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Budget proposal 2009: more than 2 billion euros for the Minister of Transport and Communications’ administrative sector

Press release 15.09.2008 14.00
Finnish original released on 15.09.2008 13.51

The Government proposes a sum of 2,109 million euros for the administrative sector of the Ministry of Transport and Communications (1,783 million excluding VAT) for the year 2009.

The majority of the administrative sector’s appropriations are for building and maintaining the transport infrastructure. A total of 402 million euros is proposed for building roads, railways and waterways, and for maintenance 899 million euros.

Projects for developing
the transport infrastructure

The budget proposal for rail projects includes the building of a ring line around Helsinki. For this an authorisation of 404 million euros is proposed in line with the proposals of the transport policy report. For continuing the planning of a western metro line 6.8 million euros will be allocated next year.

The budget proposal includes three projects for developing transport infrastructure to be started next year with funding allocated to bring the projects forward. According to the transport policy report, projects will be started on the first stage of Ring Road III on the E 18 highway and the electrification of the Seinäjoki-Vaasa railway line. In addition, the new Kilpilahti road connection will be started. The projects will be implemented by interest-free funding allocated to complete the projects earlier than planned.

In order to implement the first stage of Ring Road III on the E 18 highway, the City of Vantaa will finance the Government’s costs for building the route, and the Government will reimburse them to the City when the project is completed. In a similar way, the City of Vaasa and the municipality of Mustasaari will finance the electrification of the Seinäjoki-Vaasa line. In the case of the Kilpilahti road connection, six parties in addition to the Government have committed themselves to financing its costs. Neste Oil Oyj is also financing the Government’s share.

In addition, the budget for 2009 allocates 42 million euros for basic improvements on the incomplete parts of highway 5 between Lusi and Mikkeli and 8 million euros for the Pietarsaari sea route. The implementation of the Pietarsaari sea route relates to the Government resolution of spring 2008 to ensure the supply of timber to industry.
Next year two important road projects will be completed: Hakamäentie in Helsinki and highway 4 at Kemi and the bridges on that stretch.

Focus of basic infrastructure
maintenance on assuring timber transport

The Government proposes spending 510.6 million euros on basic infrastructure maintenance. With this sum, the condition of the main highways and other busy roads will be kept at their present level. A sum of 15 million euros has been allocated for maintaining the condition of the roads essential for timber transport. In addition, 4.9 million euros will be spent on tackling safety problems arising from traffic to and from the East.

A sum of 356 million euros will be spent on basic rail maintenance. With this sum, the entire rail network will be kept in trafficable condition. This includes rail charges and other income amounting to 53 million euros. 5 million euros will be spent on maintaining the railway lines necessary for timber transport. In addition, timber transport will be assured by making basic improvements to the Porokylä-Vuokatti line.

Government aid allocated for private roads will be 23 million euros in 2009. Of this, 10 million euros will be allocated for private roads that are important for timber transport.

Government aid for public transport
in major urban regions

A total of 99.4 million euros will be spent on purchasing and developing public transport services.
Of this 31.4 million euros will be spent on purchasing long-distance rail traffic services. For Helsinki’s local rail traffic outside the Helsinki Metropolitan Area, the purchase sum is 10.9 million euros, which will ensure a better level of service than income from fares would allow. The services offered from Helsinki to Riihimäki, Karjaa and Lahti are to be improved as demanded by the development of rail traffic and capacity.

A sum of 26.3 million euros is proposed for purchasing regional traffic services provided by coaches and taxis and for subsidising local traffic. The purchases will be used to improve traffic connections in non-built-up areas.
One million euros will be spent on air traffic between Varkaus and Savonlinna. An appropriation of 1.2 million euros will be budgeted for a night train service to Kemijärvi.

When deciding on the new motor vehicle taxation, the Government brought forward the aid for public transport in major cities to begin in 2009. The proposal includes a sum of 5 million euros, which will be spent on measures to improve the service level of public transport in major urban areas.
A sum of 7.8 million euros is proposed for running scheduled traffic vessels in the archipelago.

Competitiveness of shipping
to be improved

Of the appropriations for the Ministry’s administrative sector, 95.2 million euros will be allocated to shipping.
Measures to strengthen the competitiveness of shipping will be continued by granting an extensive aid package. To improve the competitiveness of the vessels used in sea traffic, the reimbursements of tax withholdings from which some shipping companies liable to pay tax are exempted and of employers’ social security payments will be extended to cover passenger ships in sea traffic outside Finnish waters. In addition the support will be extended to cabotage traffic. The extended aid package will mean an increase of 0.55 million euros in 2009.

These measures are part of the project to improve the competitiveness of Finnish merchant shipping, which also includes the reform of the Tonnage Tax Act and extending the compensation paid for costs of crew change.
Fairway charges are to be lowered by 1.6 per cent. At the beginning of this year, fairway charges were cut by 10 per cent. Fairway charges go to cover the Government’s costs of maintaining fairways for merchant shipping, Vessel Traffic Services and icebreaking.

Continuing development of the
MTC’s administrative sector

The activities of the Finnish Institute of Marine Research will be reorganised from the beginning of 2009. The field of physical maritime research will be transferred to the Finnish Meteorological Institute, while operative functions and research relating to Baltic Sea ecology will be transferred to the Finnish Environment Institute, where a maritime centre unit will be established.

Measures to develop transport administration will also be continued. The Ministry of Transport and Communication has appointed special enquirers and working groups to prepare the establishment of agencies for transport and infrastructure and for traffic safety. The target is for the new agencies to start operations in 2010.

The internal production of the Finnish Maritime Administration is to be incorporated as a company at the beginning of 2010. This move will affect some 300 employees.

For further information, please contact:

Special Adviser Kari Jääskeläinen, tel. +358 (0)9 160 28325, +358 (0)44 058 1030
Permanent Secretary Harri Pursiainen, tel. +358 (0)9 160 28389, +358 (0)500 787 742
Director-General Juhani Tervala, tel. +358 (0)9 160 28482, +358 (0)50 552 7260