Assessment memorandum out for comments: Organisation of passenger rail traffic to change in 2030s

The Ministry of Transport and Communications invites comments on the assessment memorandum concerning passenger rail services in the 2030s. The memorandum provides a knowledge base for making decisions on the organisation of passenger rail traffic in the 2030s. Comments on the memorandum may be submitted until 19 May 2023.

Publicly funded passenger rail traffic will need to be reorganised in 2031 in order to achieve the agreed European Union goals. The current passenger rail service contracts expire in 2030. The next Government will have to lay down guidelines on the future passenger rail markets and services no later than in 2024.

The assessment memorandum now circulated for comments seeks to provide a knowledge base in support of this decision-making. The memorandum is continuum to the ministries’ Futures Review and the contribution by the officials of the Ministry of Transport and Communications issued in March 2023. The memorandum has not been subject to political consideration.

The assessment memorandum examines the current state and future of passenger rail service procurement. It describes the decisions that must be made in the Government term starting in 2023 as well as the process for an orderly transition, by 2030, to procurement arrangements consistent with EU regulation.

Finland must establish a level playing field

EU regulation requires a level playing field in the passenger rail services market. The EU also encourages boosting rail’s modal share. The organisation of publicly procured services is premised on tendering.

Passenger rail services in Finland will need to be put out to tender in line with EU regulation when the current contracts expire. Tendering is used to ensure that passengers have access to the desired services. Before tendering, the State must determine the passenger rail services to be provided. The assessment memorandum recommends that the tendering be organised centrally under the leadership of the Ministry of Transport and Communications.

Under the directly awarded contract that is currently in effect, the State acquires passenger rail services from Finnish State railway company VR in the amount of EUR 39.4 million annually. The contract expires in 2030. Its renewal will not be possible, as Finland as an EU Member State is committed to the tendering of passenger rail services.

Finland is one of the first Member States to put into place the legislative amendments required to guarantee that railway companies have open access to the market. The open access approach requires the company to have its own locomotives and railway carriages. Since Finland has a track gauge different from other European countries, rolling stock suitable for use in Finland is, for all intents and purposes, only available in Finland. To date, the open access approach has not resulted in any company joining VR on the Finnish market.

A level playing field is an obligation under EU regulation. The assessment memorandum states that a rolling stock company must be established in Finland and other structural arrangements put into place to enable tendering.

Finland should make every effort to bring about the conditions required for open competition so as to give companies a level playing field in the passenger rail services market. This way, competition and the benefits to society arising from competitive tendering can be achieved.

What’s next?

The consultation on the assessment memorandum closes on 19 May 2023. Organisations and individuals may submit comments on the memorandum at www.lausuntopalvelu.fi or by email to [email protected].

Publicly funded passenger rail traffic must be reorganised in 2031 so as to achieve the agreed European Union goals.

Prepared by public servants as part of their official duties, the assessment memorandum proposes that the preparations for organising services in the 2030s be carried out by the Ministry of Transport and Communications in 2023–2025. The competitive tendering of passenger rail services would take place in 2026–2028. The operation of services under the awarded contracts would commence in 2031. The timetable and stages of the process will be refined as the project progresses.

Inquiries:

Chief Specialist Jani von Zansen, jani.vonzansen(at)gov.fi, p. 050 471 1108

Ministerial Adviser Emmi Nykänen, emmi.nykanen(at)gov.fi, p. 050 414 3066

Head of Unit Emil Asp, emil.asp(at)gov.fi, p. 040 509 9757