Estonia’s minister of public administration has put the breaks on Finest Bay Area Development’s proposed privately financed tunnel plan between Helsinki and Tallinn characterizing some of the company’s projections as “optimistic.”
“I certainly commend the developer for this ambition,” said Jaak Aab at a press conference on Thursday, the transcript of which was posted on the government website on Friday. “Let’s say the developer’s plans were optimistic.”
Among the concerns cited by Aab were Finest Bay Area Development’s profitability and passenger projections.
Aab said when Finland and Estonia’s Ministries of Economy looked at possible passenger numbers for a proposed tunnel in 2018, data suggested around 12 million passengers annually, while Finest Bay Area Development was projecting 52 million passengers a year.
“At the moment, we simply cannot consider such overly-optimistic volumes of passengers and goods to be realistic,” Aab said, adding that the government also didn’t get sufficient clarifying details to several of its questions concerning the project.
Kustaa Valtonen, one of Finest Bay Development’s co-founders, said the company was surprised the Estonian minister chose to communicate through the media, and disputed the government’s characterization of the company’s data.
“We submitted our application for the NDSP (National Designated Spatial Plan) on December 1st 2018,” Valtonen told Eye on the Arctic.
“By Estonian law the government should have responded within 3 months. Instead exactly one year ago we received a long list of questions and we submitted a response of 1,500 pages. That included detail on the cargo and calculations. Cargo is about 20% of our tunnel business case. It is based on historical numbers and forecasts for the future — a very typical projection. It does show growth but not overly optimistic.
“Today the cargo between the countries is carried on the ferries on trucks. We believe the train will offer a much more environmentally sound solution.”
Estonia says it supports a tunnel project in principle, but prefers to pursue it through the public sector in collaboration with the Finnish government.
However, Finland’s Ministry of Transport and Communications, told Finland’s public broadcaster Yle News on Friday that no such project was in the works.
Finnish multi-millionaire entrepreneur Peter Vesterbacka, the marketing mastermind behind the Angry Birds mobile game before he went on to co-found Finest Bay Area Development with Valtonen, an angel investor, has seen the tunnel, a project he’s been working on since 2016, as one part of creating a new transport route between Europe and Asia that would eventually reach the Arctic Norwegian coast.
In March 2019, Finest Bay Area Development signed a memorandum of understanding for €15 billion euros in financing with China’s Touchstone Capital Partners to build the approximately 100-km tunnel that the company says would cut the two-hour ferry trip between Helsinki and Tallinn to approximately 20 minutes by undersea train.
Then in May 2019, Finest Bay Area Development signed a memorandum of understanding (MoU) with Sor-Varanger Utvikling, the public, Kirkenes-based business development company for the Arctic Norwegian municipality of Sor-Varanger, to study the feasibility of building an Arctic railway between the city of Rovaniemi, Finland and Kirkenes, Norway.
The tunnel and railway would transform the region into an economic and transportation hub, Vesterbacka said at the time.
Valtonen says that in regards to the tunnel initiative, Finest Bay Area Development’s perspective is that “the project continues as is.” But until that initiative is settled, the Arctic railway project is effectively on the back burner for the foreseeable future.
“Running one mega project at a time is quite a lot of work,” he said. “We do what we can to advance the Arctic railway, but it is slow.”
Write to Eilís Quinn at eilis.quinn(at)cbc.ca
Related stories from around the North:
Finland: The Arctic Railway – Building a future or destroying a culture?, Eye on the Arctic
Norway: Arctic shipments to Asia grow as LNG carriers shuttle to eastern markets, The Independent Barents Observer
Russia: Modernizing Arctic aviation infrastructure among recommendations at Russian meeting, Eye on the Arctic