the year was not entirely incident-free. Examples include the shooting of an Intercity train in the province of Noord-Brabant and harassment of our colleagues on the IC Brussels. Such incidents are unacceptable, and we expect our partners in the safety chain and politicians to join us in sending a firm signal: intimidation of our people will not be tolerated.
We regret to say that further incidents occurred at the beginning of 2020. A woman was killed in a fatal accident involving an NS bus in Bussum. Our thoughts are with the victim's relatives. In another incident in The Hague a train derailed, and a train guard sustained minor injuries. We are now investigating the cause of this incident in collaboration with the Human Environment and Transport Inspectorate (ILT) and the Dutch Safety Board.
Individual compensation for victims of WWII transports
During the Second World War, NS operated trains on instructions from the occupying forces. This is a black page in the history of our country and our company. A special committee chaired by Job Cohen has been tasked with handling individual compensation on moral grounds to an as yet undefined group of survivors and their direct descendants. The committee started work in January 2019 and has issued the following recommendation: ‘Jews, Roma and Sinti who, during the Second World War and on the occupiers' instruction, were transported by NS by train to Westerbork, Vught or Amersfoort or to other locations in the Netherlands - for further transport to concentration or extermination camps with the aim of exterminating them as a population group - are eligible for individual financial compensation. Upon their death, this also applies to their direct descendants.' NS has decided to follow the committee's recommendation, and is now implementing it. The committee received a total of 5,800 applications and is carefully examining them all. By late December, 3,800 applications had been assessed, of which 3,314 have been honoured. NS created a provision of €47 million for this scheme in 2019.
The committee has also recommended that NS initiate a historical study into its role in the transports during the Second World War. In view of the fact that similar studies have already been conducted, with NS's cooperation, we are considering the extent to which further study might yields new insights. In addition, the committee advised NS to consider possibilities for a collective expression of recognition for the large group of transported people who no longer have any descendants to claim individual compensation. Over the past decades, NS - often in conjunction with organisations of war victims - has on several occasions commemorated, honoured and learned lessons from the misery inflicted on so many people during the Second World War. NS regards the committee's advice as an encouragement to continue that policy.
Our operations abroad
NS subsidiary Abellio runs trains in the United Kingdom and Germany. The situation on the UK railway market is tense. Many passengers are unhappy with the railway system in general and with railway fares in particular. On top of that, in 2018 the UK Department for Transport launched the Williams Review into the current and future structure of the British rail industry and passenger transport. Transport Scotland (TS) and Abellio will not renew the current ScotRail franchise after its expiry in March 2022. Abellio and TS failed to reach agreement on the conditions for extending the franchise from seven to ten years, which prompted TS to activate the dissolution clause in the franchise agreement. Abellio was only prepared to renew the contract if cost-effectiveness improved.
In Germany, Abellio was confronted with external developments that adversely affected its ability to provide railway services. For example, a new CLA has resulted in higher costs, and extensive railway maintenance and repair works have caused punctuality figures to slide. This is why Abellio Germany now seeks to amend the agreements with clients, in consultation with the other carriers, in order to ensure continued effective implementation of the franchises. If these talks remain unproductive, we will reconsider our operations in Germany.
Our experiences in the United Kingdom and Germany clearly strengthen our plea to leave the current railway structure in the Netherlands unchanged.
In 2019, as in previous years, NS closed the financial year with positive financial results. NS has seen its results improve on the back of enhanced operational performance, which is thanks in part to better integration of the various NS business units and better management. NS aims to further improve its financial results, which will enable us to finance our investment plans and keep railway fares affordable, as reflected, for example, in the attractive propositions for off-peak travel we announced in 2019.
The Netherlands is facing several major challenges: climate change, urbanisation and increasing demand for mobility in the Randstad conurbation and beyond, economic shrinkage in several regions and a formidable housing construction task. NS is able and indeed wishes to play a leading role in tackling these nationwide challenges. The Mobility Alliance enabled us to create a truly ambitious plan (the Delta Plan) in 2019 to do just that. As a home carrier, NS will be able to make a major contribution to that alliance.
At the same time, the regulation of the railway sector will be discussed in parliament this spring. The debates will focus on the high-speed line, market forces on the main rail network, the position of the railway stations and removing a number of lines from the main rail network. It remains to be seen, however, which of these changes will truly contribute to improving the product for rail passengers. After all, what they want in particular is for the government to commit itself to improving accessibility and quality of life in the Netherlands. One crucial condition for that is an integrated network in which stations, trains of all carriers, and all regions remain firmly interconnected.
This calls for urgent investments. If we are to safeguard accessibility and quality of life in the Netherlands in the years ahead, we will need to invest an estimated €3 billion annually until 2040. According to the Mobility Alliance, these investments are more than offset by societal benefits in the amount of €18 billion per annum. In other words, the annual yields are expected to be six times as high as the additional annual investment required.
NS itself is also investing, including €3.8 billion in new trains. 2021 will see the introduction of the New Generation Intercity trains on the Dutch railway network, which will carry passengers on the high-speed line at 200 kilometres an hour. NS is also planning to start direct train services in 2023 from Breda and Rotterdam, via Amsterdam-Zuid, to Zwolle, Leeuwarden, Assen and Groningen in the north. This marks a first and important step towards the ambition of reducing travelling time between the Randstad conurbation and the north of the country using a fast train connection.
Efforts by our staff
NS is an inclusive and diverse organisation. We believe it is important to offer an environment where everybody feels at home and is able to perform their tasks safely, and where passengers can travel safely. The fact that we managed to attain the franchise KPIs is due to a large extent to the commitment of all NS employees - from the driver on the train to his or her colleague in the Station Living Room, and from the mechanic who helps minimise disruption due to repairs to IT specialists that keep our software running and up to date, allowing us to run more trains on the tracks. All these professionals are there to serve our customers, each and every day - for our regular services but also when an extra effort is needed, such as during the Nijmegen Four Days March, major soccer matches or the Pinkpop festival. We are proud of that. Over the past five years NS has made enormous progress in various respects, but it would never have been able to do so without the flexibility and confidence of all our colleagues. As a company we have shown considerable resilience, cooperation and results-oriented drive. In the year ahead, the commitment, flexibility and expertise of all our people will remain crucial.
In 2019 we said goodbye to Susi Zijderveld (May 2019) in the Executive Board and to Paul Rosenmöller (July 2019) and Jeroen Kremers (January 2020) in the Supervisory Board. We would like to take this opportunity to thank them for their commitment to NS and to our employees. We are happy to welcome Anneke de Vries to the Executive Board and Nebahat Albayrak and Herman Dijkhuizen as new members of the Supervisory Board, and wish them every success.
I and my fellow Executive Board members would like to thank all our colleagues at NS and our partners. I am also grateful to the employee participation bodies for their involvement and cooperative attitude. We are all united in serving the interests of this great company. Finally, we would like to express our gratitude to the Supervisory Board and our shareholder for their huge efforts and dedication in 2019 and for the trust that they have shown in us.
Roger van Boxtel, Chair and CEO of NS
is in Central Rotterdam
A place where everyone departs
and in a while returns.
Stations are like harbours
for our wandering souls
Places where 'there' begins
and where 'here' ends.
Jules Deelder (1944-2019)
Following the poet's death, NS projected the original Dutch version of this poem on a large screen at Rotterdam CS.