Norway stops further competitive tendering of passenger rail

The new Norwegian government is making radical changes to the railway policy. They say no to tendering, splitting and privatisation of the railway, and plan to stop the ongoing tendering of railway sections in Norway. 

Norway will review the structure of the railway with a view to a ‘more comprehensive and clear organisation’. Concretely, the plans mean that Norway will stop further competitive tendering of passenger traffic on the railway. This also goes for the planned competitive tendering of tasks within operation and maintenance related to the railway’s infrastructure. However, the railway’s competitiveness in freight transport must be strengthened. The new government was appointed on 14 October 2021, and is a coalition of the Labor Party and the Center Party.

In 2015, Norway opened up passenger train lines to competition. Before, Norwegian State Railways (NSB) operated most of the railway network in Norway, which is now known as Vy, and is still fully owned by the Norwegian state. Swedish operator SJ took over passenger traffic in Norway with package 1 in the North, the UK-based Go-Ahead package 2 in the South and Vy operates package 3 in the West.

Competition sooner or later

SJ, the national Swedish operator, which has run trains to and from Norway for over 100 years, has responded that it regrets the development announced by the new government. “Our experience is that competition gives the state more train for the money and travelers a better product”, says Dan Olofsson, Head of Tendered Services to RailTech. He notes that the European Fourth Railway Package is also being implemented in Norway, and that traffic will be exposed to competition again sooner or later. “A direct awarded contract may only last for a maximum of 10 years. A temporary stop in the market opening will only lead to a pause in the development in Norway.”

Olofsson says that SJ faces strong competition from the Norwegian state owned train company, Vy, in their own country Sweden. “It’s not a fair market to give Vy advantages of a “protected home market” in Norway, without competition from other train operating companies, but at the same time allowing them to compete in other countries like Sweden.” SJ will ask the Norwegian Railway Directorate if their current operations in Norway will still be possible in the future. SJ is one of several companies that are interested in operating local train traffic in the Oslo area from December 2023. That traffic is operated by Vy today.

Image: SJ Norway

In response to the changed policy plans, Nick Brooks, Secretary General of AllRail, the association respresenting independent passenger rail companies, said to International Railway Journal: “By contrast, renewed directly awarded Public Service Obligations to the state-owned operator are a regressive policy that failed in the past – this will lead to a smaller, more inflexible and inefficient rail market that will not be attractive for the passengers. If Norway plans to be part of a European single rail market, then this is the wrong way to go about it.”

A simpler railway system

Norway will review the current organisation of the railway sector to get a simpler organisation and a clearer division of responsibilities between the ministry, directorate and infrastructure manager Bane NOR. Gorm Frimannslund, CEO of Bane NOR, welcomes that. “We experience that today there is an unclear division of responsibilities and that the sector is confusing. In addition, there is a need for better coordination in the transport sector in general”.

The company structure in the railway sector will also be reviewed, with and goal of fewer companies. This ‘to ensure and simpler everyday life for travelers, and so that the railway can increase its competitiveness against other modes of transport’.

“It is very positive that the government platform explicitly mentions further development, and that they will pursue an offensive railway policy. We interpret this as an intensified investment in train transport”, says Frimannslund.

Further plans

Apart from changes in the organisation of rail and competition, the plan is to reduce emissions from the remaining diesel lines on the railway, either by more electrification of the railway net or the use of other technology. The night train offer will also be improved. In terms of infrastructure, the plan is to build more crossing tracks and double-track parcels and repair bottlenecks to improve the frequency and regularity of the train service between the regions.  In the proposal for the State Budget for 2022, the outgoing government plans to continue its investment in railways at the same level as this year, with 31.8 billion for railways.

At this moment, the website of the Norwegian Railway Directorate, coordinator of the railway sector, still says that ‘competition to operate passenger train traffic will contribute to a better train service, open up the railway sector to new ideas and improvements, and make the state get more in return for its resource efforts within the railway sector’. This will probably be changed following the new government policy.

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Author: Esther Geerts

Editor of RailTech.com

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