Olli-Pekka Heinonen
Ministry of Transport and Communications Finland
P.O.Box 235
FIN-00131 Helsinki
Finland
Dear Mr. Heinonen,
During a conversation with Mr. Söderman and Mrs. Saarikivi they asked me if I would be so kind as to briefly inform you about the situation in the meteorological market in The Netherlands. Of course I am obliged to do so.
In The Netherlands the National Meteorological Institute (KNMI) started to do business over 100 years ago. The first business was the weather forecast being sold to newspapers. From that moment on business grew a little and some new products were developed.
Nothing really happened until 1986 when a private company Meteo Consult was founded.
All
of a sudden KNMI found itself in a competitive environment. For KNMI,
like nearly every other National Meteorological Institute in Europe in
1986, this was new. Up to this point the only competition were some
small enterprises and one or two companies, such as Ocean Routes,
active in world wide markets.
During the next ten years KNMI tried in
the face of growing competition as hard as it could to retain its
turnover. However, KNMI suffered due to the fact that they, being a
civil servant organisation, didn't have the marketing skills nor the
entrepreneurial drive to conquer the market.
The well known name of KNMI in the commercial world was not enough to
do good business. You need business plans, eager salesmen with company
cars, a view on the future and room to manoeuvre if necessary. If you
don't have all that and more, only one element is left to meet the
competition; price. And this is what happened. Prices were under
pressure and dropped, in some cases dramatically. This damaged not only
the competition, but also KNMI itself. On the other hand KNMI
calculated a positive result (profit).
More and more Meteo Consult wrote
letters to all possible organisations to discuss the unfair competition
in the Dutch market. These letters were always answered by saying Meteo
Consult was not right. Nevertheless a Government commission (The Cohen
Commission) ended a report in February 1997 by saying that in most
cases it is not good for business and civilians if a Government
organisation is active in the market. As a consequence of this report
the Dutch Government told KNMI to stop their commercial activities.
Because stopping would lead to a monopoly for Meteo Consult it was
decided that all commercial activities had to be transferred to a new
organisation; Holland Weather Services (HWS). HWS was founded on April
1 1999 and started based on the cost and income figures of their former
mother (KNMI).
At this stage it could be seen that business in a governmental organisation is something completely different to that in the private sector. For example, costs were in some cases 400% higher than prognoses due to the fact that within KNMI we used KNMI systems, data and infrastructure and were invoiced for a percentage of the total KNMI cost. Now we have to pay the whole price if we want something.
In the process that lead to the privatisation many problems had to be solved. The main problems were:
1. What will be called “private” and what will be called “public”.
2. Who owns the company
3. How do we make sure the employees (civil servants) enter HWS.
The first question was the hardest to answer. In the end the following line was followed:
Everything is private except:
A. If the safety of a large group of citizens is at stake.
B. There will be a forecast issued by KNMI for the next day and a brief forecast for four days
C. The delivery of raw meteorological data.
Ad A.
It was hard to draw a line as far as safety was concerned. Some examples:
In
the end it's been decided that KNMI will provide the aviation sector
all the information that they need as far as safety is concerned (due
to ICAO regulations). Value added services needed for economical
reasons by the aviation industry cannot be provided by KNMI but only by
commercial service providers.
Road Ice services are provided by the private sector. This service
requires a very detailed forecast with some very specific elements
(like road temperature and dew point temperature). KNMI on the other
hand is allowed to come in with a warning if approximately 10% of the
country will suffer from slippery roads.
A very basic problem for KNMI was that
they didn't have the media as a client anymore. For this reason it
would be very hard to reach the public if something dramatic was about
to happen according to KNMI.
For this a gentlemen's agreement was made that if certain criteria will
be exceeded, the private sector will add KNMI warnings to the products
that are used by media or individuals.
The ordinary forecast (as mentioned under B) is only seen on the KNMI website.
I certainly hope this simple letter will help you to some extent. I will be happy to answer any questions that might occur.
Yours sincerely
Weerbureau HWS
Jan Dekker
Managing director
Cc:
Pirkko Saarikivi
Managing Director
Foreca Ltd
Pursimiehenkatu 29-31 B
FIN-00150 Helsinki
Finland
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