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Rail transport reform benefits citizens and the whole society

Rail transport reform benefits citizens and the whole society

Press release 03.10.2017 14.28 fi sv en

On 3 October, the Government replied to the interpellation concerning the current and future state of rail transport submitted by the opposition. Minister of Transport and Communications Anne Berner replied to the interpellation on behalf of the Government.

The aim of Prime Minister Juha Sipilä’s Government is to safeguard public transport services in all of Finland, to enable the creation of new services in different sectors and to increase the opportunities for people to choose the most suitable option for them. The opening of passenger rail transport to competition plays a significant role in achieving these goals in the transport sector. A decision has been made to open rail transport to competition because it has been estimated to lead to better services for train passengers and to benefit the whole society. Considerable savings can also be made in public procurement.

Rail transport is an integral part of Finland’s competitiveness and people’s everyday life in Finland. It is necessary to improve it also to achieve the ambitious emissions reduction targets. The Government seeks solutions that enable an increase in rail transport and make it a real option to an increasing number of people in Finland.

The reform of passenger rail transport is aimed at increasing and diversifying rail transport services. The aim of opening rail transport to competition is to be able to provide the services more efficiently than today and to provide services that meet the needs of different customer groups better. An increase in transport services and competition between providers and the different modes of transport will benefit passengers.

Based on experiences in other countries, the opening of rail transport to competition benefits passengers, in particular. In countries that have opened their passenger rail transport, the supply and demand for rail transport has increased significantly.

Competition encourages to improve services

Opening passenger rail transport to competition means that VR will no longer have exclusive rights to operate Finland’s railway network and other operators will also be able to enter the passenger rail transport market.

It is stated in the interpellation that the current rail transport services have not been cost-effective enough and have not met people’s needs in all respects. Passenger rail transport will therefore be opened to competition. Competition is an incentive for companies to improve their operation. When companies compete for passengers, the customer will have an opportunity to choose between different options.

The Government has decided that passenger rail transport will be opened to competition on the basis of concession contracts based on areas and service entities. This model ensures that there will be competition between the rail operators. The required service level and the incentives for improving the operation will be determined in more detail in the contracts. Concession contracts will not guarantee exclusive rights for operators to operate in the areas subject to competitive tendering. Several companies may operate in the same rail section.

The availability of rail transport services in all of Finland and to all passenger groups will be ensured also in the future. Through the chosen model of competitive tendering, it is possible to ensure that operators also take care of services that are less interesting from the commercial point of view.

The capacity of Finland’s railway network could be exploited more efficiently. The volume of traffic could be increased considerably on almost all of the railway network. Regional transport also has great potential. In future, counties and large cities could also develop regional transport to meet their own needs.

The role of VR Group and the position of its personnel will be secured

The opening of passenger rail transport to competition requires that equal and neutral conditions in terms of competition are created in the railway market so that all rail transport services are available to operators on equal terms.

To guarantee access to the market, three separate state-owned companies will be separated from VR Group: a rolling stock company, a maintenance company and a real estate company. All the three companies will be special assignment companies fully owned by the state. The rolling stock transferred to the rolling stock company will be leased to the potential operators under fair and equal conditions.

The role and competitiveness of VR Group as a state-owned rail operator will be safeguarded when rail transport is opened to competition. The company will be on the same line with other potential operators in future competitive tendering processes.

The employees will be transferred to the companies separated from VR as old employees. The expertise of VR’s personnel will be needed on Finland’s railways also in the future. Personnel organisations have therefore been engaged closely in the preparation of the reform.

Inquiries:

Olli-Pekka Rantala, Director-General, tel. +358 295 34 2585

Laura Eiro, Director of Unit, tel. +358 295 34 2668

Sanna Ruuskanen, Director of Unit, tel. +358 295 34 2077