A new tram line in Vantaa could significantly boost the economy, but may bring new costs for the municipality, according to reports commissioned by the city.
Located just north of Helsinki, Vantaa has traditionally been home to car-owning commuters, with public transport users restricted to commuter trains and buses.
“At the moment, it looks like we won’t manage with the current buses,” said Vantaa transport engineer Tiina Hulkko. “The 562 bus route is already congested.”
Consultants hired by the city produced five reports published this week looking at different aspects of the tram project. They predict the new infrastructure will help serve the estimated 90,000 new residents expected to be living in Vantaa by 2050.
Land value increase
As it grows, the city authorities are planning to expand public transport with a tram line linking Mellunmäki metro station in the far east of Helsinki via the airport to Vantaa's Tikkurila district in the east.
The goal is to have trams running along the new line by 2028. Next year some 1.5 million euros has been allocated for planning the project, so long as the city board approves the move before the end of the year.
The municipality’s technical committee has already given it the green light.
The project rose to the top of local politicians’ agenda in the autumn, as they demanded precise calculations and cost-benefit analyses.
Consultants hired by the city estimate in a report out on Tuesday that the tram line will raise land values and spur building.
There is estimated to be potential to build more than 3 million square metres of living space near the tracks, and more than 1.6 million square metres of commercial space.
“The biggest positive financial implications for the city are clearly in property and for example land sale proceeds from the areas near the tracks,” said Hulkko.
The tram would, argues the report, provide the conditions for new home building which could bring additional taxpayers and businesses to the municipality. New residents have also brought new costs to the city in social and healthcare provision, for example.
If the new residents reflect the current socio-economic mix in Vantaa, their tax revenues would not suffice to pay for the services they use. In that case the new residents would cost the city some 101 million euros a year over a 40-year period.
If the new residential districts constructed near the tram attract a wealthier demographic, the benefits to local government finances could amount to 45 million euros a year.
Both calculations are very sensitive to changes in the underlying assumptions, as it is very difficult to estimate the economic impacts of new infrastructure spending.
The reports also looked at the option of running ‘superbuses’ on the same route, that is fully electric vehicles that are not yet on the market.
They would be substantially cheaper, at 155 million euros compared to a 393 million euro price tag for the tram.
But they do not bring any of the reputational benefits that a tram system would, according to Hulkko.
The report estimates that by 2050 some 10,000 people would live along the tram tracks, while a superbus option would only inspire construction housing some 4,000 residents.