VR Group and the Ministry of Transport and Communications to enter an agreement for purchasing rail transport services until 2030

The extent of operation under the new agreement corresponds to the current level and its annual operating compensation, including VAT, is 34.87 million euros. In the contract, VR Group has a financial incentive to ensure the contractually agreed performance and quality level. Some of the operating compensation may be lost if trains are cancelled for reasons attributable to VR or if the quality of service, such as punctuality, does not meet the agreed standards.

The new contract covers approximately 16% of long-distance trips in Finland and approximately 44% of long-distance trains. In commuter traffic, 17% of trips and 19% of trains are contract traffic (2019), and 83% of trips and 81% of trains are HSL commuter traffic.

The traffic covered by the agreement will mainly be financed by ticket revenues (68%). The Ministry of Transport and Communications will reimburse 22% of the costs and HSL will reimburse 10%. The comparison is based on the figures from 2019.

“With the new contract, we can secure traffic to all regions in Finland and simultaneously continue to promote carbon-neutral travel in accordance with our strategy. At the same time, we are taking the business risk of increasing the number of passengers over the next nine years. The long contract period also enables long-term development of the customer experience,” says Topi Simola, Director of Passenger Services.

VR Group commits to large rolling stock purchases in the new agreement. During the contract period, more than 280 million euros will be invested in new night trains and commuter trains. The contract also provides for a separate compensation for the purchase of night trains.

In addition, VR Group has reached an agreement with HSL on a joint use agreement, which will allow HSL customers to travel on VR's own commuter trains, as before.

Competition on the tracks is open

The new contract traffic agreement does not affect long-distance routes which are profitable under market conditions, whose competition in Finland has already been opened up in 2021. The competition for long-distance traffic has been opened using the so-called Open Access model, where each operator competes with its own fleet. In Finland, market-based long-distance traffic covers approximately 84% of journeys and 56% of passenger trains.

In commuter traffic in the Helsinki metropolitan area, HSL owns the fleet and has tendered the operator in 2020. VR won that tender.

The content of the new contract traffic agreement will also be open to tendering at the end of the contract period. VR commits to ensuring that the new rolling stock to be procured is available to the winning bidder and that personnel can be transferred to the new operator if necessary.

“The agreement enables longer-term planning for the first time, and thus also provides better starting points for the regions for matters such as zoning and traffic planning. The new agreement will give the regions a new opportunity to acquire more transport independently. This is planned, for example, in the Tampere region,” Simola says.