Rail Baltic Estonia announces procurements potentially worth over one billion euros

Construction of Rail Baltic railway viaducts. The Urge viaduct and ecoduct. Photo: Madis Veltman

Rail Baltic Estonia on Wednesday announced two large procurements, the total value of which could exceed one billion euros.

As a result of the alliance procurement, two contracts will be signed for the construction of the Rail Baltic main line between Ülemiste in Tallinn and the southwestern Estonian city of Pärnu, and between Pärnu and the Estonian-Latvian border, the total value of which, together with additional possibilities for the procurement of strategic materials, may reach 932 million euros. In addition, a procurement of 57 million euros was announced for the construction of the Linda terminal building at Ülemiste.

«Rail Baltic will connect Estonia to the European railway network, creating a new economic and mobility corridor that will benefit not only the Baltic countries, but also Finland, Central Europe, and further regions. The time impact of its construction on our economy is clearly positive, bringing an estimated over 650 million euros in tax revenue to the state budget. Today we are celebrating a significant milestone in the development of the Rail Baltic in Estonia by announcing the largest infrastructure procurement in the country's history, with a value of nearly a billion euros,» Minister of Infrastructure Vladimir Svet said.

Anvar Salomets, chairman of the management board of Rail Baltic Estonia, said the announcement of these procurements allows us to take an important step forward. The construction of the main line and the Ülemiste terminal will result not only in better connections with Europe, but also new opportunities for the region's entrepreneurs. All project partners -- architects, engineers and builders -- are working to ensure that by 2030 the Rail Baltic railway can be fully completed and start serving both passengers and freight, Salomets said.

The Linda terminal at Ülemiste will become one of the region's most modern and environmentally sustainable transport hubs, connecting international train services with local modes of transport.

The first phase of the terminal construction project, which involves building underground load-bearing structures, pedestrian tunnels, and technical rooms, has already begun. Subsequent phases will see the construction of the terminal building along with adjacent areas, including a tram line and parking areas.

Gianluca Racana, member of the board of Zaha Hadid Architects, the firm that won the terminal's architectural design competition in collaboration with Estonian firm Esplan, stressed that the design of the Ülemiste terminal has been created to integrate seamlessly with the surrounding environment, offering passengers a high level of comfort and connectivity. The project has also taken into account modern standards of environmental sustainability, making it a state-of-the-art transport hub for the 21st century.

Alliance procurement is a project implementation model where key project players -- the contracting party, the designer and the builder -- work closely together towards a common goal. This means that they share responsibilities and risks, work as a single team, and always make decisions with the benefits of the project as a whole in mind. The aim is to achieve the best possible result in terms of quality, timing and cost-effectiveness.

Rail Baltic Estonia has set out to find two strong tenderers to be awarded separate contracts for the two sections of the main line. The first contract covers the superstructure of the Ülemiste-Pärnu section and the base structure of the Tootsi-Pärnu section, with an estimated cost of 394 million euros. The second contract, estimated at 332 million euros, covers the design and construction of the Pärnu-Ikla section. In the course of the procurement, a single ranking will be compiled: the first-ranked tenderer will enter into a contract for the construction of the Ülemiste-Pärnu section, termed Alliance 1, and the second-ranked tenderer will enter into a contract for the Pärnu-Ikla section, Alliance 2.

The total volume of the contracts is estimated to be 726 million euros, but with the additional possibility of acquiring strategic materials, the total cost could reach 932 million euros.

The construction of the main line of the Rail Baltic is divided into several phases. First, there will be a development phase from 2025 to 2026, during which a detailed design will be prepared, necessary permits will be sought, and preparatory work will take place. Construction work will then begin, lasting from 2026 until the end of 2030. The final completion and commissioning are planned for the final quarter of 2030, when Rail Baltic will start serving both passengers and freight.

A more detailed schedule for the construction procurement of the Ülemiste terminal foresees the conclusion of the contract in April 2025. Construction work will begin in November of the same year and the building will be completed in February 2028. The final readiness and handover of the building to the client is scheduled for October 2028.

These procurements mark not only significant progress in the construction of Rail Baltic, but also the implementation of an effective model of collaboration, as alliance procurement allows to reduce costs and optimize the process. Successful execution of the project requires precise planning and close cooperation between all parties, Rail Baltic Estonia said in the press release.