29. Provisions

Provision for reorganisation costs

The purpose of the provision for reorganisation costs is to cover the costs arising from reorganisation measures. Most of the provision is needed for redundancy schemes, bridging payments and the redeployment of staff whose jobs have been eliminated as a result of reorganisations. Important starting points for determining the provisions for reorganisation costs at year-end 2021 and 2020 in the Netherlands are:

• the final collective bargaining offer submitted by NS to the parties to the collective labour agreement was accepted by the trade unions in February 2021;

• estimates with respect to advancement and outflow during the reorganisation.

Provision for soil remediation

The provision for soil remediation is for managing and remedying environmental damage. The provision is calculated using an average discount rate of 1.5% (2020: 1.5%).

Termination payments/net asset payments

The Dft determined termination payments in November 2020. Negotiations have taken place and arguments put forward in response to this determination. This led to a downward adjustment of the termination payment in May 2021 and a release of the provision of €362 million. 

Provision for the continued payment of unsocial hours during holidays

The Group has made a provision for the claimed unsocial hours allowance during holidays over the non-statutory holiday entitlement. The legal proceedings with respect to this topic have not yet been completed.

Provisions Abellio Germany and other provisions

As at 30 June 2021, the Group has estimated the expected outflow of funds arising from the termination and winding up of the activities in Germany. Provisions have been made for this. These estimates were updated as at 31 December as a result of the developments explained under ‘Deconsolidation’. At the end of 2021, the Group reassessed its position and adjusted the provisions accordingly. These provisions, with the exception of €10 million (which was charged to other operating expenses), were charged to its financing result and are included in provisions for Abellio Germany and other provisions at the end of 2021. These provisions are made for outflows of funds in respect of guarantees and settlement of other possible liabilities related to the insolvency proceedings. In addition, a provision has been made for expected legal and litigation costs. The provision for guarantees is part of the total guarantees issued as disclosed in note 31 to the financial statements.

The Group’s legal negotiating position is expected to be severely damaged if further information is provided on the nature and extent of the Abellio Germany provisions and other provisions made. The Group therefore makes use of the provisions of IAS 37.92 and confines itself to the above explanation.

The outcome of the solvency proceedings in Germany is inherently unpredictable and it is possible that cash flows or operating results in future years could be materially affected positively or negatively as a result of an outcome that is favourable or unfavourable to the Group compared to the current estimates made in these financial statements. 

‘Other provisions’ include provisions for losses arising from accidents and fire, uncertainties concerning settlements with carriers, provisions for maintenance in connection with lease contracts and provisions for staff-related matters.

Individual Compensation for Victims of WWII Transport

During the Second World War, NS operated trains on instructions from the occupying forces. NS has expressed its willingness to grant individual financial compensation on moral grounds to those most directly affected by its actions. The right to enter into legal proceedings on liability has been collectively waived. NS made a provision of €47 million in 2019 to account for the expected compensatory payments and costs of execution (recognised under other operating expenses). The entire provision has been settled at the end of 2021.