The government's Ministerial Committee for Economic Policy has approved a plan to move ahead with a new train route across southeast Finland, linking Helsinki and the Russian border via Porvoo and the inland city of Kouvola.
An alternate route that would have gone along the coast through Loviisa and Kotka now looks less likely, although Kotka officials have argued that a connection to its port would be crucial. A proposal for a more northerly route from Lahti to Mikkeli also appears to be off the table.
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The Ministry of Transport and Communications said on Thursday that it will continue negotiations with the municipalities that would benefit from the new track line and other possible players about setting up a rail connection planning project company.
State to pay just over half of costs
The firm is to be responsible for planning and financing the project through its completion. Initial estimates put the price tag at around 70 million euros.
The project company would be at least 51 percent state-owned, while the other stakeholders would have to commit to covering 49 percent of the cost. Eventually Parliament must approve state funding for the project.
The centre-left government led by Prime Minister Sanna Marin (SDP) has pledged to invest heavily in Finland's rail services as part of its ambitious emissions-cutting agenda. Virtually all of State Railways VR's trains all run on electricity generated by hydropower.
The cities along the proposed eastern route have already decided how much they are prepared to pony up for the venture.
For instance, Lappeenranta, near the Russian border, has committed to about 3.6 million euros, while Kouvola says it is ready to invest nearly five million euros.
The city, with a population of some 82,000, lies 135 kilometres northeast of Helsinki.