Rail Baltica will serve as an important catalyst of continued economic development of the Baltic States – both, in the construction phase, for example, by creating hundreds of new jobs and contributing to the region’s GDP through various direct, indirect and induced effects from infrastructure investments, as well as in the operational phase, for example, by enhancing Baltic market accessibility and trade competitiveness, boosting foreign investment attractiveness and fostering sustained productivity gains and increased competitiveness of the Baltic transport and logistics industry and beyond. Historically, availability of modern infrastructure has always been among the key determinants of the wealth and competitiveness of nations. High-speed* rail infrastructure is particularly prominent in this regard, boasting some of the highest levels of secondary economic benefits and macroeconomic multipliers among the different types of infrastructure investment.
*Rail Baltica is being implemented as a new fast conventional, double-track, European standard gauge (1435mm), electrified and ERTMS-equipped railway line with a design speed of 240km/h.
Rail Baltica will greatly shrink the distances within the Baltic States and vis-à-vis the rest of Europe. A modern high-speed rail connectivity shall provide a comfortable, safe and environmentally friendly alternative for passenger mobility, as well as new development opportunities for intermodal and multimodal supply chain management. The new railway infrastructure and its future commercialization shall serve as a platform for digitalization and innovation within the new paradigm of seamless intermodal connectivity, supply chain transparency and service integration and personalization. Baltic passengers will gain access to travel solutions of the level of quality, speed, comfort and passenger experience long enjoyed by our Western European peers, while freight owners and forwarders will be able to streamline and diversify their supply chain processes due to a direct and unimpeded high-capacity access to the European railway ecosystem.
Rail Baltica is not merely about building a physical railway line. Rather, the physical infrastructure shall serve as an enabler for the emergence of a whole new economic corridor. It will not only set in motion a powerful virtuous circle of transnational regional integration – vividly illustrated, for example, by the outstanding success of the Oresund fixed link infrastructure and its commercialization between Sweden and Denmark – but also integrate the Baltics in the new supply chains of regional, European and global significance.
Rail Baltica is already designed to become a part of the EU TEN-T North Sea – Baltic Core Network Corridor, which links Europe’s largest ports of Rotterdam, Hamburg and Antwerp – through the Netherlands, Belgium, Germany and Poland – with the three Baltic States, further connecting to Finland via the Gulf of Finland short sea shipping connections with a future fixed link possibility between Tallinn and Helsinki. Further northbound extension of this corridor shall pave the way for future connectivity also with the emerging Arctic corridor, especially in light of the lucrative prospects of the alternative Northern Circle maritime route development between Europe and Asia.
Furthermore, the North Sea – Baltic Corridor crosses with the Baltic-Adriatic Corridor in Warsaw, paving the way for new supply chain development between the Baltic and Adriatic seas, connecting the Baltics with the hitherto inadequately accessible Southern European markets. In a similar fashion, Rail Baltica shall strengthen the synergies between North-South and West-East freight flows, creating new transshipment and logistics development opportunities along the Europe and Asia overland trade routes. The new Rail Baltica infrastructure would, therefore, not only put the Baltics firmly on the European rail logistics map, but also create massive opportunities for value creation along this infrastructure with such secondary economic benefits as commercial property development, revitalization of dilapidated urban areas, private spin-off investment, new business formation, technology transfer and innovation, tourism development and other catalytic effects. Rail Baltica aims to promote these effects from the early stages of the project, learning from the key global success stories and benchmarks in this regard
During the design and construction phase, Rail Baltica will provide a significant boost to employment possibilities, especially in the construction sector, thereby contributing to the smoothing out of the business cycle by providing a timely upshift in labor demand in the current low-growth environment. Furthermore, it will help ameliorate the negative effects of the decline of employment opportunities in the traditional 1520mm railway system, by inducing the migration of railway professionals from the more traditional Baltic railway industry segments to the new European gauge railway ecosystem. This would, in the longer term, lead to the emergence of highly competent professionals with expertise of both railway systems. As the project enters the operational phase, new sustainable jobs will emerge in infrastructure management and maintenance, station and terminal management, as well as all types of passenger and freight operations. Rail Baltica implementation shall serve as a platform for the creation of a regional center of excellence and competence, accumulating best practice know-how and expertise from other large cross-border projects, promoting technological transfer and breeding innovation for the first time at such a scale in the Baltics and thereby developing internationally competitive expertise to be exported to other cross-border projects in the future.
On the macro level, Rail Baltica will greatly enhance the Baltic labor market connectivity. Job catchment areas, especially along the Rail Baltica route, will expand enabling new daily commute patterns between hitherto distant agglomerations. Labor mobility is a critical factor to improve the flexibility of the labor market and make it more resilient when facing economic downturns. In the same vein, multiple higher education institutions along the Rail Baltica will expand their student catchment areas by becoming more immediately and conveniently accessible.
21st century Europe faces many challenges posed by global warming, pollution and other environmental issues. Rail Baltica will reduce the environmental footprint of human mobility in the Baltic States. Railway is the only major transport mode that does not depend almost entirely on fossil fuels and its share of Europe’s transport energy consumption is less than 2% despite a market share of over 8.5%. Furthermore, by inducing a modal shift from road to rail – both for freight and passenger traffic – Rail Baltica will promote a significant reduction of the monetary effects from climate change due to economies of scale, as well as helping slash road maintenance cost and reduce noise pollution.
By integrating the region’s key transport infrastructure elements – ranging from sea ports and inland logistics facilities to airports and city terminals – into the Rail Baltica ecosystem, the project shall pave the way for the development of new intermodal and multimodal logistics solutions. Baltic States will not only strengthen the abilities to organize their trade with the rest of the European Union – accounting for three quarters of their total trade volume – at more favorable and competitive transportation rates, but also position themselves along the major European and global supply chains of today and future. Intermodality, high added value logistics services, digitalization and supply chain management skills will define the ability of the Baltic States to advance their role in the European division of labor in the field of transport and logistics. Rail Baltica will be an important asset and a source of competitive advantage in this regard. Containerized freight and piggyback transportation will gradually expand, as Baltic freight industries gradually diversify from the more traditional freight segments, especially, transshipment of dry and liquid bulk cargo. Muuga, Salaspils, Kaunas and other hotspot locations will be ideally placed to develop into platforms for assembly logistics and other high added value activities, also capable of supporting just-in-time processes in other industries.
On the passenger side, Rail Baltica route alignment foresees links to central business districts and airports ensuring a convenient connectivity for seamless future business travel. Leisure travel and tourism will also greatly benefit from such pan-Baltic connectivity. As future travel evolves to integrate different transport solutions in a single digitally controlled, fully traceable door-to-door package, the role of integrator hubs only strengthens – city terminals become multimodal hotspots, while airport rail stations become gateways for seamless air-to-rail connectivity. In this regard, Rail Baltica will provide a platform for the creation of such integrated passenger travel solutions that have never been available in the Baltic States before.
It is widely known and empirically proven that rail is among the safest modes of travel. In terms of accident fatality rates rail almost 30 times safer than private cars and almost 3 times safer than public buses, notwithstanding the relative differences in accident injury rates. Naturally, by promoting a modal shift from road to rail and thereby reducing the number and intensity of freight trucks on public roads, there would also be a positive impact on road safety. Given the speed advantages, Rail Baltica will also promote considerable travel time savings. Furthermore, compared to private car travel, where time is spent behind the wheel, or air travel, which involves a series of consecutive activities (airport access, check-in, security check, boarding/deplaning, city center access etc), high-speed trains travel seamlessly city center-to-center, often non-stop, allowing for an undisrupted productive travel time. As the cities along the Rail Baltic route develop, traffic intensities will climb proportionately. Rail Baltica will provide an alternative option for travel that avoids and simultaneously helps alleviate urban traffic congestion.
Although widely perceived as somewhat conservative, the European railway industry is very keen to accommodate disruptive technologies though digitalization and development of intelligent transport systems (ITS). Digitalization, alongside de-carbonization, is consistently among the European Union’s key strategic priorities in the development of European cross-border transport connectivity. Innovative technologies such as smart data analytics, Internet of Things / Internet of Trains, next generation communication networks (both track-side and onboard), passenger data applications, sensor deployment and smart energy, among many other, will increasingly permeate all aspects of railway design, construction, maintenance, operation and supply chain development processes. Rail Baltica will, therefore, provide a new impetus to the rapidly developing start-up enterprise ecosystem in the Baltic States, creating new opportunities and promoting digital innovation across all stages of the project.
In terms of transport infrastructure accessibility to the rest of the European Union, Baltic States are more akin to islands than continental locations. In the absence of high- speed highway and railway infrastructure, air connectivity is the dominant mode for passenger travel, especially business travel; while short sea shipping serves a sizable part of the freight flows. Baltic accessibility to the European single market is, therefore, incomplete. Rail Baltica intends to bridge this gap by eliminating the missing link and thereby restoring historical justice by re-integrating the Baltic into the European railway system. By fusing into the single European railway area, Baltic States will enhance their terms of trade and gain access to new export markets whose accessibility would be improved and made commercially viable due to the new logistics channels. It is with these key strategic considerations in mind that the European Union consistently lists Rail Baltica among its initiatives in the field of transport infrastructure development.
