The document discusses plans to open passenger rail transport in Finland to competition by terminating VR's exclusive rights. It proposes:
1) Dividing the rail network into sections and service packages for competitive tendering, starting with local services in Southern Finland in the early 2020s.
2) Establishing state-owned companies separate from VR for rolling stock, maintenance, and real estate to ensure a level playing field.
3) Involving counties in regional and local rail services to supplement national networks, following Sweden's model of growth in these areas.
The overall goal is to increase transport options, efficiency and cost reductions through competition while maintaining service levels.
2. 2
Aim to develop the entire transport system
– Mobility as a Service
Information Information
Road
transport
Rail
transport
Aviation
Maritime
transport
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. 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. 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. 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. 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. 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. 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
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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. 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. 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. 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. 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.
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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
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Photo:Rodeo,JuhaTuomi
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
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