VR operates in a competing environment and is preparing for the upcoming competition in passenger traffic. Renovation debt for the railway network and single tracks strain the functionality of train traffic. The operating environment is also affected by international megatrends.
VR is preparing for the upcoming competition in passenger traffic. VR has exclusive rights in long-distance railway traffic that are valid until the end of 2024, but the Ministry of Transport and Communications has announced that it wants to speed up the opening of the markets. Train traffic is in constant competition with other forms of traffic, especially buses and passenger cars.
Two thirds of commuter traffic net sales come from Helsinki region transport’s (HSL) contract traffic. VR and HSL have made a contract on the maintenance of commuter traffic until the summer of 2021. Preparing for the commuter traffic tendering continues, and HSL’s objective is that the guidelines for the tendering will be clear by the latest in 2018.
Railway traffic between Finland and Russia is busy. 40 per cent of Finnish railway freight traffic is Russian traffic. A new treaty on the railway traffic between Finland and Russia opened the Eastern freight traffic up for competition at the end of 2016. VR Transpoint’s domestic freight traffic is fully open for competition.
Appropriations define track construction
VR Track gets each of its contracts from bidding competitions. Competition within the infrastructure sector is tense. VR Track’s biggest customer is Finnish Transport Agency (FTA), who owns the railway network and gets its funding from the State budget. FTA’s appropriation defines track construction and maintenance and the width of the planning market related to them. Ministry of Transport and Communications has set forth a parliamentary working group with a task to define the means needed to maintain and upkeep the transport network.
Megatrends affect the operations of all companies. Digitalisation and the service needs it brings, urbanisation, controlling climate change and the changes in operational methods it causes regulate business operations now and in the future.