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115-595: Rail Baltica will add the first large-scale mainline standard gauge railway in the area. Legacy rail networks in Finland , Estonia , Latvia and Lithuania are mainly in Russian gauge (1,520 mm). These countries' first railways were built in the second half of the 19th century while part of the Russian Empire . While some railways were built or converted to narrow or standard gauge between World War I and World War II in

230-555: A rail link to Lapland in northern Finland, via Kemijärvi or Kolari , from the Norwegian port of Kirkenes are in the planning stages. However, environmental and cultural sensitivities exist which affect these plans, with concerns from the indigenous Sámi people that the proposed line would pass through reindeer grazing lands. In 2022 the European Union proposed for all new rail lines to be constructed to standard gauge and for

345-419: A utilitarian perspective. Assuming an accurate CBA, changing the status quo by implementing the alternative with the lowest cost–benefit ratio can improve Pareto efficiency . Although CBA can offer an informed estimate of the best alternative, a perfect appraisal of all present and future costs and benefits is difficult; perfection, in economic efficiency and social welfare, is not guaranteed. The value of

460-678: A common temporal footing, using time value of money calculations. This is often done by converting the future expected streams of costs ( C {\displaystyle C} ) and benefits ( B {\displaystyle B} ) into a present value amount with a discount rate ( r {\displaystyle r} ) and the net present value defined as: NPV = ∑ t = 0 ∞ B t − C t ( 1 + r ) t {\displaystyle {\text{NPV}}=\sum _{t=0}^{\infty }{B_{t}-C_{t} \over {(1+r)^{t}}}} The selection of

575-462: A cost–benefit analysis depends on the accuracy of the individual cost and benefit estimates. Comparative studies indicate that such estimates are often flawed, preventing improvements in Pareto and Kaldor–Hicks efficiency . Interest groups may attempt to include (or exclude) significant costs in an analysis to influence its outcome. The concept of CBA dates back to an 1848 article by Jules Dupuit , and

690-417: A discount rate for this calculation is subjective. A smaller rate values the current generation and future generations equally. Larger rates (a market rate of return, for example) reflects human present bias or hyperbolic discounting : valuing money which they will receive in the near future more than money they will receive in the distant future. Empirical studies suggest that people discount future benefits in

805-402: A financial value to the life. However, non-monetary metrics have limited usefulness for evaluating policies with substantially different outcomes. Other benefits may also accrue from a policy, and metrics such as cost per life saved may lead to a substantially different ranking of alternatives than CBA.In some cases, in addition to changing the benefit indicator, the cost-benefit analysis strategy

920-472: A greenfield project will cause too much damage to nature and does not essentially improve travel possibilities. On 8 June 2017, Priit Humal, Karli Lambot , Illimar Paul, and Raul Vibo, experts on logistics and engineering, published a critical analysis of the Rail Baltica cost-benefit analysis made by Ernst & Young , claiming that €4.1 billion of the stated socio-economic benefits are faulty and therefore

1035-425: A higher weight. One reason for this is that for high income people, one monetary unit is worth less relative to low income people, so they are more willing to give up one unit in order to make a change that is favourable for them. This means that there is no symmetry in agents, i.e. some people benefit more from the same absolute monetary benefit. Any welfare change, no matter positive or negative, affects people with

1150-470: A lower income stronger than people with a higher income, even if the exact monetary impacts are identical. This is more than just a challenge to the distribution of benefits in CBA, it is a critique of the ability of CBA to accurately measure benefits as, according to this critique, using unweighted absolute willingness to pay overstates the costs and benefits to the wealthy, and understates those costs and benefits to

1265-562: A monopoly on passenger transport. In Helsinki local traffic, class Sm5 EMUs are owned by Pääkaupunkiseudun Junakalusto Oy  [ fi ] , but are operated by VR. While private rail operators can transport freight since 2007, most trains are still run by VR. Ratarahti Oy  [ fi ] was granted its safety certificate by the Finnish Transport Safety Agency in September 2011 and it will start shunting work at

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1380-419: A number of drawbacks and limitations. A number of critical arguments have been put forward in response. That include concerns about measuring the distribution of costs and benefits, discounting the costs and benefits to future generations, and accounting for the diminishing marginal utility of income. in addition, relying solely on cost-benefit analysis may lead to neglecting the multifaceted value factors of

1495-460: A policy is inexact at best. Surveys (stated preferences) or market behavior ( revealed preferences ) are often used to estimate compensation associated with a policy. Stated preferences are a direct way of assessing willingness to pay for an environmental feature, for example. Survey respondents often misreport their true preferences, however, and market behavior does not provide information about important non-market welfare impacts. Revealed preference

1610-670: A project. CBA has been criticized in some disciplines as it relies on the Kaldor-Hicks criterion which does not take into account distributional issues. This means, that positive net-benefits are decisive, independent of who benefits and who loses when a certain policy or project is put into place. Phaneuf and Requate phrased it as follows "CBA today relies on the Kaldor-Hicks criteria to make statements about efficiency without addressing issues of income distribution. This has allowed economists to stay silent on issues of equity, while focusing on

1725-414: A theoretical foundation on the societal worth or benefit of a project. The cost of the project proved much simpler to calculate. Simply taking the sum of the materials and labor, in addition to the maintenance afterward, would give one the cost. Now, the costs and benefits of the project could be accurately analyzed, and an informed decision could be made. The Corps of Engineers initiated the use of CBA in

1840-411: A total track length of 9,216 km (5,727 mi). The railways are built with a broad 1,524 mm ( 5 ft ) track gauge, of which 3,249 km (2,019 mi) is electrified. Passenger trains are operated by the state-owned enterprise VR that runs services on 7,225 km (4,489 mi) of track. These services cover all major cities and many rural areas, though the coverage is less than

1955-618: A variety of software tools, including HERS, BCA.Net, StatBenCost, Cal-BC, and TREDIS . Guides are available from the Federal Highway Administration , Federal Aviation Administration , Minnesota Department of Transportation , California Department of Transportation (Caltrans), and the Transportation Research Board 's Transportation Economics Committee. In health economics , CBA may be an inadequate measure because willingness-to-pay methods of determining

2070-405: A way similar to these calculations. The choice makes a large difference in assessing interventions with long-term effects. An example is the equity premium puzzle , which suggests that long-term returns on equities may be higher than they should be after controlling for risk and uncertainty. If so, market rates of return should not be used to determine the discount rate because they would undervalue

2185-411: Is 249 km/h (155 mph) for passenger trains, while the maximum operational speed will be 234 km/h (145 mph). For freight trains, the maximum design speed is 120 km/h (75 mph). The new railway line will be designed with a 1,435 mm ( 4 ft  8 + 1 ⁄ 2  in ) gauge. Other key technical parameters include: The network's parameters are in accordance with

2300-482: Is a direct correspondence between the form of a maximum entropy distribution and the exponential family . Examples of commonly used continuous maximum entropy distributions in simulations include: The increased use of CBA in the US regulatory process is often associated with President Ronald Reagan 's administration. Although CBA in US policy-making dates back several decades, Reagan's Executive Order 12291 mandated its use in

2415-568: Is an indirect approach to individual willingness to pay. People make market choices of items with different environmental characteristics, for example, revealing the value placed on environmental factors. The value of human life is controversial when assessing road-safety measures or life-saving medicines. Controversy can sometimes be avoided by using the related technique of cost–utility analysis, in which benefits are expressed in non-monetary units such as quality-adjusted life years . Road safety can be measured in cost per life saved, without assigning

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2530-718: Is directly abandoned as a measure. In the 1980s, to ensure workers' safety, the US Supreme Court made an important decision to abandon the consideration of return on investment and instead seek the lowest cost-benefit to meet specific standards. Another metric is valuing the environment, which in the 21st century is typically assessed by valuing ecosystem services to humans (such as air and water quality and pollution ). Monetary values may also be assigned to other intangible effects such as business reputation, market penetration, or long-term enterprise strategy alignment. CBA generally attempts to put all relevant costs and benefits on

2645-657: Is financed by the member states, the European Union TEN-T budget, and the Structural and Cohesion Funds provided to the EU New Member States. By the start of 2018, the three Baltic States and RB Rail AS had received two grants totaling €765 million designed under the CEF for the construction of the Rail Baltica railway. On 13 July 2018, a third grant agreement was signed for an additional €130 million, of which €110 million

2760-449: Is governed by OMB Circular A-4 . CBA attempts to measure the positive or negative consequences of a project. A similar approach is used in the environmental analysis of total economic value . Both costs and benefits can be diverse. Costs tend to be most thoroughly represented in cost–benefit analyses due to relatively-abundant market data. The net benefits of a project may incorporate cost savings, public willingness to pay (implying that

2875-556: Is less laborious and time-consuming, since it does not involve the monetization of outcomes (which can be difficult in some cases). It has been argued that if modern cost–benefit analyses had been applied to decisions such as whether to mandate the removal of lead from gasoline, block the construction of two proposed dams just above and below the Grand Canyon on the Colorado River , and regulate workers' exposure to vinyl chloride ,

2990-688: Is not managed by the Finnish Transport Authority but by the railway owner. Several museum railways exist that are unrelated to VR Group. While some private Finnish railways were electrified already at the end of the 19th century, work on the electrification of the main rail network started only in the late 1960s. Most main lines are now electrified. The system used is 25 kV 50 Hz AC overhead wiring , with wire height normal at 6.5 m (21 ft) and varying from 5.6 m (18 ft) beyond 6.5 m (21 ft) to 7.3 m (24 ft). The largest class of electric locomotives are

3105-503: Is often used by organizations to appraise the desirability of a given policy. It is an analysis of the expected balance of benefits and costs, including an account of any alternatives and the status quo . CBA helps predict whether the benefits of a policy outweigh its costs (and by how much), relative to other alternatives. This allows the ranking of alternative policies in terms of a cost–benefit ratio. Generally, accurate cost–benefit analysis identifies choices which increase welfare from

3220-484: Is ongoing as of July 2023. Talks with NGOs in Riga were started to discuss technical solutions within the city, especially for infrastructure elements such as crossings and overpasses. The Russian invasion of Ukraine has raised the importance of this European project, because of the connectivity across Europe that it will create, for civilian and military travel. Lithuania has a new commission to speed construction within

3335-516: Is possible to use different methods. One is to use weights, and there are a number of different approaches for calculating these weights. Often, a Bergson- Samuelson social welfare function is used and weights are calculated according to the willingness-to-pay of people. Another method is to use percentage willingness to pay, where willingness to pay is measured as a percentage of total income or wealth to control for income. These methods would also help to address distributional concerns raised by

3450-546: Is set to be upgraded to ERTMS / ETCS in the upcoming years, however later than in other European countries due to the low age of the current train protection system. The first ETCS units are set to be installed in rolling stock during 2013, and the first ERTMS signalled portion of track should be opened between 2019 and 2025. The current standard platform height is 550 mm (21.7 in) in Helsinki/Turku urban areas. Platforms that do not serve commuter trains are built to

3565-743: Is the support set of a probability density function f ( x ) {\displaystyle f(x)} . Suppose that we impose a series of constraints that must be satisfied: where the last equality is a series of moment conditions. Maximizing the entropy with these constraints leads to the functional : J = max f ∫ S ( − f log ⁡ f + λ 0 f + ∑ i = 1 m λ i r i f ) d x {\displaystyle J=\max _{f}\;\int _{\mathcal {S}}\left(-f\log f+\lambda _{0}f+\sum _{i=1}^{m}\lambda _{i}r_{i}f\right)dx} where

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3680-622: Is to make use of the principle of maximum entropy , which states that the distribution with the best representation of current knowledge is the one with the largest entropy - defined for continuous distributions as: H ( X ) = E [ − log ⁡ f ( X ) ] = − ∫ S f ( x ) log ⁡ f ( x ) d x {\displaystyle H(X)=\mathbb {E} \left[-\log f(X)\right]=-\int _{\mathcal {S}}f(x)\log f(x)dx} where S {\displaystyle {\mathcal {S}}}

3795-414: The β i {\displaystyle \beta _{i}} terms correspond to the factor loadings. A generalization of these methods can be found in arbitrage pricing theory , which allows for an arbitrary number of risk premiums in the calculation of the required return. Risk associated with project outcomes is usually handled with probability theory . Although it can be factored into

3910-522: The λ i {\displaystyle \lambda _{i}} are Lagrange multipliers . Maximizing this functional leads to the form of a maximum entropy distribution: f ( x ) = exp ⁡ [ λ 0 − 1 + ∑ i = 1 m λ i r i ( x ) ] {\displaystyle f(x)=\exp \left[\lambda _{0}-1+\sum _{i=1}^{m}\lambda _{i}r_{i}(x)\right]} There

4025-522: The Clinton administration during the 1990s. Clinton furthered the anti-regulatory environment with his Executive Order 12866 . The order changed some of Reagan's language, requiring benefits to justify (rather than exceeding) costs and adding "reduction of discrimination or bias" as a benefit to be analyzed. Criticisms of CBA (including uncertainty valuations, discounting future values, and the calculation of risk) were used to argue that it should play no part in

4140-1072: The Fama-French model : r = r f ⏟ Risk-Free Rate + β M [ E ( r M ) − r f ] ⏟ Market Risk + β S M B [ E ( r S ) − E ( r B ) ] ⏟ Size Factor + β H M L [ E ( r H ) − E ( r L ) ] ⏟ Value Factor {\displaystyle r=\underbrace {r_{f}} _{\text{Risk-Free Rate}}+\beta _{M}\underbrace {\left[\mathbb {E} (r_{M})-r_{f}\right]} _{\text{Market Risk}}+\beta _{SMB}\underbrace {\left[\mathbb {E} (r_{S})-\mathbb {E} (r_{B})\right]} _{\text{Size Factor}}+\beta _{HML}\underbrace {\left[\mathbb {E} (r_{H})-\mathbb {E} (r_{L})\right]} _{\text{Value Factor}}} where

4255-830: The Finnish Main Line ) was opened on January 31, 1862. As Finland was then the Grand Duchy of Finland , an autonomous state that was ruled by the Imperial Russia , railways were built to the broad 1,524 mm ( 5 ft ), that was used also in Imperial Russia back then. An extension from Riihimäki to the new Finland Station in Saint Petersburg was opened in 1870. However, the Finnish and Russian rail systems remained unconnected until 1912. Russian trains could not have used

4370-469: The Gordon–Loeb model for decisions concerning cybersecurity investments). CBA's application to broader public policy began with the work of Otto Eckstein , who laid out a welfare economics foundation for CBA and its application to water-resource development in 1958. It was applied in the US to water quality, recreational travel, and land conservation during the 1960s, and the concept of option value

4485-777: The Imatra rail yard in 2013, with first test runs on 5 December 2012. Fenniarail Oy received its safety certificate in May 2011 and has started using used locomotives from Czech Republic, which were converted to the Finnish gauge of 1524mm , and started operation in July 2016. One private railway company exists in Finland, the Karhula–Sunila railway  [ fi ] , a short branch line with freight traffic only, in Karhula , near Kotka . The branch line

4600-511: The Monte Carlo method . However, even a low parameter of uncertainty does not guarantee the success of a project. Suppose that we have sources of uncertainty in a CBA that are best treated with the Monte Carlo method, and the distributions describing uncertainty are all continuous. How do we go about choosing the appropriate distribution to represent the sources of uncertainty? One popular method

4715-763: The Sr1 locomotives that were taken into use in 1973. They are now supplemented by the Sr2 - and Sr3 -class electric locomotives and the high-speed Sm3 Pendolino units. The first electric trains started to operate on 26 January 1969 in Helsinki local traffic, initially between Helsinki and Kirkkonummi and slowly extending to Riihimäki on 31 January 1972. Heading northwards, the electric wires reached Seinäjoki in 1975, Kokkola in 1981, Oulu in 1983, Rovaniemi in 2004, and their current northernmost point in Kemijärvi in 2014. In addition to

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4830-705: The 1970s the Finnish Transport Agency has been discussing the possibility of building a Helsinki–Turku high-speed railway , allowing for a faster journey time between the two cities. The Orpo Cabinet has decided to fund the segments from Turku to Salo as well as from Helsinki to Lohja , with the remaining segment between Lohja and Salo to be completed later. The planned Itärata (East Rail) would link Helsinki and Kouvola via Porvoo , shortening journey times to eastern Finnish cities such as Kuopio and Joensuu . More direct lines from Helsinki to Pori and Jyväskylä have also been studied. Proposals for

4945-665: The EU Technical Specifications for Interoperability (TSI – P2, F1). The design phase began in 2016, with design activities at the Riga Central Passenger Station and the Riga International Airport passenger station in Latvia to be continued until 2023. Meanwhile, the construction of the Rail Baltica infrastructure started in 2019, the first operations should start on some of the sections by 2028 and

5060-456: The EU's Sixth Framework Programme , reviewed transport appraisal guidance of EU member states and found significant national differences. HEATCO aimed to develop guidelines to harmonise transport appraisal practice across the EU. Transport Canada promoted CBA for major transport investments with the 1994 publication of its guidebook. US federal and state transport departments commonly apply CBA with

5175-602: The Finnish State Railways to Russian Railways . Following Finnish independence, the Russian part of the line was handed over to Russia. All rail connections with Russia ceased in March 2022 following the Russian invasion of Ukraine . Track doubling projects are taking place in various sections of the Finnish rail network. Following a previous project to double the single-line sections of railway from Seinäjoki to Oulu which

5290-556: The Finnish rail network due to a narrower load gauge . Later the Finnish load gauge was widened to match the Russian load gauge, with hundreds of station platforms or tracks moved further apart from each other. Further expansion occurred in the 1800s and by 1900 much of the network had been constructed with 3,300 km of track built. The Finland Railway Bridge across the River Neva in Saint Petersburg, opened in 1912, connected

5405-500: The Kaldor-Hick criterion. Economic cost-benefit analysis tends to limit the assessment of benefits to economic values, ignoring the importance of other value factors such as the wishes of minority groups, inclusiveness and respect for the rights of others. These value factors are difficult to rank and measure in terms of weighting, yet cost-benefit analysis suffers from the inability to consider these factors comprehensively, thus lacking

5520-679: The Kaunas–Vilnius connection (Lithuania), an improved connection in Kaunas (Lithuania), and the construction of the Ülemiste–Tallinn airport tram line (Estonia). Moreover, the preparation of environmental impact assessments, spatial planning, and some preliminary designs has provided better investment estimations for the project. Thus, in April 2017, the overall cost of the Rail Baltica Global Project implementation in all three countries—including

5635-568: The Lithuanian/Polish state border with a connection of Vilnius–Kaunas as a part of the railway" and defining a design speed of 240 km/h for passenger travel. Thus, the Rail Baltica Global Project route was aligned from Tallinn until Kaunas, with the pre-existing European gauge railway line section from Kaunas to the Lithuanian/Polish border being subject to the results of the Upgrade Feasibility Study. Nevertheless, in April 2018,

5750-646: The Lithuanian–Polish border. In 2019, the first cornerstone of Rail Baltica was laid in Estonia to mark the beginning of construction of the Saustinõmme viaduct. Also, detailed technical design contracts were signed for the following sections: Tallinn–Rapla and Pärnu–Rapla in Estonia, Kaunas–Ramygala and Ramygala–Latvian/Lithuanian border in Lithuania, and Vangaži–Salaspils–Misa and the main line through Riga in Latvia. With

5865-532: The Ministries of the three Baltic States approved the design guidelines of Rail Baltica, which state that the maximum design speed will be 249 km/h and maximum operational speed should be 234 km/h. For the Kaunas (Jiesia)–Lithuanian/Polish border section, a 78.1 km route named "alternative 6A" was approved in May 2022 by the Lithuanian Ministry of Transport and Communications, taking into account

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5980-496: The Rail Baltica Global Project would create is an additional €2 billion. It is also claimed there will be "substantial unmeasurable benefits". In late April 2022, implementers of the Rail Baltica project presented the progress at the European Parliament where the strategic and geopolitical security importance of the project was stressed repeatedly in reference to the 2022 Russian invasion of Ukraine . Criticism started after

6095-633: The Rail Baltica I project included upgrades of the existing rail lines in the region. The 66-kilometre-long (41 mi) Russian gauge line from Tartu to Valga (on the Latvian border) in Estonia was renovated between 2008 and 2010. The work was done by the Finnish VR Group for a cost of €40 million. The Baltic railway infrastructure will be connected to the European railway corridor, ensuring high-speed passenger travel and freight movement. Rail Baltica creates

6210-608: The Rail Baltica Riga Central Railway Station reached the rooftop, which was celebrated with a ceremony according to Latvian tradition. This train station is expected to become the busiest in the Baltics once Rail Baltica is fully operational. The name "Rail Baltica" is also sometimes used to mean the first phase of European gauge railway construction from the Poland/Lithuania border to Kaunas in Lithuania. It

6325-409: The Rail Baltica project are ministries of the three Baltic States: Estonia's Ministry of Economic Affairs and Communications, Latvia's Ministry of Transport, and Lithuania's Ministry of Transport and Communications. In 2014, they established RB Rail AS, a joint venture that acts as the main coordinator and project implementer for the project. Its main business is the design, construction, and marketing of

6440-411: The Rail Baltica project was neither feasible nor eligible for EU financing. They asked for comments from RB Rail AS, the Rail Baltica coordinator, who provided answers four months later. The authors of the first study claimed that the issues raised in their previous analysis were not adequately addressed in the official replies and that therefore Rail Baltica will be detrimental to society. The authors of

6555-509: The Republic of Estonia approved the spatial plan for the line in Estonia, leading to the setting of the final route and preliminary design of the railway in the country. With Estonia's decision, the spatial territorial planning and preliminary technical design of the Rail Baltica railway in the Baltic states was finalised. The Rail Baltica project entered the design phase in all three Baltic States with

6670-705: The U.S. Securities and Exchange Commission must conduct cost-benefit analyses before instituting regulations or deregulations. CBA has two main applications: CBA is related to cost-effectiveness analysis . Benefits and costs in CBA are expressed in monetary terms and are adjusted for the time value of money ; all flows of benefits and costs over time are expressed on a common basis in terms of their net present value , regardless of whether they are incurred at different times. Other related techniques include cost–utility analysis , risk–benefit analysis , economic impact analysis , fiscal impact analysis, and social return on investment (SROI) analysis. Cost–benefit analysis

6785-511: The US, after the Federal Navigation Act of 1936 mandated cost–benefit analysis for proposed federal-waterway infrastructure. The Flood Control Act of 1939 was instrumental in establishing CBA as federal policy, requiring that "the benefits to whomever they accrue [be] in excess of the estimated costs." More recently, cost-benefit analysis has been applied to decisions regarding investments in cybersecurity-related activities (e.g., see

6900-678: The application of CBA to public policies include the Canadian guide for regulatory analysis, the Australian guide for regulation and finance, and the US guides for health-care and emergency-management programs. CBA for transport investment began in the UK with the M1 motorway project and was later used for many projects, including the London Underground 's Victoria line . The New Approach to Appraisal (NATA)

7015-441: The approval of detailed design guidelines. Certain sections have finished consolidating preliminary technical design, tendering the detailed technical design services, and preparing a BIM strategy . On 20 March 2018, the first Rail Baltica construction design and supervision contract—for Rail Baltica's Riga International Airport railway station, related infrastructure, and viaduct—was signed by Eiropas Dzelzceļa līnijas SIA and PROSIV,

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7130-465: The best approach to achieving benefits while preserving savings in, for example, transactions, activities, and functional business requirements. A CBA may be used to compare completed or potential courses of action, and to estimate or evaluate the value against the cost of a decision, project, or policy. It is commonly used to evaluate business or policy decisions (particularly public policy ), commercial transactions, and project investments. For example,

7245-428: The busiest lines between Helsinki or Turku via Oulu to Lapland (minimum distance of 676 km (420 mi)), leaving most tracks free for nightly freight traffic (about 40 million tonnes per year). In addition there are also good long-distance bus and airplane connections; buses are sometimes faster and/or cheaper than trains (e.g. Helsinki– Pori ). The first rail line between Helsinki and Hämeenlinna (today part of

7360-479: The cities (freight terminal facilities and passenger depot). Estonia faces cost increases and construction delays. As of 2023, the project completion is scheduled for 2030, with services starting in 2028 on some sections. The Rail Baltica project is being implemented by the three Baltic States: Estonia, Latvia, and Lithuania. Finland announced in February 2019 that it will also join the project. The beneficiaries of

7475-767: The construction of the Kaunas–Vilnius section—was estimated to be €5.8 billion, according to a cost-benefit study carried out by Ernst & Young . According to the analysis, the project's economic feasibility and social benefits were still proved, providing the necessary updated parameters for continued EU and national co-financing of the project. The project's profitability lies in its wider socio-economic benefits, which Ernst & Young estimated to be around €16.22 billion. In addition, several immeasurable (mostly catalytic) benefits would be created through regional integration, such as tourism development, new business creation, increased attractiveness to FDI, access to new export markets, technological transfer, and innovation. The project

7590-571: The contracts signed, geotechnical research was started in different sections of the railway in order to gather information about the soil. In 2020, the development of detailed technical design had progressed to cover 643 km (400 mi) of the main track, which included all railway sections in Estonia and Latvia as well as sections from Kaunas to the Latvian/Lithuanian border in Lithuania. In Estonia, discussions about environmental impact assessment were started and meetings were planned until

7705-551: The country is not very well suited to railways. Commuter services are nowadays rare outside the Helsinki area, but there are express train connections between most of the cities. As in France, passenger services are mostly connections from various parts of the country to the capital, Helsinki. Currently there are about 260 passenger round trips driven daily in Finland, excluding Helsinki commuter rail . Nightly passenger trains only operate on

7820-671: The coverage provided by the bus services. Most passenger train services originate or terminate at Helsinki Central railway station , and a large proportion of the passenger rail network radiates out of Helsinki. VR also operates freight services. Maintenance and construction of the railway network itself is the responsibility of the Finnish Rail Administration , which is a part of the Finnish Transport Agency ( Finnish : Väylävirasto , Swedish : Trafikledsverket ). The network consists of six areal centres, that manage

7935-589: The critical analysis have been accused of having a conflict of interest, as one of the authors owns a logistics company. It has been claimed that Rail Baltica would decrease the volume of business for road transport businesses. The author has denied these claims. For 150 mph (241 km/h) or more in the US, see High-speed rail in the United States Rail transport in Finland#History The Finnish railway network consists of

8050-487: The discount rate (to have uncertainty increasing over time), it is usually considered separately. Particular consideration is often given to agent risk aversion : preferring a situation with less uncertainty to one with greater uncertainty, even if the latter has a higher expected return . Uncertainty in CBA parameters can be evaluated with a sensitivity analysis , which indicates how results respond to parameter changes. A more formal risk analysis may also be undertaken with

8165-598: The distant future. For publicly traded companies, it is possible to find a project's discount rate by using an equilibrium asset pricing model to find the required return on equity for the company and then assuming that the risk profile of a given project is similar to that the company faces. Commonly used models include the capital asset pricing model (CAPM): r = r f + β [ E ( r M ) − r f ] {\displaystyle r=r_{f}+\beta \left[\mathbb {E} (r_{M})-r_{f}\right]} and

8280-821: The embankment. The railway project will enable intermodality and multimodality , i.e. transportation of freight through two or more methods of transportation. Rail Baltica includes plans for three multimodal freight terminals located in Muuga Harbour (Estonia), Salaspils (Latvia), and Kaunas (Lithuania). This is intended to create synergies with the existing 1,520 mm railway system infrastructure. There will be seven international passenger stations—in Tallinn , Pärnu , Riga , Riga Airport, Panevežys , Kaunas , and Vilnius —with potential regional stations and connections to airports and seaports. The section from Helsinki to Tallinn will be operated by existing commercial ferries . In

8395-476: The end of 2020. During the discussions, people were invited to ask questions regarding the project's environmental impact, while various technical solutions were presented. In Latvia, the Riga Central Station construction was officially started with ceremonies on 23 November 2020. On the 3rd of February 2021, the project implementer of Riga Airport Station was also chosen; construction began in May 2021 and

8510-448: The existing standard gauge railway to enable travel speeds of up to 160 km/h (99 mph) along the stretch in Poland from Warsaw via Białystok and Ełk to Trakiszki , followed by a new railway with standard gauge from Trakiszki to Kaunas. For the remainder of the route to Tallinn, two different options were considered: The Šiauliai –Latvian border rail section (using broad gauge)

8625-581: The feasibility study published by AECOM in 2011, with the government of Lithuania keen to include a link to Vilnius. The mayor of Tartu , Estonia's second-largest city, called for the city to be included in the route. In 2013, the Estonian Association for the Club of Rome advised the government to abandon the Rail Baltica route. Problems in the environmental assessment programme have also been claimed. In 2017, two Estonian environmental groups claimed that

8740-440: The freight railway traffic between Finland and Russia was more intensive compared to traffic between Finland and Sweden. There were also a few daily passenger trains between Russia and Finland . Cost-benefit analysis Cost–benefit analysis ( CBA ), sometimes also called benefit–cost analysis , is a systematic approach to estimating the strengths and weaknesses of alternatives. It is used to determine options which provide

8855-497: The future, a proposed Helsinki to Tallinn Tunnel could provide a rail link between the two cities. Rail Baltica will be built as a new, publicly owned, fast conventional double-track railway. If the railway runs freight trains, it will be quadruple-track. It will be electrified and equipped with the European Rail Traffic Management System (ERTMS) for signalling and communications. The maximum design speed

8970-674: The gradual conversion of other gauges to the European standard gauge. At the time of the proposal, the Finnish and Estonian governments expressed criticism of this plan, including questioning the balance between cost/benefit. It will apply only for Turku - Turku Port section (from 1524mm gauge, including electrificaion conversion from 25kV 50Hz AC to 1500V DC) and Helsinki tram network (from 1000mm gauge). Due to most freight trains were diverted to Uusikaupunki, and 1520mm-onboad trainferries to Sassnitz/Mukran and container ships were shifted from Turku port to Uusikaupunki port, since Turku-Uusikaupunki electrification. The national railway company VR had

9085-481: The high-speed railway connection from Tallinn to the Lithuanian-Polish border was expected to be completed by 2026. As of June 2020, the undersea railway tunnel between Tallinn and Helsinki was envisioned to be completed around mid-2026. At the end of April 2021, governments of Estonia and Finland signed a memorandum of understanding committing themselves to cooperation in the area of transport. As of 2024,

9200-402: The independent or German-occupied Baltic states, these were later converted back to Russian gauge under Soviet occupation rule after 1945. According to a study produced by Ernst & Young , the measurable socio-economic benefits are estimated at €16.2 billion. The assessed GDP multiplier effect the Rail Baltica Global Project would create is an additional €2 billion. As of January 2020,

9315-525: The lack of public participation on the decision made by Baltic governments and building of a new line, rather than upgrading the existing network, is in conflict with the Aarhus Convention . In 2016 and 2017, three open letters were composed in Estonia which called on the Estonian government and parliament to stop the project in its planned form. The main arguments in these letters were that the new track as

9430-530: The line to Kemijärvi, another line recently electrified was the line from Seinäjoki to Vaasa in 2011. The next railway line to be electrified was the railway from Turku to Uusikaupunki , which was completed by February 2022. The maximum speed for passenger traffic is 220 km/h (140 mph), but is achieved only on the Kerava–Lahti railway line . Freight trains have a maximum speed of 120 km/h (75 mph). Actual speed limits vary depending on

9545-469: The measures would not have been implemented (although all are considered highly successful). The US Clean Air Act has been cited in retrospective studies as a case in which benefits exceeded costs, but knowledge of the benefits (attributable largely to the benefits of reducing particulate pollution ) was not available until many years later. A generic cost–benefit analysis has the following steps: In United States regulatory policy, cost-benefit analysis

9660-453: The more familiar task of measuring costs and benefits". The challenge raised is that it is possible for the benefits of successive policies to consistently accrue to the same group of individuals, and CBA is ambivalent between providing benefits to those that have received them in the past and those that have been consistently excluded. Policy solutions, such as progressive taxation can address some of these concerns. Others have critiqued

9775-459: The national and EU level—were made to implement Rail Baltica. Since the AECOM study, the project has grown to include additional elements to the Rail Baltica Global Project for better connectivity, passenger mobility, and inter-modality. These additions include routing the Rail Baltica passenger mainline through the Riga International Airport and the construction of the airport passenger station (Latvia),

9890-480: The national implementing bodies. All construction carried out by the implementing bodies is done under the supervision of RB Rail AS and is based on common procurement principles, rules, and contract templates. A feasibility study of Rail Baltica in the three Baltic States carried out by AECOM in May 2011 estimated a cost of €3.6 billion for the railway and proved that Rail Baltica is economically viable. Based on that study, key political and practical decisions—both on

10005-513: The older standard of ranging 127 mm (5.0 in) to 265 mm (10.4 in) above top of rail. The sole exception on the national railway network is the Nikkilä halt which has a platform height of 400 mm (15.8 in). The majority of the passenger rolling stocks in Finland and the other 1,520 mm ( 4 ft  11 + 27 ⁄ 32  in ) gauge compatible network have bottom steps lower than 550 mm (21.7 in), thus

10120-436: The opinion of the majority of the local residents. This optimal route is the shortest among the alternatives which were proposed and the most remote from the urban areas. The Polish section of Rail Baltica is being upgraded to allow passenger trains to run at 200 km/h. The Ełk–state border section may be built to allow 250 km/h and may be electrified using the 25 kV AC system. On 29 February 2024, construction on

10235-529: The overall corridor should be completed by 2030. The overall length of the railway between Tallinn and Warsaw will be at least 950 km (590 mi), while the length within the Baltic States proper will be 870 km (540 mi). In 2017, all three Baltic parliaments ratified the Inter-Governmental Agreement for the Rail Baltica project, thereby confirming their long-term commitment to

10350-513: The planning of the location of the project route in the Baltic States, a conceptual agreement among the three countries was reached that the railway should be as straight as possible, as this provides the highest benefits at the lowest cost. The shorter and more direct the route is, the faster traffic it can ensure, which economically has the highest advantage compared to its alternatives. This was confirmed by an AECOM study in 2013. Initially, two options were considered. Both options included upgrading

10465-652: The platforms with 550 mm (21.7 in) height can create negative vertical gaps, unlike the rest of Europe. There are current proposed figures: Most passenger rail services in Finland radiate from Helsinki Central , serving most major cities including Tampere , Turku , Oulu , Rovaniemi , Kouvola , Kuopio , Jyväskylä and Joensuu among others. Some towns are connected to the rail network by their own branch lines, yet are not served by passenger trains; examples include Porvoo , Uusikaupunki , Raahe and Rauma . Before sanctions towards Russia due to its war in Ukraine ,

10580-457: The poor. Sometimes this is framed in terms of an argument about democracy, that each person's preferences should be given the same weight in an analysis (one person one vote), while under a standard CBA model the preferences of the wealthy are given greater weight. Taken together, according to this objection, not using weights is a decision in itself – richer people receive de facto a bigger weight. To compensate for this difference in valuation, it

10695-515: The possibility to shift the major freight transport in the regions from road to rail, which is currently being transported towards Russia and then north by heavy trucks. In the case of Poland, trucks follow local roads and directly cross the villages of Podlaskie Voivodeship . According to the 2017 cost-benefit study by Ernst & Young, the benefits from Rail Baltica are calculated to be: All in total, measurable socio-economic benefits are estimated at €16.2 billion. The assessed GDP multiplier effect

10810-465: The potential harmful impacts of climate change. The growing relevance of climate change has led to a re-examination of the practice of discounting in CBA. These biases can lead to biased resource allocation. The main criticism stems from the diminishing marginal utility of income. According to this critique, without using weights in the CBA, it is not the case that everyone "matters" the same but rather that people with greater ability to pay receive

10925-406: The practice of discounting future costs and benefits for a variety of reasons, including the potential undervaluing of the temporally distant cost of climate change and other environmental damage, and the concern that such a practice effectively ignores the preferences of future generations. Some scholars argue that the use of discounting makes CBA biased against future generations, and understates

11040-406: The project. In addition, Rail Baltica Global Project's cost-benefit analysis was delivered by Ernst & Young and Atkins International experts, based on the European Union's CBA guidelines. The analysis showed that the project was financially feasible and viable, and its measurable benefits would outweigh the costs. In August 2016, the spatial planning for the entire Rail Baltica railway line

11155-496: The public has no legal right to the benefits of the policy), or willingness to accept compensation (implying that the public has a right to the benefits of the policy) for the policy's welfare change. The guiding principle of evaluating benefits is to list all parties affected by an intervention and add the positive or negative value (usually monetary) that they ascribe to its effect on their welfare. The actual compensation an individual would require to have their welfare unchanged by

11270-516: The railway. RB Rail AS also submits EU financing proposals for the Rail Baltica purchasing body for all parties for the procurement of studies, plans, designs for the Global Project, sub-systems (control, command, and signalling and energy/electrification), raw materials, key components, and cross-border track sections. Rail Baltic Estonia OU in Estonia, Eiropas Dzelzceļa līnijas SIA in Latvia, and Rail Baltica statyba UAB and LtgInfra in Lithuania are

11385-533: The regulatory process. The use of CBA in the regulatory process continued under the Obama administration, along with the debate about its practical and objective value. Some analysts oppose the use of CBA in policy-making, and those in favor of it support improvements in analysis and calculations. As a concept in economics, cost-benefit analysis has provided a valuable reference for many public construction and governmental decisions, but its application has gradually revealed

11500-502: The regulatory process. After campaigning on a deregulation platform, he issued the 1981 EO authorizing the Office of Information and Regulatory Affairs (OIRA) to review agency regulations and requiring federal agencies to produce regulatory impact analyses when the estimated annual impact exceeded $ 100 million. During the 1980s, academic and institutional critiques of CBA emerged. The three main criticisms were: These criticisms continued under

11615-466: The sum of each user's willingness to pay, Dupuit illustrated that the social benefit of the thing (bridge or road or canal) could be measured. Some users may be willing to pay nearly nothing, others much more, but the sum of these would shed light on the benefit of it. It should be reiterated that Dupuit was not suggesting that the government perfectly price-discriminate and charge each user exactly what they would pay. Rather, their willingness to pay provided

11730-419: The three Baltic States, will exceed 1.1 billion euros, enabling necessary activities for further high-speed infrastructure development. The planning phase of Rail Baltica took place from 2010 to 2017. In 2011, the three Baltic States agreed on a route connecting Tallinn, Pärnu , Riga, Panevėžys , and Kaunas. A feasibility study for this option estimated the line would cost about €3.68 billion in total. During

11845-436: The train type and track portion. Some delays can occur in autumn and winter due to weather conditions (e.g. high winds). The signalling system used on the railway network in Finland comprises color-light signals and fixed signs. They are used together with ATP-VR/RHK ( EBICAB 900), a train protection system usually referred to as JKV ( Finnish : junien kulunvalvonta ) which has to be used on rolling stock. The system

11960-472: The tunnel was still at the investigative stage. Rail Baltica will be an electric railway , motivated by a desire to reduce carbon emissions . The railway has been planned to avoid Natura 2000 protected areas, in addition to minimising impacts on other environmentally sensitive protected areas and existing 1,520 mm gauge railway networking areas. Wherever necessary, noise protection barriers will be installed. Special animal passages will be built through

12075-472: The use and maintenance of the routes in co-operation. Cargo yards and large stations may have their own signalling systems. Finnish trains have a reputation for being spacious, comfortable and clean. The scenery surrounding the railway lines is considered to be of outstanding natural beauty, especially in Eastern Finland with its many lakes. Since the density of population is low in most parts of Finland,

12190-466: The value of human life can be influenced by income level. Variants, such as cost–utility analysis , QALY and DALY to analyze the effects of health policies, may be more suitable. For some environmental effects, cost–benefit analysis can be replaced by cost-effectiveness analysis . This is especially true when one type of physical outcome is sought, such as a reduction in energy use by an increase in energy efficiency. Using cost-effectiveness analysis

12305-420: The winner of the open international tender and a partnership of suppliers from three countries: Prodex (Slovakia), Sintagma (Italy), and Vektors T (Latvia). In 2018, studies related to commercialisation and supply materials were finalised, including a long-term business plan, an operational plan, an infrastructure management study, and an upgraded feasibility study of the European gauge railway line from Kaunas to

12420-547: Was CEF contribution. In July 2020, another CEF funding was received, amounting to €216 million for construction, technical design, and planning works. In total, the project has received around €1.2 billion from the EU and national funds. In October 2023 Rail Baltica joint venture of the Baltic States, RB Rail AS, announced the signing of an additional cross-border Grant Agreement for Connecting Europe Facility (CEF) funding, which amounted to 928 million euros CEF support. This substantial funding, combined with national co-financing from

12535-649: Was approved in Latvia by the decision of the Latvian Government. This was followed by the approval of the Lithuanian Government in January 2017 for their respective section from Kaunas to the border with Latvia. The route for the section from Kaunas to the border with Poland, known as Rail Baltica I, is subject to the results of an Upgrade Feasibility Study. On 14 February 2018, the Ministry of Public Administration of

12650-496: Was completed in 2017, the Luumäki - Imatra (-Simpele) section will be fully doubled by 2023. For Laurila-Tornio-Haparanda line upgrade, remove standard gauge tracks at Tornio yard area and Tornio-Haparanda section, add 25kV 50Hz AC overhead lines, and track layout modification at both Tornio yard area and Haparanda station, including new passenger platforms installation (at Tornio yard area and Finnish side of Haparanda station). Since

12765-517: Was developed to represent the non-tangible value of resources such as national parks. CBA was expanded to address the intangible and tangible benefits of public policies relating to mental illness, substance abuse, college education, and chemical waste. In the US, the National Environmental Policy Act of 1969 required CBA for regulatory programs; since then, other governments have enacted similar rules. Government guidebooks for

12880-420: Was formalized in subsequent works by Alfred Marshall . Jules Dupuit pioneered this approach by first calculating "the social profitability of a project like the construction of a road or bridge" In an attempt to answer this, Dupuit began to look at the utility users would gain from the project. He determined that the best method of measuring utility is by learning one's willingness to pay for something. By taking

12995-576: Was inaugurated on 16 October 2015. The project, which built one track at European standard-gauge alongside the existing Russian gauge tracks, cost €380 million. The 119 km line accommodates diesel trains, with passenger trains running at up to 120 km/h and freight trains at up to 80 km/h. Higher speeds will depend on future electrification, a new signal system, and more level crossing gates. In June 2016, Lithuanian Railways and Polregio started weekend passenger train service between Kaunas and Białystok . In Estonia and Latvia, implementation of

13110-664: Was later introduced by the Department for Transport, Environment and the Regions . This presented balanced cost–benefit results and detailed environmental impact assessments . NATA was first applied to national road schemes in the 1998 Roads Review, and was subsequently rolled out to all transport modes. Maintained and developed by the Department for Transport , it was a cornerstone of UK transport appraisal in 2011. The European Union 's Developing Harmonised European Approaches for Transport Costing and Project Assessment (HEATCO) project, part of

13225-461: Was newly built and scheduled to be finished in 2015 with an estimated cost of €270 million. In Latvia, the existing railway upgrade between Riga and Valka was finished in 2016 at a cost of €97 million. The EU contributed about 25% of the cost for the three parts. In 2017, the parliaments of the three Baltic States ratified the intergovernmental agreement on Rail Baltica, stating that the "route shall be from Tallinn through Pärnu–Riga–Panevėžys–Kaunas to

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