This month, Danish state-owned passenger rail operator Danske Statsbaner (‘DSB’) reported increased “profits” and ridership for the fiscal year 2023.

However, DSB’s “profits” are in fact a fake profit margin that is ‘earned’ from a countrywide Public Service Obligation (‘PSO’) contract that was directly awarded by the Danish government without the benefits of a competitive tender (which would have achieved a lower cost for taxpayers and higher quality for passengers).

Instead, there is a much better option: rail market opening in Denmark.

In essence, DSB’s profits do not come from being a competitive business; instead, they are baked into an exclusive deal negotiated with its owner, the government, and subsidised by the taxpayer – at an astonishing “3.25 billion Danish Kroner per year“.

But is there really a need for a huge subsidised PSO contract – for all of Denmark? On the contrary: there are multiple indications that many routes could already be commercially viable; for example:

▶ Demand is strong with up to “49% more travellers” on specific routes compared to 2019 – the last year before Covid – and the growing willingness by Danes to use rail travel

▶ There are independent operators who have applied to offer commercial services within Denmark – without any taxpayer subsidy

ALLRAIL’s Policy Officer Salim Benkirane says: “in reality, the only profit-earning that DSB knows is lobbying its owner for exclusive taxpayer funded contracts. Instead, it is an open market that would reduce ticket prices – without wasting billions of Danish Kroner in taxpayer money.

The Danish government should spend that money on other much more worthy things – such as improving the rail infrastructure – and not on one single rail operator.”