The Dutch Markets and Consumers Authority (ACM) has approved a new rail fee for ProRail. The infrastructure manager will be able to implement the new charge from 2026. Whereas the price of the fee is still unknown, DB Cargo Netherlands and branch organisation RailGood cast doubts over its calculation methods.
The approval allows ProRail to implement a new fee between 2026 and 2029. It will be an addition to already existing charges for infrastructure usage. Soon, rail operators will have to pay an extra fee for each kilometre driven.
How much they will need to pay depends on their market segment, of which there will be three: rail freight, domestic passenger traffic and international passenger traffic. It also depends on how money much the infrastructure manager wants to raise annually, with a maximum of 100 million euros.
Fees for these market segments will be based on their calculated price elasticity. If a market segment is relatively insensitive to price changes, it will face higher fees. If it is relatively susceptible to price changes, then the charges will be lower. According to the ACM and ProRail, rail freight has a price elasticity that is slightly lower than passenger traffic. Dutch rail freight is also less sensitive to price changes than its German counterpart, they say.
RailGood and DB Cargo versus ACM and ProRail
The document released by ACM reveals a back-and-forth between ACM and ProRail on one side, and rail freight organisation RailGood and DB Cargo Netherlands on the other side.
Among other things, RailGood criticises the price elasticity mechanism and the market segmentation as determined by ProRail. According to RailGood, the calculation of rail freight’s elasticity does not correspond to reality. In a LinkedIn post, it calls the claim that rail freight is less price elastic than passenger rail “bizarre”.
Likewise, DB Cargo Netherlands points to the reverse modal shift that it says occurs with each price increase. “For market experts, the conclusion that rail freight can take on an additional 770.000 to 7.770.000 euros is not relatable”, it says.
Doubts about theoretical models
RailGood says that “commercial companies in large parts of rail freight transport are structurally subject to significant price sensitivity. The reality in the commercial transport world is completely different from what Significance’s theoretical model calculations generate.” Significance is an independent market research agency specialised in transport. “Rail freight transport is, with the exception of a few niches, structurally very price elastic in practice”, RailGood adds.
RailGood then also disagrees with the inclusion of all rail freight into one market segment. Within the sector, there are large differences in price elasticity, the organisation says. It concludes that a further segmentation of rail freight, with different pricing, would have been more efficient for the sector’s well-being. It points to Germany, where such a system exists.
ProRail and ACM respond
ProRail, on the other hand, says that the price elasticity calculation method is the best one that it has at its disposal. It is widely used in the government, and other European methods are not as well-adapted to the Dutch situation, the infrastructure manager says.
Moreover, ProRail and ACM say that fee pricing can be differentiated for trains’ weight classes, but that this does not correspond to an earlier determined division of the rail freight segment into 12 sub-categories. ProRail says that implementing such a division would take much time, energy and resources. The ACM concurs, saying that ProRail should not have to take on so many extra costs for a further segmentation of the rail freight category.