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Apr 12, 2019,  by Allianz Partners Business Insights

World’s longest undersea rail link proposed between Finland and Estonia

Plans are in place to build an undersea rail link that would connect Helsinki (Finland) to Tallinn (Estonia) in just 30 minutes. At over 100 kilometres, it would be the longest such construction in the world and is expected to be operational by December 2024. The project, which has a 15 billion euro price tag, is the brainchild of Finnish entrepreneur Peter Vesterbacka, who made his name by creating the Angry Birds video game. A global private equity firm has agreed to provide a third of that amount to get the project up and running.

Fifteen billion euros is the estimated cost of an undersea high-speed rail link that would link the Finnish capital Helsinki to its Estonian counterpart Tallinn in just 30 minutes. The man behind the project is Peter Vesterbacka, the founder of FinEst Bay Area Development and the designer of the Angry Birds video game. Spanning 103 kilometres, the link would comprise two tunnels: one for freight and the other for passengers, as reported by the website Les Echos. The longest undersea rail link in the world, the project involves the construction of two artificial flower-shaped islands built from drill cuttings, situated off the coast at Helsinki and Tallinn and providing both ventilation and emergency exits.


Project backers


Vesterbacka’s FinEst Bay Area company have just signed a key agreement with the private equity firm Touchstone Capital Partners Ltd, which will provide a third of the 15 billion euros required to fund the project. The remaining two-thirds will come from other private investors, among them the Dubai-based construction company ARJ Holding, which is contributing 100 million euros.

Based in London, Touchstone has 30 investors, half of them international groups and the other half Chinese companies: “This tunnel represents a major commitment to the economic development of the area and Europe,” said Vesterbacka. “When Kustaa [Vesterbacka’s project partner Kustaa Valtonen] and I had the idea back in May 2016, we began looking for a way to make it happen. I went to Beijing for two months to study Chinese, and we spoke with the Chinese authorities about the idea of connecting Scandinavia to the Silk Road and extending the Belt and Road Initiative further than Moscow. The Chinese were receptive.” The entrepreneur also hopes to link Tallinn to Paris, Berlin and Warsaw and met with the French Minister of Transport last October to discuss those plans.


Shorter journey times


Serious consideration has already been given to the technical aspects of the project, with Scandinavian engineering firms Poyry and Ains signing an agreement with Vesterbacka and Valtonen in November 2017, while the company BTP Fira have done likewise. In terms of financing, the benchmark operators are Getlink (Channel Tunnel), Tallink (Baltic Sea ferry operator) and VR (Finland’s state railway).

FinEst Bay estimates that by 2030 an average of six trains an hour will use the link, equivalent to 22 million tons of freight and 51 million passengers a year. The cost of a single ticket for the half-hour journey from Helsinki to Tallinn would be 50 euros.


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