Market conditions and operating environment
Industrial restructuring, i.e. the flight of industry from Finland, and trends in key industries in Finland and the neighbouring areas had a particularly strong effect on the development of the logistics business.
For passenger transport, the economic impact was less severe, but it was however reflected in developments in passenger numbers and net turnover. Infrastructure company VR Track operates in a fully competitive environment and succeeded in winning a number of major contracts in 2013.
The opening up of passenger services to competition in the rail sector and the related EU legislation is having an effect on VR Group's activities. – Competition should also be seen in a broader context, for in passenger services rail already competes with other forms of transport, especially with private cars.
The Ministry of Transport and Communications extended VR's long distance service contract until 2024. The terms of the contract include a commitment by VR to large-scale investment in rolling stock.
Passenger traffic volumes are affected by factors such as consumer and travel habits, the regional distribution of the population, the development of infrastructure and services for different modes of transport, and the eco-friendliness of a form of transport. Pricing, punctual services and a smooth, simple overall travel process also affect demand for transport services.
The Finnish Transport Agency is responsible for the condition and development of the national rail network. The condition of the railway infrastructure for its part determines how rail services can be developed and their ability to compete with other forms of transport. Government spending on the construction and maintenance of the rail network has a major impact on the smooth operation of passenger and freight services and on their punctuality. It also affects the infrastructure engineering business.
A mainly single track rail network that is in poor condition in places increases the sensitivity of rail transport to disturbances, and affects the smooth running of rail travel and passenger comfort.