VR gets 9-year contract for passenger rail transport services

The Ministry of Transport and Communications and the National railway operator VR Group Ltd have concluded a nine-year contract for purchasing passenger rail transport services, said the Ministry in a press release.

The contract period is 1 February 2022–31 December 2030.

The Ministerial Finance Committee on Thursday endorsed the contract. It was signed after the Committee had considered the matter.

With the help of purchased transport services, it will be possible to maintain the current level of passenger transport services also during the COVID-19 epidemic. Services that are deemed necessary but do not provide the ticket income to make them commercially viable will be procured by the central government through a direct award procedure.

A prior notification has been made and published in accordance with EU legislation. After the contract period, a competitive tendering model must be introduced in the procurements as required by EU regulations.

VR’s exclusive right to provide passenger rail transport services expired at the end of 2020, and the impediment to market-based competition has thus been removed. The long contract period allows careful preparation for the subsequent competitive tendering process.

The value of the contract, including VAT, for the entire period is at most EUR 313.83 million. The compensation for transport service provision per year is EUR 34.87 million, including VAT.

The purchase contract includes regional rail services in the commuting area of Southern Finland operated using Sm2 and Sm4 trains, and railbus services on quieter long-distance transport routes. It also comprises regular night train services to Lapland and some Intercity and Pendolino routes complementing the market-based services.

Transport services may later be added to the package of contracts if appropriations so allow or, for example, if regions themselves contribute to the costs. Consequently, possible changes over the contract period in railway infrastructure, for instance, could be taken into account in the transport services.

In addition, the Ministry of Transport and Communications and its administrative branch will this spring discuss longer-term development opportunities and needs with the regions in the manner agreed in the government budget session in autumn 2020.

As part of the contract, investments could also be made in new night train rolling stock.