Evaluation of reopening the Pori Parkano Haapamäki railroad track

Transcription

1 Evaluation of reopening the Pori Parkano Haapamäki railroad track

2 EVALUATION OF REOPENING THE PORI PARKANO HAAPAMÄKI RAILROAD TRACK

3 ABSTRACT The evaluation of reopening the Pori Parkano Haapamäki railroad track is part of the Bothnian Green Logistic Corridor (BGLC) project within the EU Baltic Sea Region Program. The target of the EU project is to discover and develop new intelligent traffic solutions and efficient logistic chains that would facilitate and speed up transport and passengers traffic in the Bothnian Corridor region and enable smooth connections to European and global markets. The project has 29 partners in five countries ( This investigation has been carried by Sito Oy on the order of the Port of Pori. The Port of Pori is a partner in the BGLC project. The detail level of this investigation is a preliminary study. INNOVATIVE OPENING FOR DEVELOPING RAILROAD TRANSPORT IN FINLAND This investigation studies reopening of the closed railroad section between Haapamäki and Pori, for alternative routing of goods transport in the north south and east west directions. The investigation explored the impact of this railroad section on reallocating present transport flows using, for example, versatile modeling. National transport volume forecasts and the company inquiry, which was carried out for background material, were used as input to create rough estimates of the transport flows applicable for this railroad section. One of the investigation areas estimated in the study was the development of transport and transit traffic to Russia via the Pori Parkano Haapamäki Jyväskylä Pieksämäki Imatrankoski railroad track. The modernization costs required by the possible opening of the railroad section were naturally roughly estimated, too. NEW MINING PROJECTS AND ENERGY WOOD TRANSPORTATION ARE DEMANDING MORE RAILROAD TRANSPORT CAPACITY. According to the latest forecasts by the Finnish Transport Agency, the increase in railroad transport volumes by the end of the decade is rather moderate (less than 10%), and by 2030 there might be even a slight decrease in the total railroad transport volumes. The break in the growth is mainly caused by the decrease in the total volume of Finland's basic industry as a consequence of the global industrial structural change, as well as by the decrease in Finland's exports, due to the economic problems in Europe and the decrease in exports of raw materials to Russia through Finland's harbors. According to the forecast, the fastest growing area in the future will be combined transport, including on the railroads. There is, however, an exceptionally large number of uncertainties in the railroad transport forecasts, which can very quickly change the forecast figures upwards, even by tens of percentage points. The most difficult figures to forecast are those related to mining and mineral transport, as well as to the structural change of the wood industry and the future of transit traffic to or from Russia. At present, the most difficult bottle necks in the Finnish railroad network are the Helsinki Oulu main track and, in the eastern area, the Lahti Vainikkala track section. After the completion of the ongoing renovations of these track sections, however, the increase in transport and passenger traffic can be managed reasonably. However, the situation becomes completely different when the planned large mining projects in northern and eastern Finland, and the railroad transport of energy wood related to Finnish emission targets, come into force. There are also factors such as the opening of railroads to free competition, new regulations for road transport, personnel issues, and future fuel prices, which can change the situation rapidly in the future. The preparations for future changes must be started already today, at least by further investigation and planning of the issues. Phone: 2

4 Directing the new transport according to the present policy in the main railroad network would require large scale investment in the affected track sections, such as a second track for the Seinäjoki Tampere connection and a third track for the Tampere Toijala connection, the western bypass rail connection in Tampere, rearrangement of the Tampere freight rail yard, and increasing capacity in the Jämsä Orivesi track. The modeling carried out in this study showed that directing the mining and mineral transport of the new mines in the north through the Haapajärvi Jyväskylä track, which has a low traffic volume, and through the Pori Parkano Haapamäki track section, would move forward the large investments needed for the main tracks or partly replace them with lower costs. The track section would also provide an uncrowded east west connection for Russian traffic and the possible new transit transport. The re routing of goods transport along tracks with less traffic would also make it easier to achieve the national development targets for rapid passenger traffic by decreasing the slow goods transport on the tracks reserved for rapid passenger trains. A LOT OF POTENTIAL NEW USERS FOR THIS TRACK SECTION As background for the study, an inquiry to business companies was made regarding the usefulness of the Pori Haapamäki track in the transport and logistics chains of the companies. The inquiry was sent to more than 100 companies, and in total 35 replies were received, representing different lines of business. More than every second one of those who replied were certain to use or would probably use the track, either as part of the Imatrankoski Pori traffic or in transport rerouted from the Oulu Tampere main railroad. Most of those who were positive about the plan also believed they would probably increase the share of railroad in their transport. According to the estimate of those who replied to the inquiry, approximately a million tons of new transport volume could be routed to the Pori Haapamäki Imatrankoski connection, mostly transport to and from Russia. For some of those who replied, the track would enable a more direct connection to the Port of Pori, thus increasing the use of that harbor in their transport. For smoothly running transport flows, the option to bypass Tampere was also seen as an important benefit of the new rail connection. MODERNIZING THE TRACK SECTION FOR GOODS TRANSPORTS TAKES ABOUT 250 MILLION. The Pori Haapamäki track has been closed to traffic for almost 30 years, and the reopening requires large investments. The investments are, however, moderate compared to the track investment plans already known. The modernization costs to achieve the minimum standard of goods traffic were estimated as 250 million. The largest item (approx. 63%) in the cost calculation is the replacement of the rails and ties of the whole track. In principle, the modernization of the closed track is carried out in accordance with the four step model introduced by the Ministry of Transport and Communication, and the "more with less" philosophy explained in the traffic policy report. CONCLUSIONS The decisive factors in the investment and development activities of railroad transport in Finland are the location of the new mines and their mineral handling, as well as the harbors that are selected for extension transport, and whether the further processing of the mining products will be in Finland. Another significant factor affecting railroad transport in the future is the possible increase in the use of wood as an energy source, and the traffic policy according to the EU emission targets. According to the reports, it is not possible or economical to use just road transport for volumes of energy wood substantially larger than today, simply because the transport distances become longer. On the other hand, the traditional Finnish wood and paper industry, as well as the chemical industry, does not expect a significant increase in transport volumes, due to the decreasing demand and the change in the industrial structure. This does not mean, however, that the functions of the present railroad network should not be developed. It is difficult to predict the volume of transit traffic due to the traffic policies of the surrounding countries and the Phone: 3

5 competitiveness of the Finnish logistics business. The possible new transport flows through the BGLC corridor to Russia or the Far East are also being discussed among the representatives of the harbors, the trade and industry and the authorities in Russia and the Nordic countries, including Finland. If the mining projects and the large scale increase in energy wood being explored and calculated at the moment move to actual production, the existing main railroad network will have problems absorbing the substantial increase in transport volumes without large additional investments. In the future, we need a review and cost benefit optimization of the whole Finnish railroad network, where the alternatives are an intensified concentration of traffic on the main tracks or a more even use of the existing network by routing transport flows to less used tracks and reopening closed track. In addition to the track investments, the improvements needed to sea routes, harbors, and the road and street network have to be considered. In addition to the investment cost optimization, the wider dynamic impacts and the local structural and political issues concerning the alternatives have to be considered in the study. Opening the tracks to free competition in traffic, and future equipment issues, also require innovative thinking, because having more than one railroad company operating on the same track is not considered adequately in the development of the railroad network today. THE BENEFITS AND PROBLEMS OF REOPENING THE PORI PARKANO HAAPAMÄKI TRACK The reopening of the Pori Haapamäki track depends mainly on finding transport flows strong enough in volume and quality to market the track, with its extension connections, as a solution that replaces or defers the large investments in the main railroad network. In a broader context, the reopening can also be justified by the new or changing potential transport needs detected in the business inquiry. An important factor for reopening is also the future role of the transport through the harbor, such as mineral and chemical transport for the new and existing mines, as well as future transit and energy wood transport. The Port of Pori has a lot of available capacity and a safe and complete 15.3 meter deep sea route, and winter navigation to Pori is clearly more cost effective compared to the harbors in Kvarken or the Bay of Bothnia. The Pori Parkano Haapamäki track, together with the Ylivieska Haapajärvi Jyväskylä track, would provide the new and existing mines in Northern Finland with an efficient direct connection to the Port of Pori, avoiding the crowded traffic on the main track. Similarly, the track would benefit the possible new increase in east west transit traffic to the Imatrankoski (Parikkala) crossing (e.g. smoothly bypassing Tampere). According to the preliminary estimate, the investment need in reopening the Pori Parkano Haapamäki track is approximately 250 million. Thus, the total investment in reopening the track is high compared to the forecast investment frame of the railroad network. Based on the benefits in the traditional business economic profitability calculations (security, emissions, reduction in time costs) only, the project is difficult to justify in this economic situation and in the conditions of the present industrial policy, but the actual savings and benefits can be pointed out in the better functioning of the railroad traffic on the scale of the whole country, releasing the capacity of the main track, and in savings in the total investments in the whole infrastructure network. The purpose of the project studied here is not to replace whole projects; instead, the target is to study how the bottlenecks of the railroad network can be relieved with smaller investments, applying bottleneck thinking. It is most important to the future of Finland that the Finnish industrial and business life gets continuously improving and more competitive freight services, as well as better passenger traffic services. The renovations in road transport and the lack of personnel are changing the transport industry, and the substantial increase in fuel costs due to the sulfur directive will require technical and operational devel Phone: 4

6 opment of the railroad network. The climate policy requires operational changes and the introduction of new fuels such as LNG, including in land traffic. It would be possible to open the railroad connection on a rapid time schedule, because there are no planning obstacles or land ownership issues. The land on which the track is laid is owned by the Finnish Transport Agency, and reopening does not require an environmental license procedure. Equipment removed from the track is partly stored in emergency storage in the municipalities around the track. The major part of track on an existing roadbed is located in the solid ground of the ridge of Suomenselkä. FURTHER ACTIONS The project requires further investigations. As a further action, it is recommended to perform an investigation of demand and a preliminary project evaluation, and primarily a decision on performing these. The investigation of demand would also include modeling of the goods transport in Finland and investigation of preconditions for more comprehensive reintroduction of non traffic tracks. In addition, multi operator activities in the railroad network should be investigated, to improve the preconditions for competitiveness of railroad transport. Phone: 5

7 FOREWORD The reopening of the Pori Parkano Haapamäki track is part of the Bothnian Green Logistic Corridor (BLGC) project intended to develop the Bothnian Corridor. The project is financed by means of the EU's Baltic Sea Region Program. The target is to improve the competitiveness and availability of the region through new intelligent traffic solutions and effective logistics chains. The transport corridor can improve integration with the central and northern parts of Scandinavia, as well as the region's integration with Central Europe and Russia. An additional target is to carry out the integration in a greener way, with lower emissions to prevent climate change. The main focus is the development of railroad traffic. In connection with the development of the BGLC logistics corridor, this work has studied prerequisites for reopening the Pori Parkano Haapamäki track by investigating the required investment, the potential demand, and forecast change in the operating environment. In addition, the impacts of reopening the Pori Haapamäki track on the development needs of the whole Finnish railroad network and on the timing of the investments have been investigated at a general level. A seminar on the results of the work was arranged on May 21, 2013, in Helsinki. The investigation was carried out by the assignment of the Port of Pori. The members of the steering committee for the work have been Jaakko Nirhamo and Pekka Sundberg of the Port of Pori, Jarkko Rantala of Tampere University of Technology, Raija Viljanen of the National Emergency Supply Agency, Matti Spolander of the Federation of Finnish Technology Industries, and Katri Pynnöniemi of the Finnish Institute of International Affairs. The investigation was carried out by the consultants of Sito. Participants in the consultant working team have included, among others, Tenho Aarnikko (the person in charge of the work), Iida Maria Rantanen, Miika Koivisto, Maunu Tast, Ilkka Salanne, and Erkki Jaakkola. In June, 2013 The investigation working team Phone: 6

8 CONTENTS 1. INTRODUCTION Background The targets and the contents of the work FINLAND'S RAILROAD NETWORK The network and its problems today The currents status of the railroad network The problem points of the railroad network Railroad transport DEVELOPMENT POTENTIAL AND FORECAST FOR THE RAILROAD TRANSPORT AND RAILROAD NETWORK The general basis and objectives for development The development prospects for railroad transport Transport volume forecast The mining industry Wood industry and wood transport Fuel transport to energy supply and industrial processes Russian transport and transit transport Traffic and climate change policy IMPROVENT OF THE PORI PARKANO HAAPAMÄKI TRACK SECTION The present status Alternative action plans and cost estimate THE DEMAND FOR THE PORI HAAPAMÄKI IMATRA ROUTE The present and potential demand Railroad transport of the Port of Pori The business inquiry and interviews Respondents and use of railroad transport The use and potential demand for the Pori Haapamäki Imatrankoski track connection The modeled forecast of goods transport The Frisbee transport model Scenario studies Phone: 7

9 6. CONCLUSIONS AND FURTHER ACTIONS Impact analysis Evaluation of reopening the Pori Parkano Haapamäki railroad track Traffic preconditions Environmental and operational factors Financial preconditions and connections to other projects Further actions SOURCES Phone: 8

10 1. INTRODUCTION 1.1. Background The investigation is part of the Bothnian Green Logistic Corridor project (BGLC) funded by the EU for development of the Bothnian corridor. The Bothnian Corridor, also known as the Bothnian Arc, is located in Finland and in Sweden on the coast of the Bothnian Bay, and on both coasts of the Gulf of Bothnia. The corridor stretches through Norway, Sweden, and Finland to Russia, and over the Gulf of Finland to the Baltic countries. In October 2011, the European Commission issued a proposal for new guidelines for Trans European Transport Networks, TEN T. The proposal included the objectives and definitions for developing the transport network, and a proposal for the new TEN T network. The proposal divides the network into a core network and a broad comprehensive network. The targets of the core network are to remove traffic bottlenecks, modernize infrastructure, and enable smooth traffic flows across borders. In the future, the EU's support for TEN T will be directed mainly at the core network. The core network is to be complete by (MTC bulletin October 19, 2011) Picture 1.1. Bothnian Green Logistic Corridor (Source: Phone: 9

11 In Finland, the core network includes the Bothnian Corridor and the so called TEN T priority projects included earlier: the Nordic Triangle, the Motorway of the Baltic Sea, and Rail Baltica. According to the TEN T definition, the Bothnian Corridor in Finland includes Highway 4 Kemi Helsinki, and Highway 29 Kemi Tornio, as well as the main track from Helsinki via Tampere and Oulu to Tornio. It becomes difficult to integrate the sea transport and east west railroad transport with the railroad connections of the Bothnian corridor around the Gulf of Bothnia, because the restricted space for railroad traffic in the center of Tampere prohibits an increase in traffic volumes in that transport corridor. On the other hand, the limited capacity of the main track, which is the Oulu Helsinki track, sets limitations on goods transport to the harbors on the Gulf of Bothnia. According to estimates, it is not possible to increase goods transport on that track any more, if the travel time targets of passenger traffic set by the Finnish Transport Agency are to be achieved. From the goods transport point of view, the passenger traffic and its requirements are eating up the capacity required for goods transport. Due to these reasons, alternative routes for goods transport have to be explored. An alternative route could be created by reopening the whole Pori Parkano Haapamäki track. At the end point of the connection in the west, there is the Port of Pori. The Port of Pori is a general harbor handling all types of goods. The harbor consists of two harbor areas: Mäntyluoto and Tahkoluoto. There are railroad connections to all sections of the harbor. The Mäntyluoto harbor area handles mainly heavy lifting projects, container transport, minerals, and sawn goods. Mäntyluoto has a 12 meter deep sea route that enables the operation of Panamax class vessels The handling and storing spaces in Mäntyluoto are large. Picture 1.2. Goods traffic in the Port of Pori in (Source: Port of Pori). The Tahkoluoto harbor area accommodates a deep harbor for dry bulk cargo, as well as a chemical and oil harbor. The sea route to the deep harbor is 15.3 m. The most important advantage of the Tahkoluoto deep harbor is that the 15.3 meter route also enables operation of Capesize class vessels. The loading capacity Phone: 10

12 of the harbor is up to 1,200 tons/hour and the unloading capacity about 2,000 tons/hour, depending on the freight. The deep harbor is also operating as a re shipping harbor for bulk shipments. The sea route to the two quay space oil and chemical harbor is 10 meters deep and can easily be dredged to 12 meters. The oil and chemical harbor has existing tank capacity, including rock storage capacity, and empty space for new tanks. Both harbor areas of the Port of Pori have a lot of available capacity and available building sites The targets and the contents of the work The target of this work was to explore whether there are transport based and economic prerequisites for reopening the Pori Parkano Haapamäki track. The work investigates whether there is demand for opening the track and what actions the reopening would require in practice. The background also includes the development of the whole Finnish railroad system; the objective of this work is also to bring background information and development ideas to this. The development of the railroad system should be carried out observing the traffic and climate policy. According to the white paper of the EU traffic policy, long haul transport should be moved to more environmentally friendly transport forms. To create background data for the reopening, the investigation studies Finland's railroad network and its bottlenecks, as well as the forecasts and development prospects of the operating environment of the railroad transport. Based on these and the results of the business survey conducted in this work, it is estimated whether there would be demand for the reopened track. In addition, technical actions for reopening the track and a preliminary cost estimate are created. The type of the work is a preliminary study. Phone: 11

13 2. FINLAND'S RAILROAD NETWORK 2.1. The network and its problems today The currents status of the railroad network The total length of the railroad network managed by the Finnish Transport Agency is 5,944 kilometers (January 2013), of which 3,073 kilometers is electrified. In 1982, the length was still 6,041 km, but 381 kilometers of less used and unprofitable track was closed by 1996, including the main part of the Pori Haapamäki track. Picture 2.1. Finland's main traffic network (Source: The Finnish Transport Agency). Phone: 12

14 The largest part of the present railroad network in Finland is single track railroad. The most important exceptions to this are the local tracks in the Helsinki metropolitan area, the Helsinki Riihimäki Tampere section of the main track, the Riihimäki Kouvola Luumäki track, and the direct track to Lahti. On a singletrack railway, loops are required for passing. In this railway type, the number, location, and length of shunting tracks have a substantial impact on the traffic capacity. The most important and busiest connections in the railroad network outside the local tracks in the Helsinki metropolitan area are Helsinki Tampere Oulu (the main track) and Riihimäki Vainikkala St Petersburg (the St Petersburg track). In goods transport, the busiest connections today are Oulu Kokkola, Kouvola Vainikkala, and Tampere Toijala. Picture 2.2. The service level of the railroad network (Source: The Finnish Transport Agency). According to the Railway Act, the trunk network of the railroads (2,960 km) consists of the most important tracks, which must enable rapid passenger traffic and efficient goods transport. The rest of the railroad network consists of passenger traffic and goods transport tracks that are supplementary to the Phone: 13

15 trunk network. On the goods transport tracks of the trunk network, the target is 25 ton axle weight and km/h speeds, adequate to enable passenger traffic on the same track. The operations have been concentrated nationally in two main marshalling yards, one in Tampere and the other in Kouvola. In addition, there are about 10 less used basic yards, like the ones in Riihimäki, Pieksämäki, Seinäjoki, and Pasila in Helsinki. The Finnish railroads have four border crossing points to Russia: Vainikkala in Lappeenranta, Imatrankoski in Imatra, Niirala in Tohmajärvi, and Vartius in Kuhmo. Vainikkala is overwhelmingly the most crowded crossing point for both passenger traffic and goods transport. Goods transport is more and more being routed through Imatrankoski thus releasing railcapacity for Helsinki Vainikkala St Petersburg track The problem points of the railroad network The bottlenecks and capacity problems of the railroad network The most difficult bottlenecks in the Finnish railroad network are, at the moment, the Helsinki yard in the section Helsinki Pasila Ilmala, and the tracks Kerava Riihimäki, Luumäki Imatra, and Seinäjoki Oulu. Especially in the single track parts of the railroad network, concentration of both passenger traffic and goods transport on the same main track sections in Tampere Seinäjoki Oulu and Lahti Luumäki Vainikkala is a problem. Picture 2.3. The passenger traffic and goods transport flows are concentrated on the same tracks (Source: The Finnish Transport Agency). Phone: 14

16 The reasons for the capacity problems of the railroad network in brief are: The significant share of the single track network (more than 90% of the railroad network) is also busy track; for example, the Tampere Seinäjoki and Orivesi Jämsä Jyväskylä tracks. In the single track connections, the problem is the long safety distance required between the rapid passenger traffic and the heavy goods transport (the travel speed difference between a Pendolino and a freight train is 100 km/h). In wintertime, delays caused by traffic conditions spread rapidly to the whole network, because there are few loops where trains can pass. Failures caused by load bearing capacity and ground frost, and traffic limitations caused by ground frost, occur in springtime in more than a sixth of the railroad network, which is more than 900 km. The Seinäjoki Oulu track is one of the busiest single track connections in Finland. The connection is used by the majority of passenger traffic and goods transport between North and South Finland. At present, the most important deficits in capacity are located on the main track in the connection Kokkola Ylivieska and temporarily also in the connection Seinäjoki Tampere. On the tracks Ylivieska Iisalmi and Kontiomäki Oulu, the single track railroad is limiting the increase in traffic. On the Tampere Toijala connection, the busy express train and freight train traffic does not allow the development of passenger traffic in the Helsinki metropolitan area according to the targets of the municipalities, without investments in additional tracks. The connection between Riihimäki and Hyvinkää would require an additional track for goods transport only, due to the busy passenger traffic. The Tampere Seinäjoki connection is the only single track railroad section working satisfactorily, due to the adequate number of passing loops at favorable distances. The track is already loaded with passenger traffic and goods transport, and both of the traffic forms are forecast to increase significantly. Without investing in a second track or increasing the number of loops and changing the traffic structure, the capacity of the track will soon become inadequate. On the track Orivesi Jyväskylä, necessary actions are increased by the problems of today. The traffic on the track is very vulnerable due to the exchange connections in Tampere, the traffic structure, and the locations of loops. Single delays are reflected in all the traffic on the track, and the duration of the delays can be significant. The triple track connection 5 km east of Orivesi and the double track connection between Lahdenperä and Jämsä could already help to make the traffic flows smoother and more reliable. The terminal in Pasila and the national main marshalling yard in Tampere are already running at the upper limit of their capacity near the center of the town. Problems also appear in operating the bypassing traffic smoothly through the center of the town. Plans to move the Tampere main marshalling yard have been made, but no decision has been made yet. The long term plan of the Tampere region also includes a bypass track to be built through the west of Tampere. The railroad traffic will probably also be affected by the plan to cover the tracks in the center of Tampere with an area containing a sports arena and office and residential buildings. Ongoing and planned track projects The modernization of the Seinäjoki Oulu track is ongoing and will continue in stages until The improvement includes installation of a second track on the connections Seinäjoki Lapua and Kokkola Ylivieska, as well as replacement of the substructure and superstructure of the whole track. As a result of the project, the axle weight will be increased to 25 tons and the speed limit of freight transport to Phone: 15

17 km/h. In practice, this means that it will be possible to transport heavier loads at higher speeds on the track. The changes in the operating places and the new operating places enable development of transport and decrease the vulnerability of the traffic to failures. The estimated total cost of the project is almost 900 million. The ongoing development projects also include the improvements to the Seinäjoki Oulu and Lahti Luumäki tracks. The ongoing modernization of the Lielahti Kokemäki track will be completed in The safety of the track will also be improved by, for example, removing level crossings. Projects that will be realized over a longer horizon in the future include installation of a third track on the connection Tampere Toijala( Riihimäki), as well as an additional track on the Seinäjoki Tampere and Orivesi Jämsä connections. The planned western bypass track in Tampere, with the possible move of the marshalling yard, will probably be feasible in the 2040s, at the earliest. The possible new tracks related to the mining projects in northern Finland will depend on the progress of the mining projects and possible contracts with the mining companies on participating in the construction costs Railroad transport Railroad transport in Finland The annual total volume of good transport in Finland about 40 million tons. The market share of the railroads is about 25%, which is clearly more than in the EU countries on average. Rail is the most efficient alternative when transport distances are long or transport batches are large and regular. The average distance of railroad transport is about 240 km. A significant share (approx. 40%) of the railroad transport in Finland is traffic to and from Russia, of which about 75% is raw material transport from Russia to Finnish industries and about 25% transit traffic. (Finnish Transport Agency 2011a) The development of Finland's internal railroad transport has followed the production of the Finnish basic industry, especially the wood, basic metal, and chemical industries. In large volume regular material flows, railroad transport has remained rather competitive compared to other transport forms. Transit transport Transit transport in Finland is very clearly distributed between the different transport forms and transport directions. More than 90% of the transit transport to the east is road transport, whereas most of the transit transport to the west is railroad transport of different raw materials to Western Europe. The goods transported to Russia via Finland consist of cars and bulk cargo in containers. Part of the transit transport has consisted of container transport between the Far East and Finnish harbors and cargo terminals serving Russia. This type of transport, however, ended almost completely when Russia significantly raised transport tariffs in Phone: 16

18 Picture 2.4. Transport of Russian cargo in the railroad network in 2011 (Source: MTC 2013) The total transit transport volume in Finnish sea transport in 2010 was 7.4 million tons, of which 2.1 million tons was imported and 5.3 million tons exported. The major types of goods in the import transit were bulk goods in containers and new vehicles. In the import transit, ore concentrates were the largest type of goods. The transit transport is mainly concentrated in the harbors of HaminaKotka, Helsinki, Hanko, and Kokkola. Table 2.1. The total volume of Russian foreign trade transport in 2011 and forecast for 2020 and 2030 (bill. ton kilometers) (Source: MTC 2013) Foreign trade Year transports, billion tonkm/a Road transport Railroad transport Sea transport In total The volume of the transit traffic on the railroads in 2010 was 4.8 million tons. Almost all the transit transport headed from east to west. During the last few years, the two most important railroad transit flows have been the pellets of Kostamus from Vartius to the harbor in Kokkola, and chemicals transit through the HaminaKotka harbor. Phone: 17

19 3. DEVELOPMENT POTENTIAL AND FORECAST FOR THE RAILROAD TRANSPORT AND RAILROAD NETWORK 3.1. The general basis and objectives for development Due to the long term amortization time of track investments, long term volume and production forecasts are needed as a basis for the development scenarios. At this time, forecasting the railroad transport volumes is difficult due to the ongoing global industrial structural change and its impacts on the future of the basic industry in Finland. The substantial questions also include the scope of the mining industry in the next decades and its transport needs. Picture 3.1 describes the variables of business and society affecting the demand for railroad transport. Picture 3.1. Factors affecting the demand for railroad transport (Source: Transport Agency 2012b) Forecasting the internal Finnish transport volumes is difficult due to direct impacts of the tax policy on the transport volumes of the different energy fuels (wood, peat, coal, oil, gas, waste, etc.) and the development of the price competitiveness of the railroads compared to road transport. The restrictive requirements of the emission and climate policy also affect the industrial development and price competition between the transport forms in Finland. Phone: 18

20 The problems in the evaluation of transit transport are the large fluctuations in Russian economic development, the Russian traffic policy, the large harbor projects in Russia, and their impact on the transit transport through Finland. The railroad transport in Finland will also be affected by the consequences of Russia joining the WTO free trade area, including the lower export tariffs on wood. On the other hand, the transport volumes in favorable conditions may be huge. The EU working time legislation and the development in the Finnish work legislation may also change the competitiveness and market shares of the different transport forms. The replies of the transport entrepreneurs in the transport business future review indicated that a labor shortage is leading to restricted availability and higher prices of transport services. The regulations regarding driving and rest periods and transport regulations by type of goods were seen to complicate road transport and increase the labor demand in the transport business. On the other hand, the demand for transport services was expected to increase in the future. The decreasing total transport volume of the basic industry improves the competitiveness of flexible road transport, whereas concentration improves the competitiveness of the railroad transport, provided that the volumes in railroad transport become adequate and regular. (AKE 2009) The increasing use of LNG (liquefied natural gas) will most probably also impact railroad transport. In addition to pipelines, LNG can be transported to industrial plants on the railroad network. Railway engines using LNG fuel could replace diesel engines on non electric tracks. The Finnish Transport Agency has summarized the long term targets of the railroad network and transport, observing the restricting frame of the national economy in the following way: In the railroad traffic, adequate capacity is to be secured, the efficiency of terminal operations has to be increased, and the cost efficiency has to be improved (e.g. by increasing axle weights). o Sufficient capacity (of the network) to ensure efficient and timely transports o Improving the vital marshalling yards o Increasing the load rating of the vital transport routes According to the targets, the condition of the vital railroad network is to be maintained at the present level. The network with a 25 ton axle weight is slightly larger than today. Due to the higher load rating of the most important transport routes, the cost efficiency of the transport and transmission capacity of the network will improve. The functioning of the most important marshalling yards will be improved after The condition of tracks with little traffic will weaken and the number of traffic restrictions will increase, and the condition of yards with little traffic will weaken. The track sections with the least traffic will be closed when the condition of the section would require larger investment in renovation. Transport terminals for arranging trunk transport will be built jointly with industry in the most important raw wood supply areas. Phone: 19

21 3.2. The development prospects for railroad transport Transport volume forecast 2030 The most important increase potential in railroad transport can be seen in the transport of ore concentrates and energy wood, in combination transport and in Russian and Trans Siberian container transport. The domestic raw wood transport will also increase due to the longer transport distances in the future. In the future, the competitiveness of railroad transport will remain good, especially in strong goods flows, where dedicated trains for the customer and other direct transport can be used. The forecast total transport volume in 2020 is 45.8 million tons, where the increase from 2008 is 9%. The corresponding total haulage will increase to 12.2 billion ton kilometers (increase 13%). After 2020, a slight decrease in the total transport volume is forecast. This is a consequence of the decrease in wood industry production and in Russian raw material export through Finnish harbors. The combined transport, instead, continues to increase. Picture 3.2. The actual volumes of railroad transport by goods group in and forecast for (Source: Finnish Transport Agency 2010a) The forecast total transport volume in 2030 is 44.0 million tons, of which domestic transport is 39.5 million tons and transit transport is 4.5 million tons. The most important uncertainty factors are those regarding the realization of the mining projects in Lapland, the continued structural change in the wood industry, and Russian transit transport. The forecasts include the transport of the Sokli mine to the Bothnian Bay, but not the transport of the mines in Kolari and Hannukainen. The transport volume of the Sokli mine is estimated to be 1.5 million tons in 2020 and 2.0 tons in (Transport Agency 2012b) Phone: 20

22 The mining industry According to the Finnish mineral strategy, the mineral industry has significant potential to become a national economic support pillar, especially in regional development. A significant number of new mines have been opened in Finland in the last few years, the production in the existing mines has increased, and several mining projects are ongoing. The quarrying volume of metallic minerals is estimated to multiply by the end of the decade. The focus of the mining industry is strongly in eastern and northern Finland. (MEE 2010) In 2012, there were, in total, 12 metallic mineral mines and 31 industrial mineral mines and quarries operating in Finland. The extractive industry and further processing, technology, and research and development are an important growing business with export potential in the Finnish economy. The growth of the business also has a direct impact on transport; the increasing mine transport will affect road and railroad transport and harbors. There will be a need to develop traffic solutions. (MEE reports 12/2012) Picture 3.3. Mine vision 2020; The quarrying volume of metallic minerals is expected to multiply (Source: MEE 2010) Phone: 21

23 The report of the transport needs of the mining industry in northern Finland studied the development potential and possible route alternatives of the mining industry. The planning range of the review was the area north of Bothnia, so the work in Finland studied mainly the harbors in the Bothnian Bay. The conclusion of the work states that the mine transport of northern and eastern Finland will be carried out through the harbors in the Bothnian Bay. The development activities of the traffic infrastructure in the near future depend on how the extractive industry will develop and what will be done in the neighboring countries to improve the transport routes and, for example, utilize the connections to the Arctic Ocean. (Finnish Transport Agency 2013) Short hinterland transport does not always guarantee the minimum total cost of transport. The harbors in the Bothnian Bay are located quite near many planned mines. Longer transport to more southern harbors may, however, be more profitable, if the sea transport connection and cargo handling costs are lower. The size of the vessels also affects the cost efficiency of the mine transport. In addition, the ice conditions affect the costs and timetables of sea transport. Picture 3.4 shows the ice map of Finland's sea areas as the long term average ice cover in March. The harbors of Tornio, Kemi, and Oulu typically have traffic limitations for almost 5 months and even Kokkola for about 3.5 months. As an example, the Port of Pori typically has traffic limitations for less than 3 months. Picture 3.4. The ice map of Finland's sea areas, the long term average ice cover in March (edited from the maps of SMHI and FMA). As further actions of the transport need report on the mining industry, it has been suggested for the next few years to come (1 5 years) that, for example, further investigation and planning of the present Phone: 22

24 transport connections regarding the expected increase in mine transport should be started. Referring to this, the report also mentions the transmission capacity of the track sections Ylivieska Oulu Kemi and Vartius Oulu, and increasing the capacity and deepening the sea routes of the harbors in the Bothnian Bay. (Finnish Transport Agency 2013) The uncertainty factors are emphasized in the loading forecasts by track section. The greatest uncertainty in terms of transport volume regards the transport of the Sokli mining project. If the planned mine in Sokli is not realized or the transport is routed through Russia, the forecast transport on the route Savukoski Kelloselkä Rovaniemi Laurila Kemi will decrease by 1.5 million tons in 2020 and by 2.0 million tons in Regarding the Hannukainen mine in Kolari, the assumption was that it will not create a transport need in the present railroad network in Finland. The assumption was based on the uncertainty regarding the opening of the mine and the mining company's decision to arrange transport for the Pajala mine through Narvik. It is also possible that the mine will be opened and that at least some of the ore concentrate will be transported through the harbors in the Bothnian Bay. The project program of the Finnish Transport Agency mentions development of the mine connections and projects that are important for the industrial policy. Decisions on these projects will be made separately Wood industry and wood transport In 2010, the average long haul transport distance of domestic wood was 166 kilometers. The share of road transport directly to the factory was 73 per cent. In 2010, raw wood was transported by a monthly average of 1,330 log trucks, which was one fifth more than in The average transport distance from the buffer stock to the factory was 110 kilometers. The share of railroad transport was 25%, and the remaining 3% was water transport. The average transport distance in railroad transport was 315 kilometers. This transport included an average truck transport of kilometers at the beginning of the transport chain. (Metla ) Share by transport form % 200% 100% 0% Share of the total haulage, proportional change compared to the level in Road transport Railroad transport Road transport Railroad transport Water transport Water transport Picture 3.5. The share of the total haulage in long haul transports of raw wood by transport form in and the proportional change in the share of the total haulage in long haul transport of raw wood compared to the level in 1985 (Source: Metla 2011, 2012) Phone: 23

25 As shown in Picture 3.5, the share of railroad transport in the total haulage for long haul transport of raw wood has increased significantly since The share of road transport, however, has remained almost the same. At the same time, the unit costs of railroad transport have remained almost the same, while the unit costs of road transport have increased. The average cost of direct delivery by truck to the factory in 2011 was 7.2 cents per cubic meter of wood and kilometer of distance. In railroad transport, the corresponding unit cost was 2.3 cents. cent/m 3 km Unit cost, long haul transport Road transport Railroad transport Water transport Picture 3.6. The unit cost in long haul transport of raw wood in (Source: Metla 2011, 2012) The major part of the long haul transport of raw wood is road transport, but the railroad s share of total haulage has increased. The unit cost of railroad transport is significantly lower than that of road transport. Thus, railroad transport is the most cost efficient alternative for long haul transportation of domestic wood, where it is available. According to the research ordered by the Finnish Transport Agency, the present model of operating railroad transport of wood by picking up from a large number of small loading places and transporting to a large number of small loading places causes a significant need for work in switching and slows down wagon cycling. The research defined an extension of the terminal and loading place network suitable for the operating environment in Finland and the economically optimal locations of the terminals and loading places. (Transport Agency 2011b) Picture 3.7 shows the target status of the raw wood terminal and raw wood loading place network in 2018, according to the raw wood terminal research. If the Pori Parkano Haapamäki track section was reopened for traffic, the planned raw wood terminal in Parkano would have a direct connection from both the raw wood loading place in Pori and the raw wood loading place in Haapamäki. Phone: 24

26 Picture 3.7. The raw wood terminal (red) and raw wood loading places (blue) according to the target status in The rest of the present loading places (grey) are available until their use requires investments in the railroad network. (Source: Transport Agency 2011b) Phone: 25

27 Picture 3.8. The impact of operational development of the terminal and loading place network on the loads of the railroad network (ton/year). The red color means an increase in transport and green means a decrease in transport. (Source: Transport Agency 2011b) The changes, however, transfer transport to the section of the main track that is already running at the upper level of its capacity. It is not possible to increase the capacity without large investments. Picture 3.8 shows the impacts of the operational development of the terminal and loading place network on the loads in the railroad network. Realizing the target status decreases especially transport in the railroad network in Central Finland, and respectively increases transport on the main track between Riihimäki and Seinäjoki and in the sections Riihimäki Lahti Kouvola and Siilinjärvi Viinijärvi Joensuu. While railroad transport decreases, road transport increases in the road network of Central Finland. (Transport Agency 2011b) Phone: 26

28 Fuel transport to energy supply and industrial processes At the end of 2008, the European Union decided on the target of decreasing greenhouse emissions by 20% and increasing the share of renewable energy to 20% by the end of In accordance with the EU climate change policy, Finland is committed to increasing the share of renewable energy by 38 TWh by The target increase of renewable energy in Finland can be reached, for example, by developing the use of forest processed chips. The target set in Finland's long term energy and climate change strategy is to increase the use of forest processed chips from the present level of about 4 5 million cubic meters to 12 million cubic meters by Achieving the target requires the development of new power plants using wood as fuel in our country. According to the reviews carried out, the number of power plants using wood as fuel would total up to 550, with a total technical wood consumption potential of about 52 TWh by the end of this decade. At the maximum, it is possible to cover about 28 TWh of this with logging waste and small dimensioned wood. At present and in the future as well, the majority of energy wood transport will be road transport, because most of it is short, meaning less than about 100 km. Along with the expanding volumes, buffer and terminal stock operations will increase and part of the roadside chipping today will be carried out at terminals. In an operating model like this, the competitiveness of railroad transport is estimated to improve. The emission allowance price also affects the competitiveness of railroad transport. The demand for energy wood increases when the emission allowance price goes up, because the cost effectiveness of alternative fuel (mostly peat) weakens. The competition for energy wood then increases and transport distances become longer. The start of railroad transport of forest processed chips requires development of the transport system and building of peat terminal sites. The interest in renewable energy also creates new business opportunities for the wood industry. The wood industry has several ongoing biofuel projects developing new technology based on wood and chips. Biofuel production requires large volumes of raw material. As an example, a typical plant producing an annual amount of about 200,000 tons of biofuel requires a biomass of 4.2 TWh/year, corresponding to about 1.5 million tons of wood energy. In the event of the project possibly being realized, road, water, and railroad transport will all probably be used. As a new efficient and clean energy, the use of liquefied natural gas (LNG) is increasing in Finland. Due to the tightening sulfur emission requirements of marine engines, LNG is a good solution as fuel in new engines. Liquefied natural gas is also well suited as a fuel or alternative fuel in industrial and power plants. For wider introduction of LNG in Finland, the required infrastructure needs to be built. It includes transport equipment suitable for the conditions of the Baltic Sea, import terminals, distribution equipment, and an adequate number of storage tanks. In South Finland, at least one large scale terminal and several smaller terminals located in harbors are being planned. The Port of Pori is a well suited location for a terminal in the southern Gulf of Bothnia, due to its navigation conditions and infrastructure. In Tahkoluoto in the Port of Pori, an LNG terminal is being planned for the needs of the industry in Satakunta. Phone: 27

29 Russian transport and transit transport The transport flows between Finland and Russia are dependent on economic development not only in Finland and Russia, but also in the rest of the world, both directly and indirectly. The volume of transport between Russia and Finland in 2030 and the investments required in the transport infrastructure fluctuate strongly depending on the growth rate of the world economy. The growth rate of the world economy has a substantial impact on the demand and price development of oil, which in turn affects the Russian market demand and imports from Finland. (MTC 2013) Table 3.1. The Russian export and import volumes 2000 and 2011, and forecasts for 2020 and 2030 (millions of tons/year excl. gas and electricity) (Source: MTC 2013) Russian foreign trade Million tons/a Growth % Growth % / /2030 Export Finland EU excl. Finland Rest of the world Export in total Index Import Finland EU excl. Finland Rest of the world Import in total Index The share of transit transport is significant in the goods flows between Finland and Russia. Many forecasts refer to the possibility that the transit traffic through Finland will decrease; the main reason would be the increasing capacity and operational efficiency in Russian harbors. At the same time, however, the transit traffic can also be seen as increasing over a period of 10 or 20 years. The routes through Finland are seen as smooth and safe, which makes then attractive. (MTC 2013) Picture 3.9. The goods transport volume at border crossing places in 2011, and forecasts for 2020 and 2030, 1000 tons (Source: MTC 2013) Phone: 28

30 According to the forecast, the Russian total haulage in the Baltic Sea and the North Sea would increase by 20% by 2020 and by about 70% by The Russian total haulage in the Finnish road and railroad networks would increase correspondingly. In the Finnish railroad network, Russian transport forms about 30 35% of the total haulage. The forecast increase in railroad transport is significantly less than that in road transport. (Source: MTC 2013) At the moment, the picture of the future of transit transport through Finland is unclear. If the Russian transport volumes increase as the forecasts suggest, the possibilities of success are good. Then the Finnish investments in capacity and service will have been correct. If the forecast increase turns out to be too optimistic, then the Finnish harbors will be overtaken by the harbors in Bronka and Ust Luga. Then the role of Finland can be expected to be mostly balancing peaks in demand. What makes this difficult for Finland is that it cannot be influenced by Finland to any great extent. (MTC 2013) The railroad passenger traffic volume is forecast to double by 2020 and triple by This means that the number of daily scheduled trains should be doubled or the Allegro trains should be combined in several units, but this is prohibited by the other existing traffic on the eastern track. An alternative is to build an additional track, but the bottleneck still remains in the capacity of the Helsinki marshalling yard. (MTC 2013) The development of goods transport to and from Russia depends strongly on the transit contracts between companies and the development of the Russian economic policy in the next decades, which is difficult to predict. Transit transport is especially important for the transport volumes on the Vartius track, because ending the transit transport would end the traffic over that border crossing almost completely The transport volumes of the Vainikkala connection are not as sensitive to certain individual transport contracts; instead, the development of transport volumes is affected by several factors, such as the general development of trade between Finland and Russia, Russian export tariffs on raw wood, and the competitiveness of transit traffic. The transport volumes of the border crossing places in Imatrankoski and Niirala are affected especially by issues regarding the import of raw wood. The planned direct railroad connection Losevo Kamennogorsk may affect the routing of transport between Finland and Russia in the long run, provided that the twintrack connection Luumäki Imatra and the triple track connection to Imatrankoski have been built and the border crossing in Imatrankoski has been opened to international traffic Traffic and climate change policy The white paper of the EU traffic policy mentions the target to move road transport longer than 300 km to other traffic forms with the help of efficient and environmentally friendly freight corridors. The targets mentioned are 30% of such transport by 2030 and 50% by The prerequisites for achieving this include development of the required infrastructure. (The European Commission 2011) Especially in the large volume products, railroad transport is a socially more cost efficient alternative, for example regarding emissions. However, the traffic form will be determined by the markets: the lowestprice tender wins. Thus, railroad transport must be made genuinely more cost efficient than road transport to the buying customers. Opening railroad transport to free competition may strengthen the development towards the goals set by the EU. Phone: 29

31 For one s part, diversification and growth of railroad transport ease the challenges Finnish road transportation companies have brought up: drivers aging, recruiting of new drivers to the business and rising fuel prices. Several logistics experts also predict that demand for road transport will increase strongly when the sulfur directive comes into effect. The target of the renewed air pollution prevention annex (VI) of the MARPOL 73/78 convention, approved by the marine environment protection committee of the IMO on October 9, 2008, is to limit the nitrogen and sulfur oxide emissions from ships. The limit of sulfur content in the fuel has been lowered in the special zones covering the Baltic Sea, the North Sea, and the English Channel from 1.5% to 1.0% as of July 1, 2010, and will be lowered to 0.1% at the beginning of At a global level, the highest allowed sulfur content in the fuel was lowered in 2012 from 4.5% to 3.5% and will be lowered in 2020 or 2025 at the latest to 0.5%. In practice, switching to a fuel with a maximum 0.1% sulfur content means that vessels have to start using gasoil (MGO) as fuel or using so called scrubbers, which are challenging to install in all vessel types. In addition, scrubbers may cut the ship's freight space and disturb its stability of running in some cases. Gasoil is substantially more expensive than heavy fuel oil because of its production process. According to experts, the exhaust gases of ships bring substantially more eutrophicating nitrogen to the Baltic Sea annually than waste water emissions. Almost 10% (16,000 tons) of the nitrogen depositions in the Baltic Sea come from the emissions of ships. The new sulfur emission regulations of the IMO enable reduction of these particle emissions through tighter quality requirements for fuel. It has been estimated that the sulfur emissions of international marine traffic increasing at the present rate will exceed the emissions from land by In spring 2008, the IMO started work on planning actions to reduce the greenhouse gas emissions of shipping. For the Copenhagen Climate Change Conference, the IMO is preparing technical actions to reduce carbon dioxide (CO2) emissions, such as the energy efficiency index of new ships, financial regulation methods, and voluntary actions. (Statement of the Traffic and communications committee 23/2009 on the Finnish Government's report concerning the challenges of the Baltic Sea and the Baltic Sea policy 2009) The planned emission limits acceptable per se will cause an increase in the fuel and other costs of the shipping companies, thus increasing the costs of Finnish foreign trade. The newly published estimate of the Ministry of Employment and the Economy regarding the costs caused by the sulfur directive is 600 million per year. The largest cost increases will be caused to the wood and chemical industries. According to the opinion of trade and industry, it is essential that this cost is compensated in full by national actions; failing to do so will jeopardize up to 5,000 jobs in the Finnish export industry. Effective means include the compensation acceptable in the EU emission trading directive, a full energy tax refund, and a number of actions for decreasing logistics costs. According to the Confederation of Finnish Industries (EK), however, these actions are not adequate for full compensation; additional actions to strengthen the competitiveness of the business are needed. The Government discussed the compensations related to the sulfur directive in the budget frame meeting of spring 2013, but nothing has been decided yet. As part of the support package, the Government decided in the budget frame meeting to lighten the cost burden of the industry by significantly decreasing the future windfall tax, to support the realization of the LNG terminal and to continue the regional transport support. Other possible forms of support are to be decided later, in the context of the actual budget handling. Phone: 30

32 In the longer term, the new emission limits of ships due from the beginning of 2015 mean a more rapid renewal of fleets and an increasing size of vessels. Phone: 31

33 4. IMPROVENT OF THE PORI PARKANO HAAPAMÄKI TRACK SECTION 4.1. The present status The object of planning is the Pori Parkano Haapamäki track section, of which the lengths Ruosniemi Niinisalo (55.3 km) and Kihniö Haapamäki (70.5 km) have been closed. The total length of the track section is km. The Haapamäki Pori track was closed in the 1980s. The track was not pulled up after closing; instead it was used for, for example, museum traffic. However, all traffic had to be removed in 1995, when the bridges of the track were lifted aside to give way to road traffic. Picture 4.1. The Pori Parkano Haapamäki connection. The Pori Ruosniemi connection has K43 rails and wood ties; the supporting layer is of railroad gravel. The speed rating is 20 km/h for axle weights 250 kn. The length of the connection is 9 km and traffic on the track is allowed as relay only. The Niinisalo Parkano Kihniö connection has rails of type K30. The section has wood ties and the supporting layer is of railroad ballast. The speed rating of the present section is 30 km/h for axle weights 200 kn. The traffic on the Niinisalo Parkano track is mainly troop and equipment transport for the Finnish Defense Forces. On the Parkano Kihniö connection, there is occasional wood transport. The Haapamäki Jyväskylä track section is a single track non electrified railroad with a speed limit of 100 km/h and a maximum axle weight of 225 kn. Phone: 32

34 The exact number of level crossings in the closed sections is not known. On the Pori Ruosniemi section, there are 3 level crossings, and on the Niinisalo Kihniö connection there are 88. On some level crossings in the closed sections, the road paving has been laid over the rails. There are 72 bridges. In some places, the bridges have been removed completely, while in other places the steel beams have been replaced with a wooden flooring to increase the bridge opening. The need for strengthening of the bed is not known with certainty. In principle, reopening of the track is possible with a rapid time schedule, because there are no obstacles to it from planning, land ownership, or environmental license points of view Alternative action plans and cost estimate Two alternatives were investigated in the study. In alternative 1, the technical level is mainly the same as in the track from Haapamäki towards Jyväskylä; all sections of the Pori Haapamäki connection will be improved to a unified technical level. Alternative 2 is the minimum level, at which the closed railroad sections can be reopened, and the present open sections would remain as they are. The cost estimate is preliminary and has to be updated as the planning proceeds to all details. In the cost estimate, costs have been estimated for two alternatives, representing two different quality levels. The costs have been calculated using the Fore project calculation application. Alternative 1 Mainly the same technical level as in the track from Haapamäki towards Jyväskylä, single track, nonelectric, and speed level 100 km/h for axle weight 225 kn. All sections of the Pori Haapamäki track would be improved to a uniform technical level and new passing loops would be built in the closed sections. For bridges, the renovation of the deck is suggested as the minimum. Activities required on level crossings and in subgrade reinforcement have been estimated roughly. Table 4.1. Preliminary cost estimate, alternative 1 Project divisions Pori Ruosniemi (8.7 km) 1,200 /rd m Ruosniemi Niinisalo (55.3 km) 1,400 /rd m Niinisalo Parkano Kihniö (58.2 km) /rd m Kihniö Haapamäki (70.5 km) 1,700 /rd m Total Status In use Closed In use Closed Track 7.2 million 57.6 million 61.7 million 89.7 million 216 million Safety device 2.5 million 7.9 million 3.9 million 19.3 million 34 million Bridges 0.1 million 2.0 million 2.7 million 3.3 million 8 million Geo technology 2.5 million 2.0 million 5.0 million 10 million Level crossings 0.0 million 5.0 million 1.0 million 5.0 million 11 million Total 10 million 75 million 71 million 122 million 279 million Contractor 20.0% 55.8 million Planning 7.5 % 20.1 million Developer 5.0% 13.9 million Risk premium (15%): 55 million Project total (VAT 0) 369 million Phone: 33

35 Alternative 2 Alternative 2 is the minimum level to reopen the closed track sections. In the track section Pori Ruosniemi, replacement of the rails and ties only will be carried out. In the closed Ruosniemi Niinisalo track section, the same actions as in alternative 1 will be carried out, with the exception that there is only one passing loop in this section. In the Niinisalo Parkano track section, no other actions have been suggested, except for rail and switch arrangements at the Parkano operating place. In the track section Parkano Kihniö, replacement of rails and ties, as well as adding ballast, will be needed. In the Kihniö Haapamäki track section, mainly the same actions as in alternative 1 will be carried out, with the exception that there are fewer passing loops (in total 2) than in alternative 1 (in total 7). Table 4.2. Preliminary cost estimate, alternative 2 Project divisions Pori Ruosniemi (8.7 km) 800 /rdm Ruosniemi Niinisalo (55.3 km) 1,300 /rd m Niinisalo Parkano (41.8 km) 1,200 /rd m Parkano Kihniö (17.5 km) 1,000 /km Kihniö Haapamäki (70.5 km) 1,300 /rd m Total Status In use Closed In use In use Closed Track 6.8 million 56.2 millioliolion 5.0 million 18.0 mil 72.7 mil 159 million Safety device 5.8 million 6.8 million 13 million Bridges 2.0 million 3.3 million 5 million Geo technology 2.0 million 2.0 million 4 million Level crossings 5.0 million 5.0 million 10 million Total 6.8 milliolioliolion 71.0 mil 5 million 18.0 mil 89.8 mil 191 million Contractor 20.0% 38.1 million Planning 7.5 % 14.3 million Developer 5.0% 9.5 million Risk premium (15%): 38 million Project total (VAT 0) 253 million Risks in the cost estimates The cost estimate does not consider the possibility of re using the rails pulled up in the modernization of the Lielahti Kokemäki section (the Liekki project). Using these would lower the cost estimate regarding the track. Electrification has not been planned for the opening of the track. The condition of the substructure of the present railroad embankment has not been investigated and has to be determined by measurements during the more detailed planning. A substructure reinforcement need increases the costs. The condition and possible recycling of the present railway embankment when improving the track is to be investigated in more detail. The condition of the present bridges has not been investigated in more detail; instead, unit prices of repairs by type has been used in the cost estimate. The Finnish Transport Agency has bridge register cards that cover the bridges of the closed track section. In some bridge locations, the bridge has been removed completely, while in some of them, the steel beams of the bridge have been replaced with wooden flooring to increase the bridge opening. When restoring the original bridges, the impacts on the roads under them must be observed. Phone: 34

36 Picture 4.2. The Vaskuu underpass, where the steel beam bridge has been replaced with a wooden bridge for outdoor travel, and Keiturinsalmi railroad bridge were built in The impacts of opening the track on roads passing under and over, as well as on level crossings and road arrangements, has to be investigated in more detail. The regulations and guidelines regarding level crossings have become tighter since they were built, and reopening an old level crossing may require a change of the road alignment or the building of a new flyover junction. Picture 4.3. In some level crossing locations, the road has been paved over the track. The impacts of the safety devices have been considered in a light manner, for example regarding the operating points. Especially the arrangements of the Parkano operating point and intersection with the main track have to be investigated further, and the impacts on the capacity of the main track have to be studied. Intersecting with the main track may require a new shunt connection. Electrification has not been considered in the cost estimate; should the track be electrified, this must cover the whole connection to Jyväskylä. The operating point arrangements in Haapamäki also require more detailed investigation. The present connection bypasses the whole marshalling yard. More detailed conceptual images are shown in an attachment. Phone: 35

37 5. THE DEMAND FOR THE PORI HAAPAMÄKI IMATRA ROUTE 5.1. The present and potential demand If the Pori Parkano Haapamäki track was reopened, traffic on the Pori Imatra route could theoretically emerge in three different ways: 1. present railroad transport is rerouted from other tracks 2. present road transport is rerouted to railroad 3. new transport flows emerge on the track Picture 5.1. The forecast for goods transport for 2030 (Source: Finnish Transport Agency 37/2010). Potential railroad transport rerouted from the present tracks includes mostly transport from Central Finland via Tampere to Pori. The new track connection would avoid the single track Jyväskylä Tampere connection and the crowded marshalling yard in Tampere. The track connection from Pori through Parkano and Haapamäki would shorten the distance from Pori to Haapamäki by 52 kilometers and from Pori Phone: 36

38 to Jyväskylä by 15 kilometers. The high volume mine transport from northern Finland may also be more cost effective as a whole when routed by railroad to the Port of Pori for shipping out. Road transport from Central Finland and northern Pirkanmaa could be rerouted to railroad. One means of rerouting transport to the railroad network is co operation between customers in joint bulk/container transport, to create full trains. This could be facilitated by establishing inland connection terminals in potential areas. The totally new potential transport flows are discussed in Chapter 3. Of these, especially the future prospects of the mining industry are to be considered when evaluating the profitability of this project. The potential demand for the Pori Haapamäki Imatra route has also been explored by an inquiry to businesses Railroad transport of the Port of Pori The transport volume through the Port of Pori in 2012 was 3.7 million tons, of which imports were 2.1 million tons, exports 1.1 million tons, and domestic transport 0.5 million tons. During the last ten years, substantial investments have been made in the harbor infrastructure, enabling large increases in transport volumes without new investments. There are also new building sites available in the harbor area and storage space in the chemical harbor. The advantage of the harbor is good, straight, and deep sea routes for large vessels. In addition, winter navigation is easier than in many other Finnish harbors. Well suited traffic flows for the Port of Pori are, for example, large volume bulk transport of the mining and wood industries. The ice situation of an average winter is easier than that in the harbors in the Bay of Bothnia, which probably affects the cost level of transport starting even very far in the north. Approximately half of those who replied to the inquiry use the Port of Pori at present regularly or occasionally. Some of those who replied to the inquiry and who do not use the harbor did not have a need for any harbor based transport. The rest reported that the obstacle was a lack of suitable shipping routes, a bad location from their point of view, or expensive railroad transport to Pori. The lack of an east west transport connection was also mentioned as a reason not to use the Port of Pori. Phone: 37

39 Picture 5.2. Increase in the use of the Port of Pori due to reopening the Pori Parkano Haapamäki connection If the Pori Parkano Haapamäki connection was reopened, about half of those who replied estimated that their company could increase its use of the Port of Pori. A great number of those who do not use the Port of Pori at the moment could also re estimate the use of the harbor. As prerequisites of using the Port of Pori, the cost effectiveness of both the harbor operations and the railroad transport are mentioned. Additionally, transport depends on suitable ship connections and customer needs The business inquiry and interviews Respondents and use of railroad transport In connection with the study, an inquiry to business organizations was made, which was complemented by interviews. The inquiry or invitation to interview was sent to about 120 persons and 35 replies were received. Almost half of the respondents represent the mining or metal industries. In addition, there were persons representing the wood, energy, workshop, chemical, building material, electronics, oil, transport and logistics, and recycling industries. The distribution of respondents by main line of business is shown in Picture 5.3. Most of the responding companies are large, measured by the annual turnover and the number of employees; about half of the respondents reported an annual turnover of more than 100 million and a number of employees of more than 250. Replies were received from companies that have large volume transport and whose operations are rather comprehensive, that is, companies that are potential users of railroad transport. Phone: 38

40 Picture 5.3. Respondents main line of business. More than half of the respondents have used railroad transport in domestic and foreign transport, including harbor based transport and direct foreign transport across land borders. A little less than a third (27%) have not used railroad transport at all during the last 10 years. Picture 5.4. Use of railroads in different types of transport during the last 10 years Half of the respondents said that they use railroads at the moment and the other half said that they do not use them. The most common reason stated for not using railroads was the high price compared to road transport. The service level and delivery reliability of the operator was also seen as an obstacle. About half of the users of railroad transport are satisfied, and the other half are not satisfied. As reasons for not Phone: 39

41 being satisfied, issues like occasional problems with capacity and delivery reliability, low frequency of transport, decreased flexibility, and high costs were mentioned. Picture 5.5. About two thirds of the respondents have investigated their use of railroad transport during the last three years. The majority of the respondents have investigated their use of railroad transport during the last three years. The most common ways of investigation were continuous optimization and negotiations with the operator, as well as cost comparison with other transport forms. Picture 5.6. The estimated use of railroad services in 2020 among those who replied Phone: 40

42 About 40 per cent of the respondents estimated they will be using railroads in 2020 for sure, and about half of the respondents believe they will use railroads if the conditions for use improve. There were only 10% of the respondents who do not believe that they will use railroad transport in The reported reasons are missing track or goods that are not suitable for railroad transport. From the companies' point of view, the cost effectiveness of railroad transport is in direct proportion to its attractiveness. The emergence of free competition on the railroads is probably connected to achieving cost effectiveness. Besides free competition, delivery reliability and availability of transport were mentioned as important prerequisites for increasing use of railroad transport. Better railroad connections to harbors and to Russia are also prerequisites for increasing the use of railroad transport. However, the companies did not count environmental issues among the most important prerequisites. Instead, achieving the environmental and climate targets is the responsibility of the public sector applying decisions and actions to guide the private actors towards environmentally sustainable way of operations. This means that railroad transport must be made genuinely more cost effective in order to become more attractive to businesses. Picture 5.7. Prerequisites for increasing railroad transport From the operator's point of view, transport costs are increased by the multiple requirements for the rolling stock that make its approval complicated and expensive. In Finland, the rolling stock is bound by the trans European interoperability requirements, but the different gauge in Finland, however, does not enable the use of Finnish rolling stock anywhere else. The cold climate conditions also cause additional requirements for the rolling stock. Phone: 41

43 Cost effectiveness is also emphasized by the railroad operator. It is the target of the concentrated operations model to minimize expensive handling and arrangement operations. The operations model requires strong, even, and predictable basic transport flows, with large volumes and relatively long transport distances. Then, the operator's processes are more efficient, cycling of the rolling stock is faster, and transport runs more punctually and with fewer failures. From the customer's point of view at the moment, however, this means that low transport flows are difficult and expensive to get transported via railroad. Opening railroads to competition, however, is expected to increase railroad transport in general in Finland. Finding efficient customer oriented solutions could make even lower goods flows suitable for transport on railroads The use and potential demand for the Pori Haapamäki Imatrankoski track connection Demand for the Pori Haapamäki Imatra route exists. A little more than half of the respondents have or may have transport that could use the Pori Haapamäki Imatra route or a part of it. Most of them also see that the opening of the Pori Parkano Haapamäki section is sure to increase or may increase transport on the track. About a quarter of all the respondents do not see the Pori Haapamäki Imatra track or any part of it usable for transport by their company. Picture 5.8. The estimate of the respondents regarding the transport volumes and their development on the Pori Parkano Haapamäki Imatrankoski track According to the estimates of those who replied, approximately one million tons of additional transport annually could be rerouted to the Pori Haapamäki Imatra railroad track. According to the estimates, larger volumes are also possible. According to the estimates of the companies, Russian based railroad transport will increase during the next 10 years. Only a small number of the respondents believe that transport volumes are decreasing. The respondents do not actually use the Haapamäki Imatrankoski track section or part of it in their Phone: 42

44 transport to or from abroad today; only two of them said that they use the track in their transport to or from abroad. Picture 5.9. The future prospects of Russian based railroad transport in responding companies with railroad transport to Russia (in total, two thirds of the respondents). About a third of the respondents do not believe that the opening of the Pori Parkano Haapamäki connection would impact their transport routes or logistics strategy in general. One of the reasons mentioned for this is the cost and service level of railroad transport in general. Those who have a more positive view of the track connection, see it as a possible route among others, but rerouting their transport would require further investigation. Possibilities seen as interesting include speeding up transport from the north, routing from western Finland to Russia, and bypassing Tampere. Each of these is seen to improve the costefficiency and flexibility of transport. For some of the respondents, the Pori Parkano Haapamäki connection would be a clearly straighter route for certain goods, which could increase transport from the Pori region. Phone: 43

45 5.4. The modeled forecast of goods transport The Frisbee transport model The modeling and studies of the alternatives for goods transport were carried out using the Frisbee transport model. Frisbee is a strategic level transport and logistics application, which has been designed for the Ministry of Transport and Communications and covers the whole of Europe, but is focused especially on the regions of the Baltic Sea and northern Europe. The model covers the annual export and import transport volumes of the Nordic Countries and Russia in tons (as a from to matrix), by goods group, at the 2011 level and with corresponding forecast volumes for The forecast volumes for 2030 were created in the study "Transports between Finland and Russia 2020 and 2030," based on the forecasts of national economic growth. The forecast was created by ETLA. In the Frisbee model, all unit costs, or factors (market prices), affecting the choice of the route and transport form are expressed in ton kilometers and tons. These factors include operating costs, risk of damage, reliability, value of the goods, transport time, and frequency of scheduled maritime transport Scenario studies The transport model was applied to study the following alternative scenarios. Scenario 0. The present situation, demand for goods transport in 2011 Scenario 0+. Potential transport on the Pori Haapamäki track in the present situation Scenario 1. Potential transport on the Pori Haapamäki track in the demand for goods transport in 2030 Scenario 2. Potential transport on the Pori Haapamäki track in 2030, if the competitiveness of railroad transport compared to road transport has improved the service level of the Port of Pori has improved (the frequency of scheduled ships has doubled) limitations of transport through the Tampere marshalling yard Scenario 0+. With the present demand for goods transport, the Pori Haapamäki track connection would not get significant transport volumes from other tracks (Picture 5.10). Rerouting from road transport to the Port of Pori to railroad would also be minor. Reopening of the track would not have any effect in practice on the total export and import transport at the Port of Pori. Phone: 44

46 Evaluation of reopening the Pori Parkano Haapamäki railroad track Picture Transport volumes (million tons) on the track sections in the present situation (scenario 0) and in a situation where the Pori Haapamäki track would be in use (scenario 0+). Scenario 1 With the present demand for goods transport, the transport volume of the new track would be about million tons per year. With the forecast demand, the potential transport volume of the track section would be a little more than a million tons per year ( million tons) (Picture 5.11). Picture Transport volumes (million tons) on the track sections in the present situation and in the fore cast situation in which the Pori Haapamäki track would be in use. Scenario 2 If the competitiveness of railroad traffic compared to that of road traffic substantially improved, the po tential volumes on the Pori Haapamäki track in the transport situation of 2030 would increase by half a million tons per year (Picture 5.12). However, this would not have an impact on the total transport vol umes through the Port of Pori. Phone: 45