21.08.2017

Three reasons to explore passenger rail market in Finland

The Helsinki region alone has an estimated 63 million rail passengers a year. Railway companies will be granted access to state-owned rolling stock. The opening of a new rail link between Finland and China to create additional business opportunities.

Anne Berner, the Finnish Minister of Transport and Communications, is confident that international railway companies will be interested in tendering for the right to provide passenger rail services in Finland.

 

Berner on 9 August announced that the domestic passenger rail market will be opened to competition by mid-2026. The de-regulation will take place in stages and begin with local rail services in Southern Finland and the commuter rail services organised by Helsinki Region Transport (HSL) in June, 2021.

 

“I’ve had enough preliminary discussions with international companies over these two years of preparation to be able to presume that there’ll be global interest especially in the package offered by HSL and the local rail services in Southern Finland,” she said in an interview with Kauppalehti on 11 August, 2017.

 

Suvi Rihtniemi, the chief executive of HSL, revealed that the proposed de-regulation has already generated interest among several companies both in and outside Europe.

 

“HSL’s tender is of a size that ensures that there’ll be interest. We’re talking about a mid-sized market,” she pointed out in an interview with the commerce-oriented newspaper. “International companies and key industry players have already shown interest.”

 

The vast majority, 63 million, of the 75 million passenger rail journeys made in Finland in 2016 were made in Greater Helsinki, according to data from the Finnish Transport Agency. The journeys made in the capital region amounted to 1.2 billion passenger-kilometres and the journeys elsewhere in the country to three billion passenger-kilometres.

 

Finland to provide access to rolling stock


The Finnish passenger rail market will be opened to competition by tendering out concession contracts that oblige the service providers to guarantee the availability of passenger rail services in a pre-determined area.

 

Berner also revealed that three special-purpose companies will be established to ensure the service providers have equal access to the services and rolling stock of the state-owned railway company, the VR Group.

 

Providing access to the rolling stock is particularly important due to the 1,524-millimetre track gauge in Finland, reminded Antero Alku, a consultant specialising in public transport.

 

“International companies with existing operations elsewhere in Finland will definitely be interested in coming to Finland. Their interest will be increased by the fact that the services will be organised through a rolling stock company,” he told Kauppalehti.

 

The unconventional track gauge may also provide some unexpected advantages. The service providers may, for example, be able to take advantage of the 8,000-kilometre rail freight route that is to be opened between Kouvola, Finland, and Zhengzhou, China, in the latter half of 2017.

 

Further details of the de-regulation and the tendering process will be provided in a news conference organised by HSL and the Ministry of Transport and Communications on 4 October, 2017.