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Opening passenger rail transport to competition in Finland, Minister Anne Berner, Press conference 9 August 2017

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Opening passenger rail transport to competition in Finland, Minister of Transport and Communications Anne Berner, Press conference 9 August 2017

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Opening passenger rail transport to competition in Finland, Minister Anne Berner, Press conference 9 August 2017

  1. 1. Opening passenger rail transport to competition Press conference on 9 August 2017
  2. 2. 2 Aim to develop the entire transport system – Mobility as a Service Information Information Road transport Rail transport Aviation Maritime transport
  3. 3. Division of passenger transport in Finland Passanger car 81% Taxi 1 % Moped/bicycle/ motorbike 1 % Train 5 % Metro/Tram 1 % Bus 9 % Ship 0 % Aeroplane 1 % 3
  4. 4. Current passenger rail transport arrangements in Finland • Competent authorities – the Ministry of Transport and Communications and HSL – have concluded agreements with VR which guarantee VR the following exclusive rights: • Agreement between HSL and VR guarantee exclusive right for VR until June 2021 (commuter rail services in the Helsinki region) • Agreement between the Ministry of Transport and Communications and VR would guarantee VR an exclusive right to provide all other passenger transport services in the current rail network until the end of 2024 (all other areas in Finland) 4 Photo: Rodeo/Juha Tuomi
  5. 5. Passenger transport in the rail network • Commuter rail services by Helsinki Region Transport (HSL): 63 million journeys (1.2 billion passenger-kilometres) • Other passenger rail transport: 12 million journeys (3 billion passenger-kilometres) 5 Lähde: Liikennevirasto, Suomen rautatietilasto 2015
  6. 6. Contractual rail transport services 2017 Purchased services • state support: EUR 27.4 million a year Rail transport services under public service obligation • no state support, obligation to provide services in return to the exclusive right to provide rail transport services (max. EUR 20 million a year). • green: overnight train service 6 Lähde: VR
  7. 7. State of play within the EU • Passenger rail transport services have been opened to competition in almost all EU Member States • Finland, Ireland and Luxembourg are the only countries with one single service provider • Many countries have opened local and regional passenger services to competition – they provide feeder traffic to national centres • Sweden and the UK have the most extensive experience of the competitive tendering of passenger rail transport • Currently, both Sweden and the UK have some 20 active operators providing passenger rail services • Norway is opening its rail passenger transport to competition • EU legislation requires that rail transport be opened to competition • Current exclusive right arrangements will no longer be possible - market entry must be possible for other operators as well • EU’s fourth railway package was adopted in Dec./2016 7
  8. 8. A strong role for the counties •Counties, big cities and urban regions could also provide regional and local rail transport services •Transport organised by counties could supplement the national rail transport services •This would promote regional commuter connections •A similar kind of arrangement is in place in Sweden • In Sweden, the strongest growth has been experienced in the supply and demand of regional and local rail services •Counties will be also involved in the national tendering process right from the start 8
  9. 9. Objectives • Increase and diversify the supply of passenger and freight transport services • Promote fare competition and reduce transport costs in freight transport • Increase the attractiveness of rail transport vis-à-vis private motoring – reduce emissions • Increase the share of rail transport within passenger transport • Enhance the mobility of workers by extending commuting areas • Improve the efficiency of service provision – more transport services in return for public support, transparent use of taxpayers’ money • Promote employment in the railway sector • Create favourable conditions for economic growth lvm.fi 9
  10. 10. What will happen with the opening to competition? • The exclusive right of VR will be terminated and barriers to market entry dismantled to enable new operators to start passenger rail transport • Passenger rail transport will be opened to competition in regions within the mandate of the Ministry of Transport and Communications; Helsinki Region Transport (HSL) has earlier announced that it will put its local rail services out to tender • In the Finnish rail sector, there are no legislative barriers to market entry • Current contractual agreements prohibit the market entry of other rail passenger service operators • Point of departure: the level of passenger rail transport services will be safeguarded and all rail operators will have equal opportunities to provide such services 10Photo: Rodeo/Juha Tuomi
  11. 11. Competitive tendering of rail transport • A model based on concessions is considered best suited to the Finnish context • The rail network will be divided into sections and service packages; each with its own concession contracts • The concession contracts will include public service obligations • The call for tenders will be prepared on open and transparent criteria • Passenger rail transport services will be opened up to competition in stages • The opening to competition will start with local rail services in Southern Finland The objective is to have the tendering process completed and the services up and running in the early 2020s • All contracts concluded and the ensuing transport systems operational in 2026 • In the planning of the tendering model and related schedule, attention has been given to the ongoing competitive tendering of the HSL commuter services • Railway safety will be ensured in the new environment involving multiple operators • The exclusive right agreement between the Ministry of Transport and Communications and VR will be renegotiated 11
  12. 12. Local rail services in Southern Finland 12 • The opening to competition will start with local rail services in Southern Finland • Relates to contractual rail services purchased or obligated by the Ministry of Transport and Communications and operated with commuter trains • Regionally limited and the smallest transport package • Attention will be attached to HSL’s plans to put its commuter rail services out to tender regarding the period starting on 1 June 2021; the schedule of the competitive procurement processes is to be coordinated • The tendering process will ensure that cooperation with regard to ticketing will continue with HSL. • Attention will be attached to the procurement of new rolling stock – outdated stock will be replaced over the contract period
  13. 13. Creating a level playing field • The aim of the EU’s fourth railway package is an open and non-discriminatory market entry to national passenger services • Three wholly state-owned companies will be separated from VR to create a level playing field for all operators • a rolling stock company • a maintenance company • a real estate company • Staff will be transferred to the new state-owned companies so that they retain their current terms of employment • VR will continue as a wholly state-owned rail transport company • The arrangements are very much in line with the competitive tendering model adopted by HSL: municipalities in the Helsinki region have, for example, their own rolling stock company 13
  14. 14. Availability of rolling stock will be safeguarded • A new state-owned rolling stock company will be established • VR’s rolling stock will be transferred to the new company in stages as the competitive tendering proceeds • Rolling stock will be leased to operators under equal terms: counties will also be ensured access to rolling stock on the same terms • The rolling stock company will be responsible for the procurement of new passenger rolling stock • In Finland, the rail gauge is not the same as in most EU countries: • Second-hand rolling stock is not available from the other EU countries at a reasonable price • In future, Finland would have two rolling stock companies operating under the mandate of two competent authorities: one rolling stock company for rail transport in the greater Helsinki area (Pääkaupunkiseudun junakalusto Oy) and another rolling stock company for rail services in the other areas of the country • Rail transport freight rolling stock will also be transferred in stages – with due attention to VR’s transport agreements • All operators will have equal access to rail transport freight rolling stock – reduced freight transport costs will promote the organisation of the transport of bioeconomy products in Finland. lvm.fi 14
  15. 15. Separate companies for maintenance services and real estates • New, wholly state-owned companies will be established for maintenance and real estate services by separating the functions from VR • Countries, that have opened rolling stock maintenance services to competition, have seen the emergence of competitive commercial service provision • To ensure equal access to maintenance service, it is necessary to provide them through an independent company • The real estate company is to safeguard equal access to stations, terminals, depots and maintenance facilities • Counties may also use the services provided by the new companies on an equal footing lvm.fi 15 Photo:Rodeo,JuhaTuomi
  16. 16. Way forward • Ministry of Transport and Communications will appoint working groups to prepare the details of the competitive tendering • Representatives from the Government Ownership Steering Department of the Prime Minister's Office, Ministry of Finance, Finnish Transport Safety Agency, Finnish Transport Agency, VR Group Ltd, HSL and Finrail Oy will be invited to participate in the work. VR staff representatives will also take part in the preparation • An event for all stakeholders interested in the competitive tendering of the local rail services will be held on 4 Oct. 2017 • Organised in cooperation with the competitive tendering of the HSL commuter rail services • The schedule will be defined by HSL’s ongoing project • The aim is to have all contracts completed and services up and running in 2026 lvm.fi 16

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