Saturday

26th May 2018

Focus

Finland plans 'Arctic Corridor' linking China to Europe

  • The Arctic Circle plans involves transporting Chinese cargo through Finland by rail (Photo: Koppa/Flickr)

If it happens, it will be the shortest, most direct route for goods between Asia and Europe ever.

Spurred by China's massive Belt and Road Initiative, decision-makers in Finland and Norway are speeding up talks on a so-called Arctic Corridor.

  • Cargo ships from Asia will off-load in Kirkenes or elsewhere in northern Norway on the shores of the Arctic Ocean, saving thousands of nautical miles (Photo: Graphics: Arctic Corridor)

Cargo ships from Asia will off-load in Kirkenes or elsewhere in northern Norway on the shores of the Arctic Ocean, saving thousands of nautical miles as compared to the route through the Suez Canal.

The ships would pick up European exports while goods from Asia would travel on rail through Finland, through a tunnel to Estonia and from there reach central Europe in record time.

Two vital and so far lacking components - some 500km of rails from Norway to Finland's existing rails and a tunnel from Finland to Estonia - have frightened planners so far, but new prospects of Chinese funding are providing fresh impetus.

"We will publish a first feasibility study of the rail-link to the Arctic Ocean within a few days", Risto Murto, deputy director-general in the Networks Department of the Finnish ministry of transport and communications told EUobserver.

"When we think of the new corridors to China, we are in the middle between Europa and Asia. Finland is not an island anymore. We look at our geopolitical position in a whole new way."

Finland already consider itself Europe's air traffic gateway to China and Asia.

Helsinki Airport is closer to China than any other in the EU with only seven and a half hours flying time to Beijing.

The number of passengers flying from Helsinki to China grew 16 percent from 2016 to 2017.

The proposed Arctic Corridor will further link Finland to China as will a proposed new high-speed broadband cable from Finland to Asia through the Arctic Ocean.

Cinia, a Finnish IT-company 77.5 percent owned by the state, is heading efforts to establish the cable with Chinese and other foreign funding and the government in Helsinki is actively promoting the project.

World's longest tunnel

As for the tunnel from Helsinki to Tallinn, the capital of Estonia, the governments of Estonia and Finland two weeks ago published an EU-funded feasibility study of what promises to be the world's longest tunnel under the Bay of Finland. The bay is 80km wide.

Most days, some 20,000 people travel by ferry across this bay. This and other traffic make Helsinki the busiest passenger harbour in the world and the government and local business support the idea of a tunnel despite the somewhat staggering cost estimates of some €15bn.

Peter Vesterbacka, a Finnish business entrepreneur and inventor of Angry Birds, a mobile game gone global, now heads efforts to raise Chinese funding to cover the costs of the tunnel: "I expect that Chinese investors will cover two-thirds while northern European pension funds will probably cover most of the rest of the €15bn", he told EUobserver.

He expects that large property development schemes connected to the tunnel, including an artificial island in the Gulf of Finland, will provide investors with a viable business case.

He did not expect EU funding to play a role: "No, definitely not. We cannot wait for the rest of Europe to get their act together before we move on," he said. "We want to open the tunnel on 24 December 2024".

He would not name specific Chinese investors, but said talks were ongoing.

"We are looking in particular at Chinese organisations already financing the Belt and Road Initiative. In Kazakhstan new infrastructure to the tune of $50bn is being built as part of this initiative," he said at his Helsinki office at We+, a Chinese owned share-space office complex favoured by creative industry start-ups.

Close relations to China

Risto Murto of the Finnish ministry of transport and communication confirmed that the governments of Finland and Estonia are studying how they may act as enablers of Vesterbakke's efforts - basically forsaking earlier suggestions of a publicly-funded tunnel.

"There will not be two competing tunnel projects," Risto Murto said.

Finland already enjoys close relations with China.

In May 2017, Chinese president Xi Jinping stopped in Finland on his way to talks with US president Donald Trump in Florida in the US.

Two Chinese pandas on loan from China were released in Helsinki's zoo recently as part of China's "panda-diplomacy" and other signs of Chinese involvement are plenty, even in Finland's Arctic north. Here, Chinese funding have helped establish new large plants for production of bio-fuels and eco-friendly paper pulp as well as new tourism ventures.

Of the proposed new infrastructure to link Europe and China through Finland, the railway leading from existing railways in Finland to the Arctic Ocean are considered the least likely to materialise any time soon.

Murto of the ministry of transport and communication said construction was likely to begin in 2030 at the earliest, and that progress was dependent on, among other factors, unpredictable growth in international traffic on the Northern Sea Route from Europe along Russia's northern coasts to Asia.

Raw materials to China

Local interest in the new connections to Asia is growing.

Pauliina Pikkujamsa, head of marketing of BusinessOulu, a northern Finland business association, told EUobserver how "this would certainly be interesting from our perspective. It would bring large amounts of traffic our way and provide new export avenues for us to China. It would provide Finland with a whole new role between Asia and Europe."

Northern Finland has a long history of forestry and mining.

Local products include reinforced steel, paper, gold, lithium, uranium, vanadium, cobalt, zinc, nickel and other raw materials — most of which the local business community expect will sell well in Asia.

Norway defends new Arctic oil drilling

Norway's oil and gas is "extremely important" for Europe's energy supply, oil minister says, rejecting calls to stop drilling to prevent global warming.

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