A recent study ordered by Peter Vesterbacka's Finest Bay Area and carried out by Finnish pollster Taloustutkimus concludes that the construction and operation until 2050 of the Helsinki-Tallinn undersea tunnel would add approximately €300 million to the two countries' economies, with €47 million expected to come Estonia's way, the daily Postimees reports.
Vesterbacka is one of the undersea tunnel's main champions. The Estonian government still question the validity of the plans and are seeking more answers.
Expert at Taloustutkimus Pasi Holm said that the tunnel will add €600 million or 2.5 percent to Estonian GDP a year during its construction from 2021-2025. The corresponding figures for Finland are €2.4 billion or 1.1 percent of GDP. Holm also said the project is subject to a multiplier effect of 1.8 times.
Additional revenue is expected from construction of the tunnel itself, residential and office buildings, new consumers, growing real estate prices and the creation of twin cities. Peter Vesterbacka believes both ends of the tunnel as well as artificial islands along the tunnel route will have a modern and, in some places, even a utopian living environment to attract new residents.
Vesterbacka's survey forecasts double the passenger figures compared to an earlier Fin-Est Link survey – Taloustutkimus estimates that tunnel trains will be used to make 52 million trips in 2040. Altogether 19 million trips would be made by commuters whom it would take an hour to get to work of which the train ride between the two cities would take 25 minutes.
Holm said that real estate prices and difference in cost of living could motivate some 20,000 Finns to move to Estonia but continue working in Finland. The study suggests a third of Estonians living and working in Finland would move back to Estonia but continue to work in Finland.
According to Finest Bay Area's plans, the tunnel train's annual pass would cost 2,499 euros, with a single ticket priced at €50.
Pasi Holm sees the greatest benefit in the fact of Tallinn and Helsinki becoming twin cities that is estimated to add 0.15 percent to the Estonian GDP and 0.1 percent to that of Finland annually.
Pasi based his study on the effects of the Oresund Bridge between Sweden and Denmark. The bridge linking Malmo to Copenhagen also created what are effectively twin cities and helped Malmo catch up to wealthier Copenhagen.
China's Touchstone Capital Partners and the tunnel developer Finest Bay Area Development, the leaders of which are Vesterbacka and businessman Kustaa Valtonen, at the beginning of March signed a €15 billion memorandum of understanding, according to which a third of the funding would be given as own capital and two thirds as a loan.
Touchstone would maintain a minority stake in the development company and will assume the obligation of giving a loan to the project. ARJ Holding, a Dubai fund, has previously also agreed to finance the tunnel in the amount of 100 million euros.
Vesterbacka wants to complete the tunnel by the end of 2024, but Estonian Minister of Public Administration Jaak Aab has said that this is not realistic.
However, Vesterbacka has confirmed that Chinese companies China Railway International Group (CRIG) and China Railway Engineering Company (CREC) have the technological capacity to complete the tunnel in 2 to 2.5 years.
Before that could happen, it is necessary for the Estonian government to initiate a national designated spatial plan. However, the state was of the opinion that the initial request did not contain enough information and has now requested clarification for the third time. It has been waiting for a response since July.
Editor: Helen Wright