IN AN ATTEMPT to break the impasse over charges to use the Betuwe Route after it opens in 2007 or 2008 (p605), a group comprising ProRail, TowRail and the port authorities of Rotterdam and Amsterdam announced a plan on September 19 that would see a company established to maintain and operate the freight line.

Details were presented three days earlier to Transport Minister Karla Peijs who had asked ProRail and the Port of Rotterdam to come up with a firm proposal after they floated the idea of independent management in 2004. The group now estimates the initial operating loss before the line breaks even at €35m, around half the previous figure.

Assuming that the route opened in January 2007, the promoters believe the loss in that year would be €14m, tapering down to €4m in 2010. In 2011 operations would break even, and then move into profit. Apparently they were not aware that the main suppliers of ETCS are now saying they cannot equip the locos before March 2008.

The lower predictions arise from financial and other expertise from TowRail, higher traffic predicted by the ports, the involvement of Amsterdam port, and lower maintenance costs forecast by ProRail.

The essence of the proposal is that the government will pay the €35m loss as a fixed amount, and thereafter the group will meet further losses or keep whatever profit they can earn. Working capital totalling €15m will be contributed by ProRail (k5m), Rotterdam (k5m), TowRail (k4m) and Amsterdam (k1m).

The deal is designed to divide risks according to the degree of control exercised by the two parties to the deal. The group takes financial risks posed by inadequate cost estimates, disappointing market forecasts and poor management. The government must bear risks posed by lack of capacity on the German network, failure of technical systems (presumably including ETCS), and pricing policy for freight using the existing network.

The group is adamant that the charge for using the new line cannot be significantly different from existing lines. Operators of container trains can expect to pay about €2 per train-km in 2007, rising to €3 by 2011. Finally, the promoters have estimated the cost to the government of simply maintaining the Betuwe Route with no traffic at €15m/year, which means that by 2011 taxpayers would have paid out a further €75m for no social benefit whatsoever.