The past weeks have brought positive news for our economy and our development more broadly. The European Commission has just introduced the focus of the next budgetary period, and one of its clear aims is to significantly increase investments in connections: Which also means twice as much money for the construction of the Rail Baltica high-speed link.

At a time when the state is searching high and low for additional revenues for the budget via additional taxes and fees, and analysts are proclaiming the slow green shoots of economic recovery, this without a doubt stellar news.

Nonetheless, with the progress of rail construction and the anticipation surrounding the local elections, there have also been voices calling the reasonableness of such investments into question. I must start off by saying that I belong to those who believe that economic growth is based, alongside many other factors such as boosting productivity or technological development, on maintaining and increasing investments, and not the opposite. Investments do not only have a one-time effect in the form of a cash injection, but also a much broader, benefit, as it is termed, to society as a whole.

Long-term impact of the investment

Let us first look at the costs, that is, how much Rail Baltica will cost us financially. According to current best knowledge, Estonia's share of the cost of the international railway connection is €3.1 billion. The EU is financing at least 70 percent of this at present, and Estonia's own contribution, taking that into account, would be around 30 percent, including funds obtained from the sale of CO2 emissions.

Among other things, this will be used to construct the largest rolling stock depot in the Baltics, for the maintenance of train sets operating on both Rail Baltic and the rest of Estonia's railways. This means that even if the European Parliament does not increase the size of the support, with EU funding continuing at roughly the current level, we will get a functioning railway for €800–900 million from the state budget, spread over more than 10 years in the context of the state budget. Let us recall that the revenue volume of the 2025 state budget is €17.7 billion and the expenditure volume is €18.2 billion.

This is the so-called cost side, part of which has already been spent on preparatory and construction work, while the other, larger component is planned to be directed to the construction market in the coming years. More than two billion euros will enter our economy, labor market and construction sector activation without spending a single cent of our own state's money, not to mention possible additional funding.

If we can analyze what can be obtained for three billion euros, then first, of course, it would be a modern international high-speed railway, which could start transporting our people and goods to and from Europe, from the year 2030. The second aspect, which tends to be overlooked but is equally important, is that the investment will flow back into the economy, consumption and development through Estonian companies. A little less has so far been said about the fact that construction contracts of such a large scale in Estonian terms will bring us the best competence, skills and knowledge from the European railway sector.

Cooperation with international top experts will in turn increase the competitiveness of our own construction companies, and participation in the Rail Baltica project will give them references with which they can later qualify in international markets.

Additional tax revenues to the budget

The entire Rail Baltic project will, during the construction period, bring back to our state budget almost as much in tax revenue, increase companies' turnovers and give jobs to thousands of people in the sector. The Centar research center has calculated that the construction-period impact of the railway connection in the years 2024–2030 will come to about €660 million in additional taxes alone for the Estonian economy, while companies' additional profit will be nearly €350 million.

If we add to this the nearly 6,000 jobs created in the peak years, as well as increased consumption and added value through the supply of goods and services, then in the construction phase alone we will have brought back to the Estonian state almost twice as much revenue as our own financial contribution to the project. This is purely a comparison of costs and revenues, which is in fact only half the calculation.

It is also important to analyze the entire socio-economic benefit during the period when the railway is in operation. One should not believe those who say that all freight transport on our rail infrastructure has already ended and that people have decided not to travel by rail anymore. Or even more so, that in the future their only means of transport will be car, bus and plane. The annually growing passenger numbers of Elron alone prove the exact opposite.

The number of rail-preference travelers will likely grow even more when new trains start running in various directions, timetables are made more frequent, and there is a more efficient connection with Riga and Vilnius on the existing railway, enabling significantly faster and more comfortable travel compared to the present. One must also consider the impact of improved traffic safety and saved lives, which is confirmed by statistics across Europe.

Life along the route will come alive

Undoubtedly, the modernity of the rolling stock will play a role too, ensuring speed, comfort and user-friendliness. I think that the soon-to-be-announced regional locomotive tender should already take into account that the same contract will allow for the purchase of trains in larger volumes, which would also adequately meet north–south demand, including after 2030.

Several municipalities are actively thinking about how to develop life in their area, with the arrival of local stops on Rail Baltica. This means decisions on housing development, preparations for creating industrial areas, and planning supporting infrastructure. Now is certainly the right time for this, and a great opportunity to share in the benefits arising from the investment.

In Estonia, construction contracts have already been signed for the entire Rail Baltica railway infrastructure intended for passenger trains, over a length of 200 kilometers. Construction will be underway on 105 kilometers by the end of this year. In other words, preparations are forging ahead rapidly, and the development of the local stops is still planned for completion by 2030.

It is possible that for people in Võru County, Põlva County or Ida-Viru County it is harder to understand what benefit they get from a railway that is located quite a way from them and will not be completed tomorrow, but five years from now. It is certainly my hope that the societal benefits, the expansion of travel options and the extra revenues brought in to the state budget will make such projects more familiar and comprehensible to people, wherever they live in Estonia.

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