Government proposes amendments to appropriations for 2025 and allocates over EUR 1 billion to promote transport projects

Government proposes amendments to appropriations for 2025 and allocates over EUR 1 billion to promote transport projects

Budget 2025 (Image: Prime Minister´s Office)

On 21 November 2024, the Government submitted to Parliament its proposal to amend the budget proposal for 2025. The Government proposes funding for the Digirail project, which involves the modernisation of Finland's rail traffic control system, and several rail, urban tramline and road projects. The Government also proposes EUR 400 million for the construction of West Railway, subject to certain conditions.

Rail traffic control system to be modernised to ensure safety

The modernisation and repairs of the rail traffic control system are an essential investment in the Finnish railways that will replace equipment to improve safety. The project will modernise the safety equipment of the entire rail network in Finland and the train control system, which have reached the end of their service life. The preparations for the Digirail project began in 2019 with extensive cooperation between the parties involved in the Finnish railway sector. Digirail is included in the national Transport 12 plan.

The Finnish Transport Infrastructure Agency and Fintraffic Railway Ltd will launch the implementation phase of Digirail together. The Government proposes a budget authority of EUR 10 million and an appropriation of EUR 1 million for 2025 for the modernisation of the rail traffic control system and for investment in repairs.

The project's total cost estimate is approximately EUR 1.2 billion. The investment costs are scheduled for 2025-2040. The project has received around EUR 100 million in EU funding.

West Railway to receive funding subject to conditions

The Government proposes a budget authority of EUR 400 million and an appropriation of EUR 10.55 million for 2025 to cover the cost of West Railway's construction phase. The funding would be subject to certain conditions. The central government will make the financial commitment provided that the shareholder agreement is signed and that the municipalities, cities and other public sector bodies that will potentially benefit from West Railway contribute at least EUR 400 million towards the total cost of construction.

The funding may be used to plan the construction and construct the rail sections laid down in the West Railway Ltd's shareholder agreement. The transition to the construction phase concerns the sub-projects between Espoo and Lohja and the Salo-Hajala and Nunna-Kupittaa sections. The construction would start in 2027.

The state holds at least 50.1 per cent of the shares in West Railway Ltd. The state and the municipalities that are shareholders of West Railway Ltd, i.e. Turku, Espoo, Salo, Lohja, Vihti and Kirkko-nummi, have been negotiating the terms of the preliminary agreement on the transition to West Railway's construction phase. The negotiations are still ongoing.

Land use, housing and transport agreements boost economic viability and growth

Under the land use, housing and transport agreements, the Government proposes EUR 130.3 million for investments in urban regions in 2025. The funding would be part of the fixed-term investment programme laid out in the Government Programme.

Central government funding is allocated to projects that support the economic viability of urban regions and improve the conditions for growth. For example, the projects can improve land use development, internal connectivity in urban regions, and transport safety.

The use of appropriations under the agreements is subject to the commitment of the municipalities of Helsinki, Tampere, Lahti, Jyväskylä, Kuopio and Oulu regions to the objectives and measures under the agreement for 2024-2035 and to their financing, as confirmed in the outcome of the negotiations on 23 September 2024.

The Government proposes funding to the following projects:

• A total of EUR 79.4 million for basic transport infrastructure management covering traffic safety and other measures in the regions

• Oulu passenger rail yard: a maximum budget authority of EUR 24.5 million and an appropriation of EUR 1 million for 2025

• Re-routing of the Turku port railway: a maximum budget authority of EUR 11 million and an appropriation of EUR 1 million for 2025

• Maarinsolmu junction of main road 101 Kehä I ring road in Espoo: a maximum budget authority of EUR 33.7 million and an appropriation of EUR 1 million for 2025.

• Main road 4 Lahdenväylä between Kehä I-Kehä III ring roads and Ilmasilta junction: a maximum budget authority of EUR 64 million and an appropriation of EUR 1 million for 2025

• Main road 4 in Palokka, Jyväskylä: a maximum budget authority of EUR 15.5 million and an appropriation of EUR 2 million for 2025

• Turku ring road of E18 main road 40 in the centre of Raisio: a maximum budget authority of EUR 190 million and an appropriation of EUR 3 million for 2025.

• Highway 180 Kurkela-Kuusisto, Kaarina west bypass: a maximum budget authority of EUR 103.2 million and an appropriation of EUR 5 million for 2025.

• Railway and metro station renovations in Helsinki: EUR 7.4 million for 2025, a maximum budget authority of EUR 15 million, however not exceeding 30 per cent of the total cost of station-specific planning and construction

• Tramlines in the Tampere region: EUR 8 million for 2025, a maximum budget authority of EUR 55.5 million, however not exceeding 30 per cent of the total cost of planning and construction

• Tramlines in Vantaa: EUR 14 million for 2025, a maximum budget authority of EUR 144.1 million, however not exceeding 30 per cent of the costs closely related to the tramline construction

What's next?

The Budget will be approved in a plenary session of Parliament in December 2024.

Inquiries

Digirail and West Railway: Miikka Rainiala, Director of Governance Steering Unit, tel. +358 295 342 051, [email protected]

Land use, housing and transport projects: Maria Torttila, Senior Specialist, tel. +358 295 342 237, [email protected]

Budget: Mikko Nygård, Director of Finance and Administration, tel. +358 295 342 547, [email protected]

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