During the next decade, the Finnish railway sector will undergo drastic change as the monopoly of VR, the Finnish state-owned railway operator, is dismantled in stages. The first part to be put out for tender will be the Helsinki metropolitan region’s commuter train service, and this will be followed later by the remaining commuter train services in Southern Finland, and, later still, by the long-haul passenger train services.
What will the practical implications of the market being opened up for competition be?
Firstly, we will most likely see fierce competition between train operators, and probably also new operators transporting passengers on the Finnish railway network. Besides VR, six foreign operators have shown interest in operating commuter trains in Southern Finland. They include SJ (a Swedish operator), Transdev (an international public transport operator), Arriva (an operator owned by Deutsche Bahn), MTR (based in Hong Kong), and two British operators. Most of them are already active in Sweden, whose market underwent a change similar to the one about to be implemented in Finland, roughly 20 years ago.
Secondly, as competition increases between operators, the quality and reliability of rolling stock will be emphasized. This phenomenon is likely to have two distinctive and somewhat opposite effects:
- The demand for supporting services will increase.
- Cost pressures on the providers of supporting services will also increase.
The first effect will result from operators trying to differentiate themselves by improving passenger satisfaction and comfort through more frequent cleaning and better services on rolling stock, thereby increasing the demand for these services. The latter effect will result from operators striving to cut costs and make their operations more efficient, thereby improving their competitive position relative to peers.
At this point, it is unclear what the relative magnitude of these effects will be, but one thing is certain. The railway reform will affect not only train operators, but also the providers of supporting services. The latter should not expect to go about their business as usual, as the railway reform will be comprehensive and will – in one way or another – affect all of the parties involved.
Only time will tell what the actual results of the reform will be. But, if we look at what has happened in Sweden, it is evident that it can lead to not only a fragmented train operator scene, but also a fragmented supporting services market. As we wait patiently for what the future will bring, the VR-operated trains will nonetheless continue to rumble across the forested Finnish landscape as usual.