It’s Not Too Late for Baltic Countries to Make a Stop…

The Baltic triumvirate began to disintegrate

Changes in the political map of Europe as a result of European Union expansion require new approaches to socio-economic issues of territorial development.

At the beginning of the century the European Union, with the involvement of a row of international organisations such as the European Investment Bank, the Cohesion Fund and structured funds, decided to create a Trans-European Transport Network (ТЕN-Т). It was assumed that the basic principles of the network’s viability would be economic, transport and trade circumstances, the volume of existing and future freight and passenger traffic, and - only after those factors - political considerations.

In implementing this decision it was decided to include a project within the network, namely Rail Baltica: a railway line linking Tallinn-Riga-Kaunas-Warsaw. The idea of the Rail Baltica project is to replace the standard old railroad operating in the Baltic States since the time of the Russian Empire with a European railroad. The width of the railway gauge in Baltic States is 1520 cm as opposed to 1435 cm in Europe.

The desire of Baltic politicians to change the railway arose immediately after those states attained independence. However the budgets of the Baltic republics could not meet the significant cost of such an enterprise (approximately 10 billion euro). More concrete proposals emerged after the admission of Lithuania, Latvia and Estonia into the European Union. Those proposals were all submitted on condition that the European Union provide the core funding for the project. Brussels, however, was in no hurry. Even with the creation of TEN-T, not much changed. Brussels did not particularly want to allocate funds for an expensive railway project to member states that don’t always see eye to eye.

However, the rise of Russia on the international stage and the deterioration of her relations with the European Union on account of Ukraine highlight the political motivation of the railway project. In order to completely cut the Baltic States off from Russia, Russian trade and monetary flows, the EU has promised to finance 85% percent of the project. Brussels has decided to shoulder the major financial burden of the project, irrespective of its viability.

In the past 20 years the scheme of passenger traffic in the Baltic States has radically changed. In particular, passenger transport by rail (only 20% of all traffic) has decreased whilst the importance of aircraft and motor vehicles transportation has significantly increased. The role of maritime transport in passenger transportation has also increased. Existing railway companies are experiencing significant financial difficulties in passenger transport.

So far as cargo transportation is concerned, the main vector is clearly the West-East direction. This reflects the fact that two-thirds of Estonia and Latvia’s total volume of cargo goes to Russia, Ukraine and Belarus. The situation in Lithuania is roughly the same. Lithuanians also transport cargo by rail to Poland, but those volumes are insignificant.

The West-East transport vector is characterized by its transitory nature. In the European transport network the Lithuanian, Latvian and Estonian ports are end-of-the-line or dead-ends. The great majority of cargos carry over onto other modes of transport, predominantly rail, and travel east through Belarus and Russia. The list of main export-import goods transported between Russia and the Baltic ports speaks for itself: more than two thirds of the total volume of cargo is comprised of petroleum products and coal, with a substantial amount of mineral fertilizers, chemical products, metals, ores, and grains being transported.

With regard to the South-North direction, i.e., the direction that Rail Baltica will take and for trade with the EU by rail, its volume currently amounts to just a few percentage points.

In particular, the Lithuania to Poland transport stream comprises only 0.2 million tonnes per year. Generally, the total number of goods passing through the same area (via road transport) is also insignificant: a little over 15 million tonnes.

By contrast: the port of Klaipeda, exclusively serving rail transportation in the East-West direction, handles 35-36 million tonnes of cargo per year.

Given the economic circumstances, the idea of a complete separation of the Baltic from the Russian railways has been abandoned. Instead, attention will be focused on the construction of a highway to Helsinki and (in the south) to Warsaw (and possibly Berlin). The cost of building such a road: 4.35 billion euro (comparable with the construction of the “unfulfilled” Ignalina Nuclear Power Plant).

Many problems arose here too. In particular, in the original design the cargo terminal (goods station) for the move from one track to another was supposed to be built at the port of Muuga (northern Estonia). The annual volume of traffic was supposed to be 13 million tonnes.

Vilnius, however, decided to overtake its neighbours and independently commenced the construction of a goods terminal on the Polish border at Motskave. One can understand the Lithuanians: they have a strong impetus to develop the infrastructure of their backward south-east region. In this case, however, the Estonian economy suffers. Estonia becomes a transit country, without receiving other income. A scandal ensued, influencing the timing of the highway construction. This strengthened Lithuania’s desire to change the Rail Baltica route so that it would pass through Vilnius, increasing the cost of the project as a result.

In the circumstances, the Estonian side was pleased to respond to Russian Railways’ proposal for the reconstruction of the existing broad gauge, which to a large degree accords with Estonian interests. The same offer was made to Latvia - not without success, apparently. The Baltic triumvirate began to disintegrate. However, their EU membership forced the leaders of those states to voice support for the planned project.

The financial impact of changes to the project has not yet been calculated. The Lithuanians hope for changes to the routes running from the East from Russia through the terminal at Motskave. However, they must take into consideration Russia’s existing wide track with a terminal in the centre of Europe (in the Czech Republic) and the very questionable desirability for Russia of redirecting its cargo traffic along a detour route. And then there’s the political situation, especially if we take into account that the initial political motivation of the Rail Baltica project is hostile to our country.

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