The Neuchâtel Council of State has endorsed TransN. The cantonal executive announced on Monday that the recapitalization of the public transport company is contingent upon a financial restructuring of the organization. This decision follows several months of “intensified scrutiny” from the government, during which it sought to understand the substantial increase in costs and the necessity for cantonal subsidies for TransN.
Impact on budgets
According to the Council of State, this rising demand “affects the cantonal budget, as well as that of the municipalities.” They also caution about the risks associated with this situation in terms of the co-financing conditions for regional transport by the Confederation. The Canton has noted that the cost increases at TransN are “significantly higher than those of other transport companies during the same period.” The authorities point to external factors, such as inflation, the Covid crisis, and energy costs, to explain these additional needs. Internal factors are also highlighted, though no specific examples have been provided. Finally, the Council of State emphasizes that the volume of services provided by TransN has remained relatively stable in recent years.
Results expected in spring 2025
Based on this assessment, the Canton, in partnership with the Board of Directors of TransN, has entered a new phase of external auditing. The objective is to identify “the structural causes of these cost increases” to implement necessary optimization measures. Operational and strategic frameworks will soon be set up, along with synergies with other public transport companies. The findings will be revealed in spring 2025, and subsequently, a report on the restructuring and recapitalization of TransN will be submitted to the Grand Council during the summer. The Council of State reiterates that the restructuring of the company is a prerequisite for its recapitalization.
Capital that needs to be tripled
Currently, TransN has a share capital of slightly over 15 million francs (15,528,030). In an interview with RTN, Patrick Vuilleumier, the director of the public transport company, stated in September that recapitalization was “essential.” He also emphasized that it is necessary to triple the existing capital “to address future challenges, including decarbonization.” /comm-dpi
The Neuchâtel Council of State supports TransN. The cantonal executive announced Monday that the recapitalization of the public transport company was conditional on a financial restructuring of the latter. This decision comes after long months of “reinforced attention” from the government during which it sought to understand the significant increase in costs and the need for cantonal subsidies from TransN.
Impact on Budgets
The Council of State emphasizes that the increasing demand for subsidies “impacts the cantonal budget, but also that of the municipalities.” Furthermore, they acknowledge the risks associated with this situation regarding the conditions of co-financing regional traffic by the Confederation. The Canton has also noted that TransN’s cost increases are “substantially higher than those of other transport companies during the same period.”
Factors contributing to these additional needs include:
- Inflation rates
- The Covid crisis
- Rising energy costs
While external factors are substantial, internal factors have also been cited, although specific examples were not provided. It is important to note that the volume of services provided by TransN has remained relatively stable over the years.
Results Expected in Spring 2025
In light of the observed trends, the Canton, in partnership with the Board of Directors of TransN, is entering a new phase of external audit aimed at identifying “the structural causes of these cost increases.” This will enable necessary optimization measures to be implemented.
Key steps in this process include:
- Operational and strategic reviews
- Establishing synergies with other public transport companies
The anticipated results of this audit will be disclosed in spring 2025, following which a report on the sanitation and recapitalization of TransN will be presented to the Grand Council in the summer. The Council of State reiterates that restructuring is a prerequisite for recapitalization.
A Capital That Must Be Tripled
Currently, TransN has a share capital slightly exceeding 15 million francs (15,528,030 CHF). In a recent interview with RTN, TransN director Patrick Vuilleumier stated that recapitalization is “necessary” for the company. He further noted that tripling the present capital is crucial “to face future challenges, including decarbonization.”
The Importance of Recapitalization
Recapitalization is essential for several reasons:
- Financial Strength: Increased capital will provide a stronger financial foundation to support expansion and upgrades.
- Facilitating Innovations: Additional resources will enable investment in modern technologies, making TransN more efficient.
- Responding to Environmental Challenges: Tripling the capital will help fund decarbonization initiatives to combat climate change.
Case Studies: Successful Transport Systems After Recapitalization
Successful examples from other regions can provide valuable insights into the potential benefits of TransN’s upcoming changes. Here are some noteworthy instances:
| Transport System | Location | Capital Investment | Outcome |
|---|---|---|---|
| Metro Vancouver | Canada | 1.5 billion CAD | Improved ridership by 10% within two years. |
| TfL | London | 3 billion GBP | Increased overall efficiency and expansion of services. |
| California High-Speed Rail | USA | 68 billion USD | Projected to reduce travel time and decrease vehicle emissions. |
Practical Tips for Managing Transport Companies in Distress
For transport companies facing financial challenges similar to those of TransN, here are a few practical tips:
- Conduct Regular Audits: Regular financial and operational audits help identify inefficiencies and areas for cost reduction.
- Develop Strategic Partnerships: Collaborating with other transport providers can create synergies and reduce costs.
- Invest in Technology: Utilizing modern technology can lead to operational efficiencies and service improvements.
- Engage with Stakeholders: Regular communication with stakeholders can ensure support for financial initiatives and transparency in decision-making.
The Path Forward for TransN
As TransN embarks on this pivotal journey of recapitalization and restructuring, the potential benefits are vast. By addressing the root causes of increased costs and investing in sustainable development, TransN can not only enhance its services but also secure its viability for future challenges. This initiative will not only serve the residents of Neuchâtel but also set a precedent for public transport systems across the region.
