Wednesday, June 06, 2012

Merger notifications

It is always interesting to see how railway reform, whatever its effects on overall efficiency, has the unerring ability create work for lawyers. The most recent reminder is the combination of reform and competition law. Specifically: merger review.

The history of this mess is as follows: When the Dutch railways were unbundled in 1995, the task of informing passengers about delays was given to both the transport companies (particularly: NS) and the infrastructure company (ProRail). From an engineering point of view, that makes sense, because they both do things that cause delays and they both do things that make delays go away. Unfortunately, economic logic rarely pays heed to engineering logic, and economic logic dictates that such a division of labour results in both parties constantly blaming each other for everything and anything that goes wrong. Which is exactly what happened. Plenty of blaming, not a lot of improvement. Not even when the Minister started handing out fines.

(Or, in the category of lies, damned lies and statistics, the percentage of passengers who rate the quality of information in case of delay with a 7/10 or higher went up from 33% in 2001 to 54% in 2011, which, I guess, technically qualifies as an improvement. Unfortunately, the government-set target for 2011 was 56%, which will increase to 58% by 2015.)

So it was decided that economic logic should prevail: Let the transport people inform passengers, and whatever information they need from ProRail they can get by yelling at them. This year's € 300.000 fine was the last time ProRail got in trouble with the government over passenger information.

Now back to the question of employment for lawyers: In order to give effect to the government's decision, NS has to "acquire" the department of ProRail that is responsible for information to passengers. Never mind that this department probably consists of two 0.4 fte staffers and a desktop computer, and never mind that both are 100% owned by the Dutch state. And because this acquisition is going to take place in a market full of competition problems, where the selling party has a 100% market share and the acquiring party a market share of about 90%, they have to jump through all the hoops set up by the Competition Act (Mededingingswet), including the official notification of an intended (!) merger, whereby interested parties are invited to comment on the intended merger, whereby a company of which the State is the only shareholder intends to acquire a department of another company of which the State is the only shareholder. (That's pretty much what it says in paragraph 1 of the notification.) If anyone wants to comment, they'd better hurry, because the term is 7 days after the date of posting, i.e. until tomorrow.

So yes, in these dire economic times, it is good to be a lawyer. Too bad those b**rds in Groningen gave me an LL.M. title without effet civile. But that's a conversation for another time...

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