24.10.2014
According to Indrek Orava, the head of Rail Baltic Estonia, another feasibility study will be commissioned to prepare a business plan.
Rail Baltic is a commercial project. When it comes to financing it, it is important for Europe that it is profitable. Where will this profit come from?
I have a lot of time to give an exhaustive answer during my first few days at work. My interest is to get the business plan together as quickly as possible. The first basis for this is the AECOM study, which was sufficient to analyze the number of passengers and cargo flows. Next year, there are plans to conduct an additional cost-benefit analysis, which will be commissioned by the joint venture. We will be able to talk more specifically about the figures when we have met with representatives of various industries, various exporters, and large operators. The direct benefit to the state will come from the infrastructure usage fee. Little has been said today that Rail Baltic is an opportunity for Estonia to create more distribution centers and offer various additional services, such as warehousing.
What happens if a new cost-effectiveness study no longer shows cost-effectiveness?
I don't believe it myself. The volume of Finnish industry and exports is large enough, as is the volume of goods coming to Estonia from Western Europe and other continents, which one way or another move to Finland and the St. Petersburg region. I would even rule out this possibility (non-profitability – UJ) for now, because the AECOM study was not conducted on such different grounds that a new study would lead to a completely different result.
Almost half of the total cost of Rail Baltic will be borne by the state. So what is the official amount that Estonia will definitely have to pay?
Today, the figure is about 500 million euros over the next ten years. With the first application, it may remain at 100 million euros. This in turn will create a real need for the first part in 2017.
Is there a worst-case scenario that this amount could be greater than the aforementioned 500 million euros?
If we exclude the possibility of EU funding being lost, the amount could increase in two cases: if the route becomes longer or if more special solutions are needed, such as bridges or tunnels. There should be no unexpected increases in the cost of the project.
Are you absolutely sure that European money will come in the expected amount?
I am. Rail Baltic is comparable to other high-priority projects for the European Commission. However, we will only get the final cost when we start dealing with construction procurement. And only then can we finally talk about the profitability of Rail Baltic.
Where does the 500 million that will remain Estonia's own contribution come from?
I'm not the right person to say this, it's the government's decision where it will be allocated from...
But what are these options?
I would rather not speculate. This is a political decision, a budgetary matter that is reviewed every year.
Estonia has come further than Latvia and Lithuania in its preparations. How long do we have to wait for them to start taking the first step after the creation of the joint venture?
I think they are both interested and motivated in the Rail Baltic project. I don't know exactly how much they are behind. I have heard that the Lithuanians may have a special interest in the route from Kaunas to the Lithuanian border, but whether and how this will affect the final decisions is difficult to say.
Board of specialists
The Rail Baltic joint venture, which will be established next Tuesday, will have a paid board, whose members, according to Indrek Orava, are experienced people with experience in high-speed rail. “They will be working in Riga on developing the Rail Baltic business model and marketing it,” he described.
Estonia's interests are protected through the council, which has two members each from Estonia, Latvia and Lithuania. "There are also members from Poland and Finland, but they do not have voting rights. In the first year, Estonia will chair this council. We can ensure that the work goes well," said Orav.
Source: Estonian Daily, 24.10.2014
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