Vladimir Arhipov: We'll get a mouse instead of an elephant with Rail Baltica

From 2030, Estonia may face huge annual costs to keep Rail Baltica running — costs so high they could force the creation of new taxes, writes Vladimir Arhipov.
For years, the Estonian public has been captivated by two grandiose hyperprojects promising fairy-tale success: the Tallinn-Helsinki tunnel and Rail Baltica, meant to connect the EU's periphery with its bustling central hub. The tunnel project — once billed as the construction of the century and intended to secure the functioning of the twin city of "Talsinki" — has, at least for now, been written off as science fiction and needlessly expensive.
The seductive promise of drilling a tunnel beneath the Baltic Sea by 2024, complete with an artificial island populated by 50,000 new residents, turned out to be a bluff. But Rail Baltica is a different story. The Ülemiste super terminal is soon to take shape and striking viaducts are rising in many locations along the planned route, intended to safely carry a railway line for ultra-fast trains. Rail Baltica will be completed by 2030, Ministry of Climate Deputy Secretary General Sander Salmu has confirmed.
We ought to be glad that at least one hyperproject is beginning to materialize, but looking past the ceremonial side of Rail Baltica raises questions. Will the €3.25 billion — awaiting disbursement through construction tenders — be spent wisely or are we tying a millstone around the country's neck with an expensive rail project that could ultimately drag us down for good?
Lossmaking railway
Though Rail Baltica's promotional figures promise Estonia a new lease on life, the current state of the country's rail infrastructure is far from praiseworthy and the outlook offers little cause for optimism. According to Ain Tatter, head of the roads and railways department at the Ministry of Climate, the ever-growing losses — amounting to tens of millions of euros annually — faced by Estonian Railways are an inevitable consequence of geopolitical conditions. Indeed, since 2013, when revenues from rail freight still covered infrastructure maintenance costs, freight volumes have plummeted dramatically.
To cover the costs of maintaining Estonia's railway infrastructure, 25 million tons of goods would need to be transported annually. Last year, the figure was just three million tons, resulting in a €35 million loss. It must be acknowledged that the days of 40-million-ton freight volumes and Estonian Railways paying dividends to the state are gone for good.
And yet, we are building Rail Baltica — despite knowing full well that it will never be economically self-sustaining. Freight traffic is not increasing and transporting passengers to Europe will never cover the costs, especially when faster air travel or comfortable buses are available as alternatives to bumping along in a train.
In truth, the so-called rail project of the century is already facing serious setbacks. A Ministry of Climate report admits that although the railway will be completed by the promised 2030 deadline — come hell or high water— it will be with significant compromises. Instead of the impressive double track originally planned, only a single track will be laid. In other words, only half the project is being realized. This is a clear case of a large-scale project being inevitably scaled back: of the required €3.25 billion, only €1.5 billion has been secured and there is no clear plan for how to cover the remaining €1.75 billion shortfall. Still, construction contracts worth €1.1 billion have already been signed.
Rail traffic control systems have also been significantly trimmed, with only 80 percent of the planned scope being implemented. Electrification will cover just 70 percent of the line, justified by the argument that a meager single-track railway doesn't require full electrification in the first stage.
Rail-related infrastructure will also operate under an austerity regime. Up to 13 planned viaducts will be scrapped, replaced instead by detours at other nearby crossings. This is a truly rotten decision, which in practice means that locals wanting to visit neighbors or shop at a store across the tracks will have to drive tens of kilometers out of their way. Passenger comfort is also being sacrificed. Of the 12 planned stops along the route, none will feature fully built-out station buildings and parking and landscaping will be reduced to a bare minimum.
While Estonia continues to dance around Rail Baltica at full speed — with 144 well-paid employees already involved in its implementation — Latvia remains silent. There are no funding decisions, no projects rushing toward execution.
As a result, by 2030, the so-called infrastructure of the century may only be usable for travel between Tallinn and Pärnu. Elron CEO Lauri Betlem claims that with five trains costing €75 million, service could be provided to Pärnu every hour and to Riga every two hours. How he envisions this remains unclear until we learn the truth about when or if the Latvian section of the line will even be completed.
It's equally unclear where the necessary number of passengers will come from to fill Rail Baltica express trains bound for Pärnu every hour. But that hardly seems to matter. It is becoming ever more apparent that the result of this noisy, much-hyped construction of the century will be not a mighty elephant, but a pitiful little mouse — and at the highest possible cost.
Massive burden on taxpayers
According to current estimates, by 2030 the state — meaning we as taxpayers — will have to cough up €50 million annually to cover Estonian Railways' losses. At the same time, there are no precise calculations for how much more money will need to be poured into completing the pared-down version of Rail Baltica, which, due to its different track gauge, will remain separate from the rest of the rail infrastructure. More importantly, there are no clear estimates of just how many hundreds of millions in taxpayer funds will be required every year to keep this megaproject running.
Where is that money supposed to come from? It's clear that there is no viable future for high-volume, revenue-generating freight transport on a single-track European-gauge line. And passenger traffic won't cover even a fraction of the operating costs — especially if ticket prices end up being several times higher than the cost of a plane ticket, in which case Rail Baltica's carriages will run completely empty. In short, only heavy subsidies will keep it afloat.
So we must accept that starting in 2030, we'll be saddled with a railway demanding massive annual sums — funds that will likely require the invention of new taxes. The real beneficiaries of this project are, without question, the construction companies that have secured lucrative contracts, and of course, the 144 people currently employed in the project's implementation — a figure that is expected to grow to 215 by 2030.
It is high time to stop pouring money into a railway we simply do not need. Instead, funds should be redirected toward modernizing our existing infrastructure. We should also take steps to improve the management of Estonian Railways and strengthen Elron's leadership, so that scheduled repairs are completed on time and promised timetable expansions to Tartu, Narva, Viljandi, Rapla and Aegviidu aren't pushed indefinitely into the future due to delays in rail maintenance.
At a time when essential sectors are facing cuts, insisting on pushing through a megaproject at any cost is simply reckless and foolish. There's still time to hit the brakes — before we end up throwing up our hands in despair, realizing there's no money left to tear up an unnecessary, idle rail line or to restore the landscape that was so needlessly torn apart.
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Editor: Marcus Turovski










