Finnish railway market
In addition to market-based traffic, unprofitable passenger train traffic is maintained in Finland by means of contract traffic financed by the state and cities.
Market-based traffic:
More than 80% of long-distance traffic consists of VR's train traffic funded by ticket revenues, in other words, market-based train traffic. Freight traffic is entirely market-based, and there are other freight operators in addition to VR.
Contract traffic:
The Ministry of Transport and Communications annually purchases passenger train services (night train and railbus traffic as well as individual IC/Pendolino services) for routes that are commercially unprofitable due to the low number of passengers. The Ministry decides on the service level for contract traffic.
HSL commuter traffic:
HSL has tendered commuter train services in the capital region and VR has won this tender. HSL procures the transport services and decides on their service level, ticket prices and sales.
Competition in rail transport
The aim of the current government programme is to increase competition in rail transport and make it easier for operators to enter the market.
In Finland, the rail traffic market for freight traffic was opened up to competition in 2007. The beginning of 2021 saw the end of our monopoly in passenger service, and since then, all willing operators have had free access to the railway network and the opportunity to enter the Finnish market based on the model of free competition in accordance with EU regulations.
VR takes a positive stand on competition and we are committed to promoting the objective of the government programme to increase competition. We want to be involved in developing a customer-oriented, sustainable and competitive railway market as a combination of free competition and regional contract traffic tenders.
The fastest way to promote competition is to increase regional contract traffic, enable cities and regions to organise and tender regional contract traffic and establish a public contract traffic rolling stock company for publicly funded train traffic. VR supports assigning the responsibility for organising regional contract traffic to the regions and establishing a rolling stock company for contract traffic.
Long-distance train traffic and freight traffic must be allowed to develop on market terms, which will allow competition to develop freely, in accordance with the free competition model based on EU regulations. That means that customers will have genuine freedom of choice and no public funding will be needed.
There is also competition between different modes of transport
We operate in the open markets of railway and road logistics, train and bus passenger services and maintenance. There is also competition between different modes of transport; for example, train traffic is constantly competing with bus traffic and passenger car traffic.
Public rolling stock company
The government programme includes an entry on the establishment of a public rolling stock company for publicly funded contract traffic. VR supports this goal.
There are public rolling stock companies for contract traffic in Sweden, for example, and they have proven to be well suited for publicly funded contract traffic. The rolling stock used in tendered contract traffic would be transferred to the public rolling stock company.
Regional transport and its growth
Competition in passenger train transport will be increased by enabling municipalities, joint municipal authorities and regions to organise contract traffic for passengers in commuter zones.
Several cities have expressed interest in organising commuter traffic, and some of the existing, successful examples include the additional M commuter train services funded by Tampere, Nokia, Lempäälä and Akaa, which have more than doubled in scope since the start of the service.
Contract traffic complements market-based long-distance traffic. Tendering can help achieve efficiency and quality, and the starting point is that all publicly subsidised traffic must be put out to tender.
