The Economist: bickering among Baltic countries hampers implementation of Rail Baltica

The Economist: bickering among Baltic countries hampers implementation of Rail Baltica

BC, Riga, 23.10.2013.

http://www.baltic-course.com/eng/transport/&doc=82467

Although the Rail Baltica project is of major importance for the Baltic countries' integration in Europe and reducing Russia's influence on the Baltics, the implementation of the project has been hampered by bickering among Latvia, Lithuania and Estonia, as well as opposition from railroad monopolies that are closely associated with Russian railroads, LETA reports, referring to The Economist.

"The 600 kilometer-long human chain that stretched from Vilnius via Riga to Tallinn in August 1989 came to be the emblem of the Baltic states' struggle for freedom from the Soviet Union. But more than two decades after they regained independence, their three capitals have no direct passenger train service linking them to each other, let alone to the rest of the European Union," says an article titled "On the Baltic Slow Train", printed the magazine.

In terms of infrastructure the Baltics are still "captive nations": the railroads run east to Moscow and St Petersburg, the electricity grids are synchronized with Russia's, and they are largely dependent on Russia for gas, writes the magazine.

Thus it was heavily symbolic last week when the European Commission laid on the first proper inter-Baltic passenger train since the 1990s. "Packed with Eurocrats and transport-industry folk, it rumbled for the best part of two days through birch and pine forests, greeted at every stop with music and speeches," says the article, noting that it was a foretaste of the Rail Baltica project, a modern fast railroad that would cut the journey to about four hours.

By switching from Russia's 1,520 millimeter gauge to continental Europe's 1,435 millimeter one, the new railroad would offer a sense of security, a step away from Russia and closer to Europe.

This is the kind of project where the EU can add value, integrating poorer countries into the industrial heart of Europe and building missing links that national governments are unwilling or unable to finance, says The Economist.

The EU's Transport Commissioner, Siim Kallas, himself an Estonian, dreams of fast train services from Tallinn all the way to Berlin.

Kallas wants to concentrate on nine pan-European corridors to create an integrated network of railroads, waterways and seaports that is greater than the sum of its parts. Rail Baltica would be a section of a corridor running from Finland to the Dutch and Belgian ports.

Although it has been on the drawing board since 1994, Rail Baltica remains uncertain.

"Big infrastructure projects often move slowly. The economic crisis means that money has been scarce, particularly in the Baltics. And it is only from 2014, when the EU transport budget will be tripled, that the commission will get the big money for the project," notes The Economist.

But the biggest reason for delay is chronic bickering among the Baltic countries, indicates the magazine.

"The unity of the human chain has, since independence, often given way to rivalry. This is apparent beyond railways: a plan for a joint nuclear power station in Lithuania has come to a standstill. The idea of creating an integrated regional gas network to reduce dependence on Russia is fading as the three countries develop separate liquefied natural gas facilities. The former joint Baltic battalion has been disbanded, and the Baltic countries are squabbling over hosting NATO's regional air-policing mission. As for Rail Baltica, even the name is disputed: Estonia calls it "Rail Baltic"; the commission tactfully referred to its show train as the RB Express," says the magazine.

Finland and Estonia, farthest from Europe's core, are keenest on the project. For a time Latvia raised objections, partly because early proposals appeared to bypass Riga and lacked interconnections with air- and seaports. With these problems settled, it is now Lithuania, which holds the rotating EU presidency, that is accused of dragging its feet. Officials say it has only grudgingly agreed to a joint venture with Latvia and Estonia to build the railway, arguing that it would be unconstitutional for a foreign entity to control its railways.

Lithuania insists it has no misgivings, it has already started to upgrade part of its line to Poland to take European-standard trains. Critics say this is only a dual-gauge track on its existing slow line, Rail Baltica needs its own line to improve speed.

"What is strangest about the affair is that Rail Baltica is almost a gift-horse. The EU is proposing to pay up to 85% of the estimated cost of EUR 3.7 billion, and will no doubt offer soft loans for much of the rest," emphasizes The Economist.

The underlying problem, say many, is that some of the region's monopoly train operators are intimately bound with Russia's, and make their profits from the transit of freight between the Baltic ports and Russia, Central Asia and China. Better to improve the east-west line and build a new motorway, some argue, than commit to an expensive and uncertain north-south rail project.

The Baltic States lack the population to justify advanced high-speed lines, with trains travelling at more than 300 kilometers per hour. Instead, Rail Baltica would run at a maximum of 240 kilometers per hour, and would depend on slower-moving freight to make it pay.

The latest feasibility study finds that the project is "generally viable", although, on current traffic, the economic case is not clear-cut. Boosters say the line's existence would, of itself, attract new traffic.

"Shipping in the Baltic will become more expensive from 2015 because of new sulfur-emission rules, European manufacturing is shifting eastward, China might send more freight to Europe by transcontinental rail, the melting of the ice-caps might open the Arctic sea-route – Asian goods could be unloaded in northern Finland and sent south by train, ferry and Rail Baltica," experts predict.

Even a borderline infrastructure project can be justified on the ground that it boosts growth and competitiveness in a fast-growing region. As a question of fairness, Europe's poorer eastern periphery needs better integration into the single market.

"And then there is the issue of security. Russia is waging a trade war to try to discourage its neighbors, above all Ukraine, from signing new trade and association agreements with the EU. One casualty is Lithuania, which has just had its dairy products banned by Russia, supposedly on health grounds. No assessment can ignore geopolitics. The growling Russian bear is making the strongest possible argument for Rail Baltica," concludes The Economist.