Estonia expresses doubts about €15bn Baltic tunnel plan

The government of Estonia has expressed doubts about the business case underlying a €15bn plan to build the world’s longest undersea tunnel between Tallinn and Helsinki, which last month was the subject of a memorandum of understanding between Finnish and Chinese developers, financiers and engineers.

Taavi Aas, Estonia’s minister for economics, said in an interview with the Bloomberg news agency: "We need a clear understanding of where the money is coming from and in what amount. Where are the guarantees that it will be completed? The developer hasn’t been able to respond how it’s estimated the volume of people that will be traveling through there."

The interview follows a letter from Estonia’s Public Administration Minister Jaak Aab last month in which he said the plan to open the tunnel in 2024 was not realistic.

State-owned firms China Railway International Group, its parent company China Railway Group and China Communications Construction Company signed an agreement in July with the Finnish developer Finest Bay Area Development and its main funder, China’s Touchstone Capital Partners.

Paul Kunnap, a lawyer representing the developer, said it was working on providing more detailed answers for the Estonian government so a decision can be taken "as soon as possible".

The project to build a twin-bore 103km tunnel between Helsinki and Tallinn was suggested by Finnish entrepreneur Peter Vesterbacka, a developer of the Angry Birds video game. It would form the final leg of the EU’s Rail Baltica project to improve communications between the Baltic states and the union.  

A feasibility study into the tunnel was concluded in February last year. It found that by 2050, demand would reach 12.5 million passengers and 4 million tonnes of freight a year.

This gave a cost-benefit ratio of only 0.45, owing to the high capital cost, but the study recommended the scheme on the basis of its impact on regional development, which it estimated at between €4bn and €6.9bn a year.

Anne Berner, the Finnish transport minister, said at the time: "The tunnel would, together with the Rail Baltica railway project and the Arctic railway line, connect the Arctic region with the heart of Europe via Finland. The tunnel could thus be a significant project for all of Finland and Europe, not only for Helsinki and Tallinn."

Image: A rendering of Rail Baltica (Eiropas Dzelzceļa Līnijas)

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