The Ministry of Transport and Communications proposes the continuation of eastern rail link project company negotiations based on the Porvoo-Kouvola route to the Ministerial Committee for Economic Policy
The Ministry of Transport and Communications announced on 30 September 2020 that the negotiations for an eastern rail link project company would proceed based on the Airport-Porvoo-Kouvola route. The Ministerial Committee for Economic Policy will discuss the proposal in the late autumn.
On deciding the conditions and requirements for the founding of the Finland Railway and One Hour Train project companies, the government placed the Ministry of Transport and Communications in charge of developing a high-speed rail connection in the east. The Ministerial Committee for Economic Policy decided on 10 September 2019 that the Ministry of Transport and Communications would investigate and compare different routes, as well as developing a high-speed rail connection in the east.
To this end, the Ministry of Transport and Communications entered into talks with regional operators in June 2020 regarding the conditions for founding a rail connection planning project company.
Talks with municipalities over the summer
The talks started in June after the Finnish Transport Infrastructure Agency (FTIA) had published their comprehensive report on the evaluation of development options for rail connections in Eastern Finland. The report was commissioned by the Ministry of Transport and Communications. The report compared the speeding up of rail connections in the current and new rail corridors, Airport-Porvoo-Kouvola and Airport-Porvoo-Kotka-Luumäki.
The conditions for starting development by a project company were discussed at a meeting held in June, based on the FTIA report. The municipalities' readiness to participate in the founding of the project company and the funding of the eastern connection's planning with principles similar to those that had been used as the basis for the Finland Railway and the One Hour Train was gauged in the same instance. The project companies for the Finland Railway and the One Hour Train were founded on the condition that the other stakeholders would commit to capitalising the company for 49 per cent of the estimated costs.
Based on the responses of the eastern regional operators, the municipal share of financing required for the project company model, a total of EUR 34.3 million, could be obtained for a project company tasked with planning and financing the Porvoo-Kouvola route until it was ready for construction. The ministry opened talks with the municipalities committed to the Porvoo-Kouvola route planning project company on 7 October 2020.
Meanwhile, the responses of the municipalities backing the Porvoo-Kotka-Luumäki route indicated that their funding would fall more than EUR 16 million short of the required EUR 54 million.
The ministry is aware that the city council of Kotka has since authorised a further increase of EUR 16.3 million for the potential project company. This would satisfy the municipal funding required for the Porvoo-Kotka-Luumäki route.
About the FTIA report
The FTIA report concluded that the development of existing railway lines would be more cost-effective than new direct lines. However, the implementation of new eastern rail connections would net bigger benefits than developing the current railway lines.
Their cost-effectiveness would be diminished by their large investment costs. The report suggested that the Porvoo-Kouvola route would be the more viable of the new rail corridors.
The local operators have had their say in the investigation, and their statements have been requested regarding participation in a project company.
The government's participation and share of funding as part of the eastern project company negotiations will be discussed by the Ministerial Committee for Economic Policy in the autumn of 2020. The Parliament will decide the governmental share of funding in a project company.
The Ministerial Committee for Economic Policy will be informed of the situation at the time of discussion regarding the funding provided to the project company by potential minority shareholders, as well as a comprehensive review of other factors affecting the founding of an eastern rail link project company such as the FTIA report referred to above.
Miikka Rainiala, head of unit, tel. +358 50 571 7751
- Press release 30.9.2020: Eastern rail link project company negotiations to continue based on Porvoo-Kouvola route
- Press release 24.6.2020: Discussions on a project company for eastern rail connection to start
- Press release 10.9.2019: Negotiations on promoting large-scale rail transport projects launched