Finland plans to invite private investors to join new railway projects that amount to at least 7.5 billion euros by 2030, the government said last Friday.
Finland, which until now has built its railway infrastructure with public funding, said it intended to reduce the need for public money on new railways by allowing private investment as a way of curbing government debt.
The government debt-to-GDP ratio has recently fallen below 60 percent as required by the European Union, but is seen rising again in the future amid an ageing population.
“It is clear that with budget funding we will not be able to carry out major, indispensable rail investments and that is why we need new means on investment,” traffic minister Anne Berner said in a statement.
A new state-owned holding company would retain majority ownership in the rail investments.
Berner said Finland plans to complete at least two major railway projects by 2030, one of them worth 5.5 billion euros ($6.3 billion) to connect its main Helsinki-Vantaa airport in the capital region directly with its third largest city Tampere.
Another major rail upgrade plan worth an estimated 2 billion euros would halve travel times to an hour between Helsinki and Finland’s former capital Turku on the west coast.
The third project, currently at an early stage, would connect the Helsinki-Vantaa airport directly with St. Petersburg in Russia.
The government’s decision to allow private investment in infrastructure follows an earlier move in 2017 to scrap the monopoly of state-owned company VR in passenger rail traffic, which will gradually open for competition by 2026.