Finland launches €660m rail PPP

The Finnish National Rail Administration has published a tender for the country’s first rail public-private partnership (PPP) – the first of two PPPs to be tendered this year.

Finland: opening rail to the private sector

The rail project is looking for a private partner to build and operate a new, 79-kilometre double-track line between Kokkola and Ylvieska, to the north-east of Finaland, in addition to refurbishing any existing track along the route. The deal is estimated to cost a total of €660 million of which €263 million is capex.

The 20- to 30-year PPP will be backed by availability payments – a public contribution paid to the private partner in exchange for making the asset available in good condition. Interested parties are being invited to submit their requests to participate by November 8, according to the tender documentation.

Austrian developer Strabag is likely to be interested in bidding for the asset. Roland Jurecka, the head of the firm’s concessions unit, told Infrastructure Investor in  March that Strabag is “very keen on the Nordic market and [we] expect to become one of the major players in the region over the next couple of years”. A market source indicated that greenfield infrastructure fund Meridiam is also interested in the project.

A roadshow for the rail PPP will be held in Brussels on May 19 where the Finnish authorities also plan to unveil a road project to be tendered later this year.

The road deal plans to improve the existing motorway connection between Koskenkylä and Eagle, to the south of Finland, and is part of European Road 18. It is estimated to need capex of €285 million with the concession contract to last between 15 and 20 years.

Construction works are set to take place between 2011 and 2014 with a tender launch later this year. The E18 project, as it is known, will also be backed by availability payments.