The Baltic high-speed rail project is closer to being realised than ever. Representatives of Estonia, Latvia, Lithuania, Finland and Poland have reached an agreement during their recent meeting regarding the creation of Rail Baltica joint enterprise. It has been announced that the transport ministers of these five countries will sign the declaration initiating the project during an unofficial Transport Council gathering in Vilnius this September. The signing will be the kick off for the coordination of preparations for the upcoming rail construction, including the development of finance proposals for the European Commission and the project’s business plan, as well as other important activities.
The Rail Baltic project is described by the Latvian Ministry of Transport as:
“…[A] Trans-European railway Rail Baltica, linking Helsinki – Tallinn – Riga – Kaunas – Warsaw and continuing on to Berlin, is to be developed within the territories of the co-operating EU Member States. Rail Baltica will support the wider EU goals of parity of access to services and infrastructure of EU Member States and development of sustainable modes of transportation, improved balance and interoperability between different means of transportation and the establishment of links with the rest of the EU rail network. “
The construction of the railway will help to improve and assist in economic growth and integration of the Baltic States and its Western neighbours, as it promotes increasing trade and traffic. Experts have argued explained:
“While cross-sea ferry traffic in the Baltic Sea Region is growing fast, coast-parallel transport on sea or rail stagnate in contrast to rapidly growing road transport. Passenger railway services from Tallinn to Central/Western Europe ceased. Via Baltica, road and rail, is a priority in the TEN networks, with only road improvements progressing to date. Railway investments concentrate on East-West corridors and neglect the wanted integration within the widened EU.”
Following the announcement this week from the Transport Ministers of Latvia, Lithuania, Estonia, Finland and Poland, the European Commission transport commissioner Siim Kallas commented:
“I have received confirmation from Poland that they will complete their part. Finns are also very interested. It [Rail Baltica] is more realistic than ever before.”
Each of the Baltic states will own the infrastructure of Rail Baltica located on the territory of those countries. Each shareholder will allocate EUR 650 000 annually for the next couple of years. The joint enterprise will initially belong to the Baltic states. Finland and Poland could potentially gain ownership as well. It is estimated that Rail Baltica will cost Latvia EUR 1.27 billion. The costs for the three Baltic countries as a whole are estimated at EUR 3.68 billion. The European Commission could pay 85% of the total costs of this project. The request for funding is planned to be submitted to the EC in 2015 so that work can commence in 2016.
Lithuania was undecided about its involvement in the project, as many debated that taking part in the joint venture would be in violation of the Lithuanian Constitution. However, last week Lithuania announced that it had agreed to the proposal to set up a joint venture for developing Rail Baltica. Furthermore, Lithuanian Railways has now registered the trademark and logo of Rail Baltica under their auspices, in the Lithuanian trademark registry on 25 July.
The move sparked a wave of criticism and fears that Lithuania was taking over the project. The backlash prompted the Estonian Ministry of Economic Affairs to issue a statement, reassuring the public that the registration by Lithuania does not mean ownership or full control. Critics have argued that the Lithuanian government is being put under pressure by influential state railway corporation, Lithuanian Railways, which has fears that its business will be undercut by the emergence of Rail Baltica.
In fact, Lithuanian Railways is already building an pan-European railway section from the Polish border to the Lithuanian city of Kaunas. As a result of this project, Kaunas will potentially become a major logistics and distribution center, marking a halfway point between the Russian gauge and European gauge.