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Large-scale rail projects get guidelines

11 Sep 2019, 02:01 ( 12 days ago) | updated: 11 Sep 2019, 12:45 ( 12 days ago)

DF Report
Photo VR by Soile Laaksonen.

The Ministerial Committee on Economic Policy on Tuesday supported the guidelines presented by Minister of Transport and Communications Sanna Marin to promote large-scale rail transport investments, said a government press release.

According to the decision by the ministerial committee, the Ministry of Transport and Communications will launch negotiations to establish the project companies ‘Turun tunnin juna’ (One Hour Train, high-speed rail link between Helsinki and Turku) and ‘Suomi-rata’ (Finland Railway).

The negotiations will take place between the municipalities benefiting from the rail transport investments and other publicly-owned bodies. The negotiation groups will be attended by a representative of the finance ministry.

The project companies will be responsible for the planning related to the projects and for its funding until the construction phase. Involvement in the planning and funding does not bind the parties to project construction or funding of the construction.

In the negotiations, the basis for the planning of the rail transport projects will be addressed.  This includes the route alternatives prioritised by the parties and the targeted service level. The topic of directing the proceeds or benefits to be obtained in land use and real estate development to the implementation of the project will also discussed.

The Ministry has initiated a comparative study on the routing of the high-speed eastern connection.  The high-speed eastern connection will be promoted in cooperation with the operators in the area. Decisions on the matter can be made once the study is completed. This is expected in spring 2020.

The ministry has submitted a proposal for the government budget session that the connections with a link to the main line and agreed in the Government Programme – Seinäjoki-Vaasa, Tampere-Jyväskylä, and Tampere-Pori – will be improved and made faster.

A requirement for the establishment of the project companies is that their owners, or partners, will include not only the state but also other public sector or publicly owned entities benefiting from the project. There could also be other partners in the project companies provided that a publicly-owned qualified majority is maintained.

At the initial stages, the state would own at least 51 per cent of the companies and other partners around 49 per cent. The partners should commit themselves to providing capital according to those percentages so that the capitalisation would cover the estimated costs of the planning required to reach the construction phase as well as other expenses necessary for the operation of the project company.

After the approval of the shareholder agreement, the state can provide capital to the project companies as follows: Finland Railway EUR 76.5 million and One Hour Train EUR 38.25 million. The planning costs of the Finland Railway are estimated at about EUR 150 billion. The remaining planning costs relating to the One Hour Train will be around EUR 75 million.

The party responsible for the ownership steering of the project companies would be the Ministry of Transport and Communications. In matters with significant financial or societal impact, the state will not transfer its decision-making-powers to the project companies.

In terms of the state, the result of the negotiations and the shareholder agreement will be later discussed at the Ministerial Committee on Economic Policy.  The ministerial committee will set the policy on the approval of the negotiation result and the establishment of the companies. 

The committee also outlined that Nordic Railways Ltd will not establish a rolling stock or real estate company or a rail baltica company.