A memorandum of understanding has been signed with three major Chinese contractors to build a railway tunnel approximately 90km under the Gulf of Finland to link Helsinki with Tallinn, capital of Estonia.
State-owned firms China Railway International Group (CRIG), its parent company China Railway Group (CREC), and China Communications Construction Company (CCCC) signed the agreement with the scheme’s Finnish developer, Finest Bay Area Development Oy (FEBAY) and its main funder, China’s Touchstone Capital Partners, which has agreed in principle to lend the scheme €15bn.
Building the undersea railway tunnel is expected to take six years and create 20,000 person-years of jobs in Finland and 6,000 person-years of jobs in Estonia, according to YLE.
The ambitious infrastructure project is estimated to cost a total of 15 billion euros. Finest Bay Area Development in February announced it has found an agreement on the funding with Touchstone Capital Partners, a private equity firm based in China.
“Touchstone has extensive experience of funding similar large private infrastructure projects,” commented Kustaa Valtonen, the other founding partner at Finest Bay Area Development.
The Finnish development company has also assured that no more than half of the funding will be derived from China. The rest of the funding will be obtained from pension insurance and infrastructure investors in Europe.
Vesterbacka said last year the objective of the project is to expedite the creation of a twin-city relationship between Helsinki and Tallinn. This, he explained, would increase the amount of space available for housing, bring experts on different sides of the gulf closer to one another and create an urban region larger than Amsterdam or Stockholm.