1900

1980

Up until 1 January 1980, the state pilots fell under the jurisdiction of the Ministry of Defence. As part of the pursuit towards unity of maritime administration, the Directorate General for Shipping and Maritime Affairs was established later in 1980 as a component of the Ministry of Transport and Communications.

This consisted of the former state pilotage services, the Directorate General for Shipping and several other components of the Department of Public Works.

1982

A stipulation was laid down in the 1982 Lubbers cabinet coalition agreement that the cabinet considered the fundamental testing of numerous public services and statutory regulations to be necessary. In addition to other labour instruments, such as deregulation, privatisation formed an essential part of this policy, which was oriented towards cut-backs, improved administrative control and stronger market forces.

As part of this policy, the Minister of Finance clarified several more general aspects of privatisation in 1983, in addition to en initial selection proposal.

Privatisation was defined as being all forms of deregulation whereby tasks performed by the government were either subjected to a less direct form of governmental influence or completely withdrawn from governmental influence.

An important reason for privatisation of the pilotage services was the desire to amalgamate the State pilotage services with those of the Rotterdam municipality. The General Auditor’s Office argued the case in the early seventies, which then resulted in an initiative legislative proposal by the SGP MP Van Rossum to abolish the statutory municipal jurisdiction for independent establishment of a harbour pilotage service.

Following the conclusion of the activities of the state commission established after the Van Rossum initiative legislative proposal, the municipality of Rotterdam remained opposed to integration under a state banner. The state commission had issued the advice to procure operational collaboration / integration between both pilotage services.

Planning discussions on the implementation of this advice took piece when the first Lubbers cabinet took office. The most notable argument in favour of the advocated merger was that Minister Smit-Kroes wanted to improve the service level of the pilotage services: the official organisation proved highly unsuitable for organisation of a real-time company such as the pilotage services, which additionally has to easily anticipate the frequently changing pilotage demand.

The convergence of these aspects instigated a cabinet decision to look into privatisation, which also fitted in with the coalition agreement. The fact that seagoing vessels were piloted by private companies in most countries also played a role in this respect. In addition, further consideration was given to the notion that a privatised service would be in keeping with the manner in which pilots have to be able to perform their job.

In July 1983, the Minister of Transport and Communications was authorised to conduct consultation about the government resolution with regard to privatisation of the pilotage services and integration of the state and municipal pilotage services in Rijnmond.

1984

In preparation of deregulation, the state and harbour pilots were united in 1984 by way of the Federatie Verenigde Nederlandse Loodsengilde (FVNL or, in English, Federation of United Dutch Pilotage Services). In December 1984, the minister created the Co-ordinate Board, which consisted of three members: a consultant co-ordinator (who served to advise the minister), Mr R.F. van Heusden, the director general for Shipping and Maritime Affairs, Mr J. van Tiel, and the director of the Gemeentelijk Havenbedrijf Rotterdam (Rotterdam Municipal Harbour Company), Mr H. Molenaar, Five project parties were formed in which the pilots also participated. The most important parties were the legal (affairs) party and the financial party.

The focal points of the consultation between the pilots and the Co-ordinate Board were as follows:

• The pilotage obligation (the obligation to use pilotage services laid down in the Shipping Traffic Act)
• The relationship between the pilotage services and the traffic department, in particular the exclusive advisory powers of the pilot, also applicable in the case of onshore advising by means of radar huts (Remote-Control Piloting)
• The new Scheldt regulation, in which the pilotage obligation and division of piloted shipping between Belgium and the Netherlands was regulated in terms of the ‘Scheldevaarders (ships that sail over the Scheldt to a Belgian harbour)
• The co-deregulation of and the authority over the supporting organisation, such as crewing of pilot boats, delivery services and office employees
• The sum to be paid by the pilots for the take-over of materials (pilot boats, tenders and buildings)
• The fraction of the pilotage charges for the benefit of the pilots and the supporting service
• Lastly, the amount to be transferred to the Pilot Pension Fund on the basis of rights built up under the State Employees Pension Scheme.

The pilotage obligation, Scheldt regulation and relationship between the pilotage service and traffic department are subjects that could, on closer inspection, have been dealt with separately (from the deregulation), but they were problem issues for the pilots during consultation.

The advice from the Co-ordination Board, which was based on discussions in project parties and consultation with the Pilots Organisation (FVNL), was ready in December 1985. It differed only to a limited extent from the points of view expressed by the pilots prior to consultation. The advice formed the basis for the consultation between the minister and the pilots, which commenced in January of 1986.

This consultation was followed by a new period of detailed consultation between the pilots and the Ministry, under the supervision of the consultant / co-ordinator and followed by discussions between the minister and the pilots in October 1987. This was the point of no return. The consultation on the subject of numerous development aspects continued up until the date of privatisation.

1987

In October 1987, the bill, which would have to form the legal basis for a deregulated pilots’ organisation (the Dutch Pilots’ Act), was submitted to the Lower House and ratified soon thereafter. The Upper House accepted the Dutch Pilots’ Act and accompanying Shipping Traffic Act in July 1988.

Both acts were published on 7 July 1988 and deregulation became reality on 1 September 1988.

Eventually, the decision was taken to opt for the appellation ‘deregulation’, as only the executive tasks were privatised; assessment of the policy with regard to pilotage obligation and tariff of pilotage charges remained the direct responsibility of the Minister of Transport and Communications.

1988

On 1 September 1988, the near 800 state and harbour pilots became ‘registered pilot’ and as such independent (free) professional practitioners and fiscal operators. 670 people were transferred from the government to the general and technical services company Loodswezen B.V. (Dutch Pilotage Organisation).

The materials, mainly vessels (22), were taken over for a sum of NLG 65 million. The National Civil Pension Fund transferred the value of the rights that had been built up to the newly-formed pension funds.

For the river Scheldt area, deregulation meant the following in terms of figures: 244 registered pilots, 181 employees in the supporting services, two large pilot vessels (the Spica and the Fomalhaut) and two roadstead boats (the Bruinvis and the Walvis).

Furthermore, lease agreements were concluded for the waiting areas and office areas in Antwerp and Terneuzen. The pilotage service had already leased space on the Spuistraat in Flushing.

The building situated on the Boulevard de Ruyter was purchased by the Dutch Pilots’ Association. Nowadays, the building on the Boulevard is shared property; the hall is owned by the Dutch Pilots’ Association since reconstruction took place subsequent to the fire in February 1992, with the remaining storeys being used as office space under the ownership of the pilotage service.

The current pilotage service is the common denominator under which various organisations operate, ensuring that the registered pilots are able to perform their piloting duties. The Dutch Pilots’ Act lays the legal foundations for this.

The registered pilots are active as independent professional practitioners. They acquire the capacity of registered pilots by way of enrolment in the pilots’ register once they have complied with the legal requirements in terms of education and skills.

1989

The following words were inciuded in the conciuding remarks of the General Auditor’s Office report on the deregulation of pilotage services, dated 22 August 1989:

The General Auditors Office is of the opinion that the deregulation of the pilotage service lacked well structured decision-making and negotiation processes. The resuits of the negotiations consequently turned out to be more detrimental to the State than was necessary’. Additionally, the General Auditor’s Office remarked that deregulation turned out to be NLG 54 million more expensive for the government than had been anticipated.

This stinging conclusion was one of the reasons for then-minister Smit-Kroes to establish a Commissie Verzelfstandiging Loodsdienst (CVL or, in English, Committee on Deregulation of Pilotage Services), which again had to closely examine the costs of the independent pilotage services. The investigation was executed by an external auditing agency (Coopers & Lybrand).

The General Auditor’s Office was shown to have compared the governmental budgetary expenditure in the last full calendar year prior to deregulation, in 1987, with the business costs of the independent pilotage services.

It is self-evident that government investment in the pilotage services was reduced to practically nothing subsequent to the basic resolution in 1983 to make pilots and pilotage services independent. This is not insignificant for an organisation with an extensive infrastructure, which comprised more than twenty of its own vessels with a new construction value of approx. NLG 200 million. Furthermore, it should be stated that the government includes investments in the budget only once in the relevant budget year and that nothing of this investment is subsequently retrieved, while business investments are written off as costs for the assumed economic life span of the object in question. For the purpose of illustration: a pilot vessel required an investment of approx. NLG 18 million at the time. The General Auditor’s Office was also shown to have made no or at least insufficient allowances for costs that the government did not charge the pilotage service, such as insurance, financing and premises’ costs, wharf expenses, medical care, etc. The external investigators and the CVL concluded that the General Auditor’s Office had miscalculated at least NLG 41 million The CVL has observed a number of aspects, including the fact that the General Auditor’s Office’s conclusion that the privatisation had cost more is incorrect, since two differing variables were compared.

An amount of NLG 13 million could not be retraced as the governmental administration at that time - and still to this day - did not indicate how much the pilotage services had cost internally. That very same General Auditor’s Office did give evidence of the government administration deficiencies each year in its reports. Aside from the fact that the General Auditor’s Office attempted to compare apples with oranges, its investigation was bad for the image of the deregulation of pilotage services

Moreover, it should also be noted that on the basis of the previously outlined ‘restricted’ budgetary assessment, the government claimed to be left with approx. NLG 40 million after the costs for pilotage services had been met. This seemed correct in a budgetary context, yet it is incorrect in business-economical terms, At some point, the surplus was attributed to the previously uncalculated costs of the harbour radar services and resulted in the proposition that this amount had to be taken from the pilotage funds and paid to the government subsequent to deregulation; it was meanwhile included as income in the (multiyear) Ministry of Transport and Communications budget. Prior to 1988, the government was apparently left with money obtained by piloting and wished to continue retaining these finances subsequent to deregulation, with the purpose of also funding the harbour radar from the pilotage charges. The surplus of the estimated NLG 40 million was not reached, but did increase from approx. NLG 10 million in 1990 to almost NLG 25 million in 1994. The intended amount was not left owing the outlined developments. The Commissie Verzelfstandiging Loodsdienst therefore advised not to link the costs of harbour radar services and their traffic information to the shipping industry to the pilotage charges, but to charge a separate tariff for these services. With the recent amendment to shipping traffic legislation, which came into force on 1 October 1995, a simultaneous 6.4% reduction in pilotage charges is anticipated with introduction of a separate tariff for the services of the harbour radar stations (the ‘VBS tariff’). The basis for the pilotage charges is the gauge of the seagoing vessel: a small ship with low draught pays approx. NLG 1,000 for a pilot to guide it from the sea to Sloehaven near Flushing, while a large ship with high draught pays around NLG 10,000. The basis for the VI3S tariff is the length of the seagoing vessel. The VBS tariff is collected by customs and amounts to NLG 250 to NLG 2,800 per call.

A considerable relaxing of the pilotage obligation is anticipated with an amendment of the shipping traffic legislation. Seagoing vessels that are exempt from the pilotage obligation profit from this, such as small seagoing vessels without a dangerous bad and seagoing vessels with a certificate holder on board (with a caller frequency of at least 18 times a year, the captain may obtain a certificate of exemption for certain routes after taking an exam - except if he is transporting dangerous substances in bulk - after which he may sail that route without a pilot).

1995

The words deregulation and privatisation are confusing and, what is more, differing definitions are often given. Generally, it can be said that privatisation is a more radical form of deregulation, with the most important characteristic being the discipline of the market. With regard to pilotage services, a form of deregulation was around in 1988: a settlement system with the government was still in place, part of the pilotage charges was needed for government tasks concerning the harbour radar and traffic department and the Minister set the level of the pilotage charges.

On 1 October 1995, three important changes were made to move towards privatisation as a result of the report from the Commissie Verzelfstandiging Loodsdienst, which were based on an agreement, the contents of which are incorporated in the law (Dutch Pilots’ Act and Shipping Traffic Act). First of all, there no longer is a settlement system (except for the portion of the pilotage charges for shipping on the Scheldt, which is determined by the Belgian and Dutch governments), secondly, the level of the pilotage dues is determined in consultation between the pilotage services and the representatives of the harbours, ship owners and ship brokers (the ‘pilotage charges consultation group’ (the outcome of the consultation must, in view of the national importance, be ratified by the Minister of Transport and Communications), and finally, market forces are reinforced by expanding the option for exemption of the pilotage charges and the extremely extensive options for certificate holders. Given this change, the Dutch Pilotage Organisation was truly privatised in 1991.

Published before in the magazine of the ‘Koninklijk Zeeuwsch Genootschap der Wetenschappen’.

Author A.G. Nauta