HSL’s operational and financial plan 2016-2018

The Helsinki region public transport route network will expand further in August 2016 when the Metro starts running to Matinkylä. The West Metro will provide a frequent rail link from South Espoo to Helsinki city center and East Helsinki. In addition, next year will see the first stage of the extensive ticketing and information system reform.

When the West Metro starts operating, bus services in South Espoo and Lauttasaari will be mostly converted into feeder services and most routes will be renumbered. “According to impact assessments, the West Metro and its feeder services will increase the modal share of public transport in the Helsinki region by 1.1 percentage points. This translated into over 11,000 more daily journeys. Two thirds of the increase is due to people switching from driving to public transport," says HSL Executive Director Suvi Rihtniemi.

The Helsinki region ticketing system and passenger information will undergo a comprehensive reform over the coming years. In future, customers will get real time information both before and during their journeys and be able to tailor information services to their own needs e.g. for mobile use. A new fare and ticketing system based on zones will be introduced at the end of the planning period. In the new system, fares will be based on the distance traveled instead of municipal boundaries.

HSL and VR have been negotiating a contract on commuter train services for 2016-2021.HSL has estimated that the agreement would offer cost savings of about 30 million euros over 5 years compared to the current cost level. 

 The savings would be as large as the estimated financial benefits from rapid competitive tendering of the services over the same period of time. The new contract is scheduled to be discussed by HSL Executive Board in early 2016 and it would take effect on 1 April 2016. If the contract is concluded, HSL will continue to prepare the tendering of commuter train services with the aim of having the tendered services begin in summer 2021. Otherwise the preparation of the tendering will continue so that tendered services could begin as soon as possible after the termination of the current contract.

An electric bus system is being developed in the region and during this year and the next, HSL purchases 12 electric buses from a Finnish manufacturer to be leased to operators.“We are trying a new system where HSL procures the buses because we do not want to transfer the technology risk to the operators. This way we will be able to create the first electric bus system in Finland," says Suvi Rihtniemi.

As HSL’s member municipalities are not willing to finance the Kutsuplus service, the service provided by HSL will be withdrawn at the end of 2015. HSL is trying to find another service provider from 2016 on.

About half of HSL’s expenses are covered by ticket revenue and the other half by municipal contributions from the member municipalities. According to Rihtniemi, the generally poor economic outlook presents additional challenges when planning for the coming years. “The weak economic prospects of the municipalities decrease their possibilities to invest in public transport. The Ring Rail Line and West Metro improve service level but this kind of major infrastructure projects also significantly increase HSL’s expenses over the coming years. Consequently, we need to raise ticket prices substantially more than in recent years."

HSL’s budget 2016

In 2016, HSL's operating income will total 647.2 million euros, an increase of 4.2 per cent compared to the 2015 forecast. Ticket revenue is estimated to increase by 4.8 per cent to 322 million euros. Ticket prices will go up on average by 4.9 per cent in 2016. Ticket revenue accounts for 49.8 per cent of HSL’s operating income.

The expenses that cannot be covered by ticket revenue or other income are covered by municipal contributions paid by the member municipalities. In the 2016 budget, municipal contributions total 309.9 million euros accounting for 47.9 per cent of HSL’s operating income.

The State subsidies for public transport in large cities is estimated to amount to 4.7 million in 2016-2018, accounting for 0.7 per cent of HSL's operating income. Other subsidies are estimated to amount to about 0.8 million euros. Income from penalty fares is estimated to total 5 million euros, with a 2.4 million credit loss and credit loss reserve. HSL proposes an increase from 80 euros to 100 euros for the penalty fare.

In 2016, HSL's operating expenses will total 654.2 million euros, an increase of 9.2 per cent compared to the 2015 forecast. Public transport operating costs are the largest item of expenditure at 492.5 million euros (75.3%). HSL uses 312.7 million euros for bus services, 88 million euros for train services, 52.3 million euros for tram services, 33.9 million euros for Metro services and 4.1 million euros for ferry services. HSL has reserved 1.6 million euros for transition period operating costs incurred by the termination of Kutsuplus.

HSL pays compensation for its member municipalities for the use of public transport infrastructure owned by the municipalities. In 2015, the compensations are 99.2 million euros, which is 15.2 per cent of HSL’s total operating expenses.

In 2016, HSL’s investment costs are 46.8 million euros, of which the ticketing and information system reform account for 40.8 million euros.

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