Swedbank: Rail Baltic construction to boost economy by up to 0.6 percent

Rail Baltic.
Rail Baltic. Source: Press materials.

The construction of Rail Baltic is seen to increase the gross domestic product of Estonia by 0.2 to 0.6 percent in the years 2022-2026, an estimate by Swedbank indicates.

Swedbank senior economist Liis Elmik said on Friday: "The construction of Rail Baltic will have a significant positive effect on our economy. Construction of the railway will give work to local construction companies even if the main contractors are large European companies. To date, mainly in the designing phase, foreign companies have taken three-quarters of the volume of the contracts of Rail Baltic."

The budget of Rail Baltic, almost €6 billion euros, equals 5 percent of the annual gross output of Baltic economies. It will be divided over several years, as according to current plans the construction of the railway will last 4-5 years, Elmik said.

Major construction work is expected to start in 2022 and end in 2026. The economist said that by that time the economy and the construction sector should already have more or less recovered from the economic crisis.

According to a preliminary design from the end of 2018, the construction volume of the portion of the railway situated in Estonia is €1.6 billion, which is half the construction volume of Estonia in 2019. The amount surpasses the volume of civil engineering works in Estonia last year by a factor of 1.6.

"In addition to the direct positive impact in the form of additional demand and jobs in the construction sector, the construction of the railway will bring new technology and know-how to the Baltics. Better connectivity of the region will improve the movement of goods and people, increase the region's competitiveness and productivity," Elmik said.

"A fast rail connection will enliven the labor market, tourism and the education landscape, as people will be able to move faster and more conveniently from place to place," the economist added.

In the planning of other major construction projects, the government should take into account the impact of Rail Baltic, as too rapid an increase in demand may result in overheating of construction and the building materials industry.  

"The main construction period of Rail Baltic will overlap with the next EU budgetary period  2021-2027, which previously has meant an acceleration in the establishment of infrastructure," Elmik said.

Rail Baltic will run from Tallinn, via Riga in Latvia and Kaunas in Lithuania to the Polish border.

Pärnu council initiates spatial plan procedure for Rail Baltic freight terminal

The council of the Pärnu has opened the procedure for the detailed spatial plan and conduct of environmental impact assessment for a service and maintenance center and freight terminal of Rail Baltic in the Pärnu area.

The freight terminal is meant for servicing freight trains of Rail Baltic. It will be possible to load goods from trains onto trucks, storage and sort goods at the facility.

The service and maintenance center for the Parnu area will serve as a base for technical support for Rail Baltic where special purpose trains will be stationed and out of which current maintenance of the infrastructure will be carried out. It will also include a warehouse for materials necessary for current maintenance, the city government said. 

The area of the freight terminal and the service and maintenance center is situated in the territory of the city of Parnu and the Tori rural municipality. The planning area in Parnu is located in the Niidu business area on the boundary of the city in the former Tammiste railway infrastructure area and near it. The bigger portion of the 130-hectare complex, or 101 hectares, will be situated in the territory of the city of Parnu. 

Access to the freight terminal and the service and maintenance center by vehicle is planned from Niidu Street. The prospective construction of Lauka Street as a transport street has been taken into account to ensure additional access and create a connection with Parnu's big bypass road in the future. For that the potential need for space for a road bridge or a tunnel across the main track of Rail Baltic has to be taken into account in the spatial plan. 

Access by rail will be solved by means of a separate track to be established at a plot situated immediately next to the main track that will connect the service and maintenance center to the main track of Rail Baltic.

A separate access track to the freight terminal will be built from the south to connect the complex with the Pärnu freight station. Up to six pairs of 1,435 mm tracks are planned for the area of the freight terminal to enable loadings between railroads of different track gauges. 


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Editor: Helen Wright

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