Tallinn-Helsinki tunnel to cost around 16 billion euros
The tunnel project could be economically feasible by using a public-private partnership (PPP) model where the private sector finances the building of the tunnel and an EU grant would be needed to cover 40 percent of the costs.
After becoming operational, the ticket revenues from the trains and tunnel fees would cover the annual operational and maintenance costs of the tunnel.
In addition, the train operation requires subsidies. The subsidy from Finland and Estonia would be 280 million euros per year for 40 years, it can be seen from the results of the study.
Results of the study show that the direct profit from the tunnel for the region would be more than five billion euros. This mainly consists of the time saved calculated into money. In addition, indirect effects would bring in seven billion euros to the region.
The projected cost of the project includes, for instance, tunnel construction, two artificial islands, planning costs, stations, terminals and depots, but excluding the costs for rolling stock.
According to the FinEst Link feasibility study, the railway tunnel would help create a metropolitan twin city region of three million inhabitants in the future where people, goods and services could move around easily.
The expanding labor market would create economic growth, open new possibilities for businesses and improve the quality of life.
The Helsinki-Tallinn tunnel with a travel time of only 30 minutes would enable daily commuting across the Gulf of Finland and connect the rail network from Central Europe via Finland to the Arctic.
"From the viewpoint of deeper twin city integration and regional development there could be major benefits from the tunnel. Geographically Finland resembles an island and the tunnel would offer a connection to the Central European rail network," FinEst Link project director Kari Ruohonen said.
FinEst Link is a research project funded by the European Union, which focuses on studying the feasibility of an undersea railway tunnel between Tallinn and Helsinki. The total budget of the project is 1.3 million euros and it is co-financed from the Interreg Central Baltic program.
The project is led by the Helsinki-Uusimaa Regional Council in partnership with the cities of Helsinki and Tallinn, the Harju County government, the Finnish Transport Agency and the Estonian Ministry of Economic Affairs and Communications.
Finnish media reported a parallel plan initiated by private entrepreneur Peter Vesterbacka, a veteran co-founder of Angry Birds' producer, Rovio. He told Finnish broadcaster Yle on Wednesday that his plan would be operational much faster.
Criticizing the public venture for its slowness in progress and uncertainty to raise fund, Vesterbacka said the construction would be completed in 2024 under his plan.
He expressed disbelief in the willingness of European states to finance the tunnel, and said his financing would be from China and from Nordic pension companies. ■