Dutch state-owned railway firm NS may have to pay millions of euros to Britain’s trade ministry because of a disputed clause in a rail franchise agreement.

The Great Anglia railway franchise, a 60:40 joint venture between NS overseas operation Abellio and Japanese firm Mitsui & Co, is said to be facing a ‘hefty bill’ from Britain’s transport ministry Dft because the London economy is performing well.

The agreement for the East Anglia franchise includes a risk sharing measure known as the Central London Employment (CLE) mechanism. This was intended to provide protection for the operator and Britain’s department of trade (DfT) against revenue fluctuations if more people started using the service because the London economy was booming.

However, the way the CLE has been calculated means Abellio is facing a far higher bill than expected.

‘It is now widely accepted that CLE is a flawed mechanism that does not deliver on the intended aims,’ Abellio told DutchNews.nl in a statement. ‘We are therefore working with the DfT to develop and implement more effective risk sharing models.’

Contract

Abellio won the contract to run the Greater Anglia service in October 2016 after beating off stiff domestic competition. The franchise runs until 2025.

The NS booked higher transport revenues abroad than it did in the Netherlands in the first half of 2018. Abellio, which runs Scot Rail services as well as Greater Anglia, started a new concession in the West Midlands in December 2017 which pumped up British sales by 33% to €1.1bn in the first half of 2018.