Update on the Helsinki region commuter rail contract: Tendering will not begin in 2026
HSL and VR have signed an agreement in the re-negotiation of the current contract for Helsinki Region Transport (HSL) commuter rail services. The contract will continue until 2031 as originally intended, in order to align with the national tendering plan in Finland.
The previously tendered contract allowed the operator to trigger early termination if it could credibly demonstrate that the contract is permanently unsustainable financially. HSL and the current operator, VR, have negotiated the removal of this termination clause. The contract amendment weakens the operator’s financial position, which is why HSL will compensate VR for the removal of this contract amendment by EUR 3.5 million per year from 2026 until the end of the contract.
If the contract had been terminated prematurely, the costs of procuring train traffic would have increased significantly in 2028 already, because the price level of the new contract would have been, based on market analysis, significantly more expensive than the current contract. Additionally, an urgent tendering process could have threatened the development of the train operations market of the entire country in the 2030s.
HSL and VR have also negotiated contract amendments to the identified development needs, including security, traffic reliability, disruption management and energy saving. The related contract incentives and KPIs have been adjusted to better guide the quality of operations. The risk of disruptions from external causes leading to financial loss for the operator will be limited, which is also important for the attractiveness of the next tender.
The agreed items were set in a contract signed on June 12th, and as a result, HSL will not initiate a new tendering process in 2026. The tendering of the next contract will be pushed to 2028, while we continue the development of procurement strategy for all HSL rail operations and maintain engagement with all interested service providers.
Renewal of the tendering timeline enables HSL to collaborate with the national contracting authority to prepare a cohesive strategy for the Finnish rail operations market opening, especially since the end dates of both current contracts are now aligned. The required studies and negotiations will address, among other things, the restructuring of funding, planning, procuring and operating regional rail services. Our priority is to facilitate market opening by developing the contract model, scope and risk allocation principles suitable for new entrants. We support fair and transparent competition by assisting the national authorities with the necessary arrangements for access to rolling stock, facilities and ticketing services.
We will draft a timeline for the preparation and the actual tendering process later this year.
In addition to preparing for the commuter rail tendering, HSL is investigating the competitive tendering of metro and light rail operations. Even though in-house contracting is an option, even partial opening of the urban rail operations market in Finland could support also the sustainability of competition in heavy rail operations market.
For further information, please contact Contract Manager Maiju Lintusaari or Development Manager Kimmo Sinisalo (firstname.lastname [a] hsl.fi).