Operating environment

Operating environment

Rail traffic is a future growth sector and the lifeblood of Finland’s competitiveness. However, the single-track railway network and the accumulated maintenance backlog are a hindrance. VR Group operates in a competitive environment and is preparing for the upcoming competition in passenger traffic.

International megatrends affect the operations of all companies. Digitalisation and the new service needs it creates, urbanisation, climate change control and the related changes in operational methods regulate business operations now and in the future. The megatrends will inevitably result in rail traffic becoming a key sector in the future. The growth of rail traffic is necessary in the fight against climate change.

The growth of rail traffic and the development of competitiveness require a long-term investment programme for the railway network, investment projects that are prioritised sensibly and sufficient funding for basic track maintenance. Investments in the throughput and additional capacity of the railway network are essential for the competitiveness of rail traffic. At the same time, the safe development of railway operations must be ensured.

Väylä (Finnish Transport Infrastructure Agency), the owner of the railway network, receives its funding from the government budget, and the appropriations allocated to Väylä define the resources available for track construction and maintenance affecting rail traffic. The parliamentary working group established by the Ministry of Transport and Communications has stated that the funding of the transport network must be increased. According to the unanimous view of the working group, the transport network requires long-term and consistent maintenance and development in accordance with the national traffic system plan.

VR is preparing for passenger rail transport to be opened for competition. Until the end of 2024, VR has exclusive rights in long-distance railway traffic, 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 a contract on commuter traffic until summer 2021. The preparations for the tendering concerning commuter traffic continue, with the decision planned to be made in April 2020.

Railway traffic between Finland and Russia is busy. The share of Russian traffic is 40 per cent of the railway freight traffic in Finland. A 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.