Entrepreneur Priit Humal writes about Rail Baltic meaning choice between improving the existing railway and building a new line – the latter happening at expense of former. Also: no-one will be riding Rail Baltic from Tallinn to Berlin, nor into Warsaw really.
1 Europe finances 85 percent.
Europe’s financing is not 85 percent of building costs but 85 percent of the sum which pursuant to profitability calculation is not covered by predicted income. Thus – while in Estonia building of RB costs €1bn, the predicted income of future periods ought to cover €340m of that. EU financing does not concern that. In addition, there’s the €100m which will not be covered by income and must be invested by Estonia.
Thus, it is maximally possible to get about half of building costs from EU. Income of future periods are predicted on basis of the prerequisite that cargo shipping on Baltic Sea will dwindle and Finland’s export will be happening over RB. In case RB will have 40 freight trains travelling it daily, and nine passenger trains both ways, RB is set to earn back about €340m (of presumed loan money). If the business plan fails, that’ll remain to be paid by Estonian tax payer.
2 Europe gives money for RB which would not come otherwise.
In case the RB project corresponds to EU requirements, finances for it can be applied from various funds, but generally in all funds appropriations have been made for member states. Within the appropriation, fitting projects can be proposed. If the money meant for the state (appropriation) is exhausted, they don’t get money even for the projects most fitting. Thus, the projects are mostly competing with projects of the same member state financed from that fund.
As fist priority, the financing planned for RB comes from the Connecting Europe Facility (CEF) fund in which, for this budget period, €180m has been allocated for Estonia. Pursuant to CEF fund rules, that money is for transport infrastructure – and, first and foremost, to improve the existing railway. To the credit of those fighting for RB, we must acknowledge they have gotten permission to also use the money for new RB lines. Thus, it is Estonia’s political decision to use money meant for improving existing railways to build a new line.
As inevitably the existing railway requires reconstruction, this will have to be done without EU financing or out of some other funds. Finances from some other funds does indeed sound tempting, but even there Estonia has some definite appropriation and when existing railway projects are financed out of these, some other projects – like highways – will go without. Thus, RB financing, for Estonia, means lifting EU money from other objects unto RB.
As the money allocated for Estonia for the six years is only a third of what is needed for RB, the main hope is that other states will leave money unused. For the second-round-money, we could be candidates outside the appropriations. According to economy ministry department head Toomas Haidak, this is the main RB financial hope. Alas: according to EU railway experts (www.railwaypro.com/wp/?p=11883) it is improbable that money would be left over, as the need for financing in EU railways far exceeds the existing amounts of money; and: member states have long ago become skilled at writing railway financing projects. Should a miracle happen and some money be left over, RB may not be the project most favoured, as Europe has several important railways projects.
What to do when, within the appropriation, RB has gotten its money, but the round two money fails to come? To this question, the ministry did not answer. The options, probably, are as follows:
a) to finish a third of RB and to continue during the next budget period, using the money meant for the next, and maybe also the next but one period for improving existing railways,
b) take money from other appropriate funds of the same budget period, such as cohesion fund highway money, and to hand it also over to RB,
c) not to build RB and the €180m unused by Estonia will remain at the fund, to be competed for by other projects all over Europe.
In any case, building RB will come instead of improving the existing one. In the light of the above, it is ironic what Indrek Sirp wrote in Tartu Postimees (February 27th) in article called Rail Baltic will also boost development of domestic railway («Rail Baltic annab ka riigisisese raudtee arengule gaasi juurde»).
3 Rail Baltic is a fast and cheap travel connection to Central Europe.
Rail Baltic (RB) plans do not contain passenger travel to Germany. Even to Warsaw, passenger travel is highly questionable and an AECOM study only shows ticket prices till Kaunas. Calculated by the kilometre price provided (10 cents/km), a Tallinn-Warsaw ticket would cost €100. At the moment, a ticket from Warsaw to Berlin costs €46. Thus, compared with the cheapest Air Baltic ticket, train travel to Berlin would be twice as expensive. Generally, express train tickets in Germany come at even higher kilometre price. By going from Berlin to Hamburg, for instance (300 km), €45 would be added.
According to Sinclair Knight Merz 2010 data, as the travel distance grows, favouring trains comes down by a logarithmic curve. According to that, less than ten percent of travellers i.e. a couple dozen a day would choose the seven hours train ride from Tallinn to Warsaw. The only option to keep that train going is if lion’s share of passengers are those who travel just some intermediate distance.
Of the short distance travellers, the bulk is those commuting to work or studies. For these, what counts most is the time of the travel. A night-time train is obviously out of the question. The preferred morning time is between 7 am and 9 am. The Train that leaves Tallinn at 7 am is excellent to go to Riga; however, to leave Riga at 9 am to travel to Kaunas – that’s worse. From Kaunas to Warsaw, the train would start in the middle of the day, which is not attractive for locals. Thus, to go from Kaunas to Warsaw, one must probably wait for the evening train.
The 240 km/h speed is not important to get to Berlin faster; rather, the reason is that the faster the train, the longer the distance people use it to cover daily. For instance, a Train doing the Tartu-Tallinn trip in an hour would enable most of commuters to use it daily; with slower connection, they’d do it once a week perhaps. A larger amount of passengers means a larger amount of departures, which in turn increases the amount of passengers.
With passenger traffic, one must mostly count with trips within two hours of length.
4 Via Rail Baltic, Finland gets railway connection with Europe.
According to European transport map (TEN-T), Finland is connected via the Scandinavia-Mediterranean corridor going through Stockholm. Ship connection from Turku to Stockholm is a bit longer that Helsinki-Tallinn, but still the entire trip is 500 km shorter than RB. As the new Denmark-Germany undersea tunnel (Fehmarn Belt) is completed in 2021, it’ll be shorter yet by 160 km.
Probably, the Finns would have nothing against extra options build for them. By their explicit support towards the project, they seem to politely wish well to the neighbour with spade in hand. No obligations. The longer and therefore more expensive carriage of goods along RB will simply be no significant match for the line via Sweden.
5 Train travel to Europe is currently hindered by difference in track width.
Trains with the option of altering track width are used in many places where railways with varying widths need to be travelled. Such devices also exist on both Lithuania-Poland border and Finland-Sweden border. Thus, there are currently no technical obstacles for riding trains from Tallinn to Warsaw. What is problematic is the lack of passengers, goods and/or interested operators. RB’s main advantage with the current one is higher speeds, not width of tracks.
With carriage of goods, reloading containers is comparatively easy, and the reloading station needed for that exists in Kaunas. At the same location, there’s the option to change wheels. Building the European width RB will create substantial additional problems:
1) reloading and track-width change stations need to be built in Estonia and Latvia as well,
2) reloading and track-width change will increase costs and delays, which will be especially felt with short-distance carriage and, in many cases, will make it meaningless to use RB. A St Petersburg-Riga train, for instance, would need its width changed. Should the Helsinki tunnel materialise, the differing widths in Finland and RB would be a problem,
3) the need to build and to constantly operate separate passenger and cargo terminals.