February 1, 2011 / 6:23 PM / 9 years ago

Dutch high-speed rail faces financial woes -govt

AMSTERDAM, Feb 1 (Reuters) - The Dutch high-speed train operator could face eventual bankruptcy unless steps are taken to boost its viability, after little more than a year of full services, infrastructure minister Melanie Schultz van Haegen said.

Parliament debated the fate of the services on Tuesday after Schultz van Haegen wrote in a letter to members that train operator High Speed Alliance (HSA) faced a serious deficit.

A high-speed rail line linking Brussels to Amsterdam opened to great fanfare in December 2009 but the service has struggled to attract enough domestic passengers, travelling to and from the south of the Netherlands, to pay for its access charges.

HSA is 95 percent owned by state-owned railway NS and airline KLM (AIRF.PA) has a 5 percent stake.

“Given the situation, action on my part is necessary,” Schultz van Haegen wrote, adding that operational profits at HSA are substantially lower that those envisaged due to fewer domestic passengers than originally projected.

“There is currently no danger of immediate bankruptcy. To ensure continuity of service for the travellers, the HSA will operate the trains at the expense of the state should the company risk bankruptcy. So that I have time to find a solution, I will approach this process carefully,” she added.

An HSA spokeswoman said discussions were continuing with the Dutch government on finding a solution.

Governments across Europe have seized on high-speed rail as a sustainable, environmentally friendly alternative to air and road travel, which can also help to stimulate economic activity through capital spending.

But luring passengers is key. Some of HSA’s trains travel with just 15 percent of their seats occupied, Dutch broadcaster NOS reported on Monday. HSA has slashed from February the premium that domestic passengers have to pay to travel on high-speed trains by more than half.

High-speed train operators have to pay hefty access charges across Europe, often because they have to allow for cross-border travel where different types of technology are used on the tracks, pushing up costs.

Europe’s high-speed rail network is dominated by Rail Team, a marketing coalition of national rail operators, posing a challenge as an established incumbent to private companies aspiring to enter the market. (editing by David Stamp)

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