Finnish entrepreneur Peter Vesterbacka, who has been planning an undersea tunnel connecting the capital cities of Helsinki and Tallinn, announced on Tuesday that he intends to sign a letter of intent with major Chinese construction company China Railway Group Limited (CREC) this week.
"This week, we will sign a letter of intent with Chinese firm CREC, which is the world's biggest construction company," Finnish public broadcaster Yle reported Vesterbacka as saying. According to the Finnish businessman, the Chinese company, which specializes in railroad projects and possesses expertise in underground drilling, has the expertise needed to carry out large-scale tunnel projects.
CREC has drilled and built more than 18,000 kilometers of railway tunnels in China.
According to Vesterbacka's firm Finest Bay Area Development, construction on the Tallinn-Helsinki tunnel would take six years to complete and would involve 20,000 people per year.
Market research firm Taloustutkimus head researcher Pasi Holm confirmed the same, stating that construction of the major undersea tunnel could mean some 20,000 jobs in Finland and another 6,000 jobs in Estonia.
Vesterbacka wants the tunnel to be operational by the end of 2024. "The letter of intent with the Chinese construction giant is remarkable, since the project can progress within the planned timetable," he said.
He has already previously signed an agreement with Chinese investors interested in backing the construction of the tunnel. He noted, however, that China would not have a decision-making role in the project, despite the fact that both the investment and construction firms are based in China. Investors from Nordic and European countries are also expected to contribute to the project.
In addition to Vesterbacka's plans, the Finnish and Estonian governments are also investigating the possibility of building a tunnel connecting the two capital cities, but the possible financing thereof remains totally unclear.
Ministries have doubts about Vesterbacka's plans
In order to move forward with the tunnel project, a national designated spatial plan must be launched in Estonia, a process which would be led by Minister of Public Administration Jaak Aab (Centre).
According to Aab, most relevant ministries have already acquainted themselves with the documentation submitted by Finest Bay Area Development and provided their own assessments of the developer's plns.
"It can be seen in the letters of some ministries that additional information is wanted from the developer," he said. "Once all the letters have been received, we can decide whether we will request additional information or whether the discussion will be sent to the government cabinet to see whether all prerequisites are fulfilled for the launching of a national designated spatial plan. At the moment, a concrete decision has not yet been made."
The minister noted, however, that some ministries believe there are some gaps in the data submitted by the developer.
"One of the primary things is profitability," he highlighted. "In launching a big project like this, with such environmental impacts, risks must be assessed including what would happen if the project is left unfinished or it is insufficiently financed. Also, how extensive environmental impacts will be. While the tunnel will go through granite in Finland, in Estonia things won't be so simple, which means that environmental impacts will be greater."
The minister also believed that Vesterbacka's stated goal of bringing the railway tunnel online by Christmas 2024 doesn't seem very realistic.
"It doesn't seem particularly realistic, if I'm being honest, because the national designated spatial plan process alone is very lengthy," Aab said. "It is likely that the planning and construction stages will be longer than Peter Vesterbacka has claimed."
As the construction of an undersea railway tunnel between Estonia and Finland is an international project with extensive environmental impact, Estonian law does not allow for any other path forward than the launch of a national designated spatial plan, Aab said.
The project on the Finnish side, meanwhile, will not require one.
Editor: Aili Vahtla