Belgian Railways must revamp its organizational structure

According to a study by Roland Berger Strategy Consultants the current organizational structure of Belgian Railways is unsustainable. For five weeks Roland Berger analysed the future of Belgian railways. The consulting firm concluded that NMBS and NMBS Holding have to merge, and only Infrabel has a future as an independent firm. A return to one entity would be even better and more efficient, but European legislation does not allow it. 

Assumptions

The consultants based their study on three central assumptions. First, under European law the infrastructure and exploitation of railways have to be separated from each other. In January 2005, the Belgian railway organization was therefore split into three entities. Second, the federal government in Brussels wants a simpler, more efficient and cheaper organization than the current tripartite. Thirdly, travellers require a higher punctuality of trains.

Important Bottlenecks

The report identifies five major bottlenecks in the current railway organization:

• The relationships between the three CEO’s is bad.
• Hierarchy between the CEO's is missing.
• Tasks, activities and responsibilities are not clearly defined.
• There are too many branches and subsidiary companies.
• The cash flows between the entities are not transparent.

Results

Roland Berger concludes that a return to a unitary railway organization, such as SNCB was before January 2005, actually is the best solution. However, European competition rules make that impossible. According to the consulting firm reorganization into two entities instead of three, was the optimal strategy. The consultants say that the current situation with three independent companies, which still have a certain order of hierarchy, is unsustainable.

The report also indicates that the distribution of the liabilities of the entities will be a difficult decision. There will be negotiated about how and by whom exactly the current debt arose, and how it can be refunded.

Elections 2014

The research of Roland Berger is going to be used by Minister Paul Magnette. Between 15 and 30 May he will explain the different options for the government. Because the railway reform has to be completed before the 2014 elections, the government will have to take a decision quickly.