Planning and Design of Transport Infrastructure Networks in the Baltic States

Planning and Design of Transport Infrastructure Networks in the Baltic States Policy Advice

SPM5610 Planning and Design of Multi-modal infrastructure networks Yanshuang Jiang 4227824 Jonina Magnusdottir 4243145 Anne Nobel 4137602 CĂŠlĂŠnie Piccot 4247302 Jennifer Intro Analysis Wong 4258681 Problem Scenario Infrastructure & Analysis

Evaluation

Implementation

Policy Advice

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Preface This report is a product made for the course SPM5610 Planning and Design of Multi-Modal Infrastructure Networks that is part of the MSc programmes SEPAM and TIL, provided at the Delft University of Technology.

This course challenges students to think about the problems of planning and designing transport processes regarding transport infrastructure and helps students gain the skills to create effective and efficient solution strategies from a governmental perspective. This report includes a policy advice written to the European Commissioners: Commissioners of Transport, Commissioners of Environment and Regional Policy and to Commissioners of Economy. The advice concerns a development of integrated infrastructure policy with respect to transport, environment, regional economy, and urban and regional planning. The course aims to achieve a synergy between the technical knowledge concerning the content and the policy management knowledge concerning the process.

We would like to thank Dr.Ir. J.H. Baggen for providing us with the theoretical knowledge and feedback on the assignment.

Delft, 2013 Yanshuang Jiang Jonina Magnusdottir Anne Nobel Celenie Piccot Jennifer Wong

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Executive Summary

This report is written to support the EU Commissioners in developing policies that help the integration of the Baltics into the European Union and strengthen social and economic relations between Western Europe, the Baltic States and the East. This goal can be attained through the developing of transport network policy for Estonia, Latvia and Lithuania.

From the study, the analysis shows that the Baltic countries do not yet have integrated passenger and freight transportation networks connecting the countries amongst each other and with the rest of European. The important problems that are identified include poor railway connections, unacceptable travel times and problematic pollution.

Additionally, the current infrastructure has limited possibilities for diverse cargo shipment.

The policy approach in this report consists of several steps divided into 4 phases as shown in the illustration below.

Phase 1 Intro Ch. 1

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Analysis Ch. 2

Problem Ch. 3

Phase 2 Scenario Ch. 4

Phase 3

Infrastructure & Analysis Ch. 5

Evaluation Ch. 6

Phase 4 Implementation Ch. 7

Policy Advice Ch. 8

In the first phase, the problem is formulated by establishing the current situation and defining the objectives. This analysis regarding the current transportation, economic and environmental conditions yields a SWOT-matrix that forms the starting point for generating infrastructure projects in the following phases.

In the next step a simplified model is developed. In this model, it is found that economic and political conditions in the East and Europe have heavy influence the regional economic conditions of the Baltics.

These regional economic conditions influence the regional political stability as well as the transportation, geographic and demographic conditions. After clustering the factors into Eastern, European and regional factors, each factor was assigned either a low or high value and a total eight scenarios have been generated. Before the projects were expanded, three scenarios were prematurely eliminated due to a very low likelihood.

After the development of the scenarios, the SWOTmatrices were used to generate 23 infrastructure projects: 17 new or expansion projects, 3 maintenance projects and 3 follow-up projects. For each infrastructure project an estimate of its effects on the economy, the transportation, and social and demographic conditions was made.

In the next step the infrastructure projects are scored in a multi-criteria analysis against the criteria of: cost,

feasibility, economy, social and environmental impact based on the estimated effects (end of phase 2). The utility scores generated in the multi-criteria analysis are not used to eliminate projects but serve as an instrument to prioritize the infrastructure projects. By dividing the projects in a lower 33%, mid 33% and top 33%, three groups of projects are created: priority I projects, priority II projects and priority III projects.

In the sensitivity analysis it became evident that most Priority I projects are robust meaning that most Priority I projects remain Priority I projects, even when different weights of importance were assigned to each evaluating criteria.

with the use of infrastructure projects that improve connections and lower travel times. Moreover, the generated projects enable environmentally friendly modernization by using technology that minimizes pollution. Also, these projects enhance economic growth by improving possibilities for global trading and creating employment in the logistics industry.

In the final step a global planning is proposed. In this planning the new infrastructure projects in the harbors and the expansion projects in the airports are implemented first. The planning is proposed to start five years from now. This leaves more time to further analyze and research the effects of the infrastructure projects in more detail.

The EU Commissioners are advised to mandate a task force or work group to coordinate the implementation of the transport policy proposed in this policy advice. Before the implementation can be started a more thorough assessment of the social, economic and environmental consequences of the proposed infrastructure projects is required.

Additionally, a sound financial plan for the projects will have to be prepared. The proposed transport policy advice improves the current transportation system

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Table of Contents 1. Introduction 17

1.1 Introduction of the Report 19

1.2 Policy Advice Approach 20

1.2.1 Phase 1 - Problem Definition 20

1.2.2 Phase 2 - Policy Design 21

1.2.3 Phase 3 - Policy Evaluation 22

1.2.4 Phase 4 - Policy Implementation 23 2. Analysis of the current Baltic Situation 25

2.1 History of the Baltics 27

2.2 Analysis of current transportation, economic, environment situation and regional policy 28

2.2.1 Analysis regarding Directorate-General Transport 28

2.2.1.1 Transportation of Passengers & Description of the Transport Infrastructures 28

2.2.1.2 Freight Transportation and Infrastructure 34

2.2.1.3 Transportation SWOT Analysis 38

2.2.1.4 Transportation Main Problem and Objectives 39

2.2.2 Analysis regarding Directorate-General Environment and Regional Policy 40

2.2.2.1 General Environment Situation 40

2.2.2.2 Environment SWOT Analysis 41

2.2.2.3 Regional Policy for Spatial Planning 42

2.2.3 Analysis regarding Directorate-General Economy 43 2.2.3.1 Current Economy 43

2.2.3.2 Economy SWOT Analysis 45

2.2.3.3 Economic Problems and Objectives 46

2.3 Conclusions 47 3. Problem & Objectives of Transport Infrastructure 49

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3.1 Problem Statement, Goals, & Objectives 50

3.1.1 Problem Description 50

3.1.2 Problem Statement 50

3.1.3 Main Goal 50

3.1.4 Main Objectives 50

3.1.5 Objective Tree 50

3.2 Focus of the Policy Advice 52 4. Future Regional-Economic Scenarios 55

4.1 Future Global Regional-Economic Scenarios 56

4.1.1 Future Regional and International Developments 56

4.1.2 Identification of Factors that Influence the Future of the Baltic States 57

4.1.3 Development of a simplified causal model for the Baltic States 59

4.1.4 Scenario Generation 60

4.1.5 Regional-Economic Scenarios Selection 61

4.2 Scenarios Development 62

4.2.1 Scenario A: EU-Topia in 2040 63

4.2.2 Scenario B: Re-industrialization in 2040 64

4.2.3 Scenario F: Rise of the East in 2040 65

4.2.4 Scenario G: Collapse of the East in 2040 66

4.2.5 Scenario H: Depression in 2040 67 5. Transport Infrastructure Projects for the Baltic States 69

5.1 Transport Infrastrucure Projects for the Baltic States 70

5.2 Transport Infrastructure Projects for the Baltic Countries 72

5.2.1 Project 1: Rail Baltica 76

5.2.2 Project 2: Transform the Via Baltica to a Motorway 77

5.2.3 Project 3: European Gauge Regional Rail 78

5.2.4 Project 4: Russian Gauge Regional Rail 79

5.2.5 Project 5: Riga-Moscow High-Speed Rail 80

5.2.6 Project 6: Tallinn-St.Petersburg High-Speed Rail 81

5.2.7 Project 7: Development of ITS: Electronic queue management system 82

5.2.8 Project 8: New Storage Facilities in Tallinn 83

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5.2.9 Project 9: Expansion of Tallinn Airport 84

5.2.10 Project 10: New Infrastructure for Riga Airport 85

5.2.11 Project 11: New Infrastructure for Port of Tallinn 86

5.2.12 Project 12: New Infrastructure for Port of Riga 87

5.2.13 Project 13: New Infrastructure for Port of Klaipeda 88

5.2.14 Project 14: Build logistics centers 89

5.2.15 Project 15: Logistic Consolidation Centers 90

5.2.16 Project 16: Inland Waterways 91

5.2.17 Project 17: The Kaliningrad Issue 92

5.2.18 Project M1: Improvements of the Via Baltica 93

5.2.19 Project M2: Maintenance of the Via Baltica 94

5.2.20 Project M3: Improve Internal Road Quality 95

5.2.21 Project F1: Electrification of Train Network 96

5.2.22 Project F2: Traffic Information Systems 97

5.2.23 Project F3: Environmental Projects 98

5.3 Analysis of Transport Infrastructure Projects 99 6.Evaluation 103

6.1 Introduction of the MCDA 104

6.2 Defining the Criteria for the MCDA 105

6.2.1 Selection of Criteria 105

6.2.2 Weighing of the Criteria 107

6.3Choice of MCDA 108

6.3.1 Type and Precision of Available Data 108

6.3.2 Desired Output 108

6.3.3 Inter-criteria Structure and Information 108

6.3.4 Selection of MCDA Method 109

6.3.5 General Description of the Additive Utility Function Method 109

6.4 Scaling Criteria & Evaluative Transport Infrastructure Projects 110

6.4.1 Scale the Criteria 110

6.4.2 Evaluating the Projects 110

6.4.3 Choice of Comparison 110

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6.5 Calculating and Prioritizing 111

6.5.1 MCDA Analysis of all Scenarios 111

6.6 Dealing with Uncertainty - Sensitivity and Robustness 115

6.6.1 Sensitivity of Priority I Projects when given Differently Weighted Criteria 115

6.6.2 Evaluation of Transport Infrastructure Projects Robustness 116

6.7 Conclusions of the MCDA 117 7. Implementation 119

7.1 Overview of the Projects 121

7.2 Implementation Plan of the Infrastructure Projects 124

7.3 Points of Attention Regarding the Projects 129

7.4 Additional Funding & Financial Help for the Implementation of the Projects 130

7.5 Political and Social Support 131

7.5.1 Support of the European Union and it’s relation with European Union policy 131

7.5.1.1 Directorate-General Mobility and Transport: 131 7.5.1.2 Directorate-General Environment: 131

7.5.1.3 Directorate-General Regional Policy: 131

7.5.2 Political Cooperation 132

7.5.3 Social Support 132

7.6 Ex-Post Policy Evaluation 134

7.7 Conclusions 135 8. Policy Advice 137

8.1 Conclusions 138

8.2 Final Advice to the Commissioners 138 9. References 141 Appendix A - Road Network in the Baltics 148 Appendix B - Rail Networks in the Baltics 151 Appendix C - Main Baltic Rail Lines & Time Table 154 Appendix D - Airports 155 Appendix E - International Ferry Routes (Passengers) 156 Appendix F - Scenarios’ Factors for MCDA analysis 157 Appendix G - Scenario Sensitivity Analysis 172

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Index of Figures Figure 1.1: Report Structure 18 Figure 1.2 Policy cycle of the design 20 Figure 1.3 Phase 1 - Problem Definition 20 Figure 1.4 Phase 2 - Policy Design 21 Figure 1.5 Phase 3 - Policy Evaluation 22 Figure 1.6 Phase 4 - Policy Implementation 23 Figure 2.1 Map of the Baltics in relation to Europe and Russia; Source: Baltic Review 27 Figure 2.2 Map of the Baltic States and their neighboring countries; Source: Baltic Review 27 Figure 2.3 Map of the Via Baltica; Soucre: http://en.wikipedia.org/wiki/File:E67_route.svg 28 Figure 2.4 Map of the E22; Soucre: http://en.wikipedia.org/wiki/File:E22_route.png 29 Figure 2.5 Map of the International connections with the Baltic States; Source: Deutsche Bahn 2008, RRG Spatial Planning Database 29 Figure 2.6 A chart illustrating the number of passengers transported by train in 2009 in passenger/km per inhabitant; Source: Eurostat 30 Figure 2.7 Bus lines connecting the Baltics and Europe for Eurolines; Source: Eurolines 31 Figure 2.8 Map of all main airports in the Baltics 32 Figure 2.9 Passenger ferries map 33 Figure 2.10 Modal split of inland transport modes in 2009, adjusted for territoriality; Source: Eurostat, 2009 34 Figure 2.11 The Rail Baltica 35 Figure 2.12 The Global Transit Directions within the Eurasian continent; Soucre: Kovacs, 2006 35 Figure 2.13 The Global Transit Directions within the Eurasian continent; Soucre: Kovรกcs, 2006 35 Figure 2.14 Main Baltic harbors and their routes 37 Figure 2.15 Marked structure of cargo seaports in 2009 in the Baltics 37 Figure 3.1 Objective Tree 51 Figure 3.2 Policy Advice opportunities derivation 52 Figure 4.1 Stepwise scenario development 56

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Figure 4.2 Simplified causal model, relations of the economic and political conditions of the East and Europe with the regional conditions 60 Figure 4.3 The generated scenarios graphically shown on the dimensions of Regional, European and Eastern developments 61 Figure 4.4 EU-Topia Future Developments Chart 63 Figure 4.5 Re-industrialization Future Developments Chart 64 Figure 4.6 Rise of the East Future Developments Chart 65 Figure 4.7 Collapse of the East Future Developments Chart 66 Figure 4.8 Depression Developments Chart 67 Figure 5.1 Stepwise Transport Infrastructure Project Development for the Baltic States 70 Figure 5.2 Generation of the Infrastructure projects based on generated Scenarios in Chapter 4 71 Figure 5.3 Overview Map of Infrastructure Projects in the Baltics 72 Figure 5.4 Overview Map of Infrastructure Projects concerning the Baltics and neighboring countries 73 Figure 5.5 Project 1 Map 76 Figure 5.6 Project 2 Map 77 Figure 5.7 Four rail track; Source: inventingeurope.eu 78 Figure 5.8 Project 3 Map 78 Figure 5.9 Project 4 Map 79 Figure 5.10 Project 5 Map 80 Figure 5.11 Project 6 Map 81 Figure 5.12 Waiting terminal 82 Figure 5.13 Electronic queue management system; Source: Gra탑vydas Jakubauskas, 2013 82 Figure 5.14 Project 7 Map 82 Figure 5.15 Project 8 Map 83 Figure 5.16 Project 9 Map 84 Figure 5.17 Project 10 Map 85

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Figure 5.18 Project 11 Map 86 Figure 5.19 Project 12 Map 87 Figure 5.20 Project 13 Map 88 Figure 5.21 Project 14 Map 89 Figure 5.22 Project 15 Map 90 Figure 5.23 Project 16 Map 91 Figure 5.24 Project 17 Map Option 1 92 Figure 5.25 Project 17 Map Option 2 92 Figure 5.26 Project M1 Map 93 Figure 5.27 Project M2 Map 94 Figure 5.28 Project M3 Map 95 Figure 5.29 Project F1 Rail Baltica Map 96 Figure 5.30 Project F1 Internal Rail Network Map 96 Figure 5.31 E-toll and Traffic Information Machine 97 Figure 5.32 Project F3 Map 98 Figure 6.1 Stepwise Process of the Analysis and Evaluation of the Transport Infrastructure Projects based on Scenarios 104 Figure 7.1 Stepwise Process of the Implementation Plan for the Transport Infrastructure Projects 120 Figure 7.2 Overview of the Projects connecting the Baltics to Europe 123 Figure 7.3 Overview of the Projects within the Baltics 123 Figure 7.4 Gantt chart of the Implementation Plan for Projects in the Scenario EU-Topia 125 Figure 7.5 Gantt chart of the Implementation Plan for Projects in the Scenario Re-industrialization 126 Figure 7.6 Gantt chart of the Implementation Plan for Projects in the Scenario Rise of the East 127 Figure 7.7 Gantt chart of the Implementation Plan for Projects in the Scenario Collapse of the East 128 Figure 7.8 Gantt chart of the Implementation Plan for Projects in the Scenario Depression 128 Figure A.1 Main road network of Estonia 148

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Figure A.2 Main road network of Latvia 149 Figure A.3 Main road network of Lithuania 150 Figure A.4 Main rail network of Estonia 151 Figure A.5 Main rail network of Latvia 152 Figure A.6 Main rail network of Lithuania 153 Figure A.7 All flights routes to and from Vilnius Airport in Latvia - one of the major current airport hubs in the Baltics 155

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Index of Tables Table 2.1 Country characteristics Source; CIA factbook 27 Table 2.2 Modal split of inland passenger transport of 2010 in %; Source: Eurostat 28 Table 2.4 Busiest airport for passenger traffic; Source: Wilkipedia, Riga International Airport 31 Table 2.3 Routes and frequency for Ecolines 31 Table 2.5 Air passengers transport; Source: Eurostat 32 Table 2.6 Sea passenger traffic 2010; Source: Eurostat 33 Table 2.7 Modal split of transport performance of inland modes in 2009; Source: Eurostat 2009 36 Table 2.8 Transportation SWOT analysis 38 Table 2.9 Environment SWOT analysis 41 Table 2.10 Economy SWOT analysis 45 Table 4.1 Cluster of influencing factors 58 Table 4.2 Assumptions and implications for the causal model 59 Table 4.3 Generation of scenarios based on Low / High values 61 Table 4.4 An overview of the context of each generated scenario 62 Table 5.1 Chart of all New and Expansion Infrastructure Projects Proposed 74 Table 5.2 Chart of all Maintenance and Follow-Up Infrastructure Projects Proposed 75 Table 5.3 Factors determining the effects of each scenario 99 Table 5.4 All indicators used to measure the effects for each infrastructure project 100 Table 5.5 Infrastructure Projects per Scenario 101 Table 6.1 Criteria and their relational indicators (continued on next page) 105 Table 6.1 (continued) Criteria and their relational indicators 106 Table 6.2 Weight of the Criteria 107 Table 6.3 Different evaluation methods 109 Table 6.4 The Scaling of the Qualitative Data to Quantitative Data 110 Table 6.5 Scoring of the Infrastructure Projects for the Scenario: EU-Topia 111

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Table 6.6 Scoring of the Infrastructure Projects for the Scenario: Re-Industrialization 112 Table 6.7 Scoring of the Infrastructure Projects for the Scenario: Rise of the East 112 Table 6.8 Scoring of the Infrastructure Projects for the Scenario: Collapse of the East 113 Table 6.9 Scoring of the Infrastructure Projects for the Scenario: Depression 113 Table 6.10 Priority ranking for projects from Scenario EU-topia 114 Table 6.11 Priority ranking for projects from Scenario Re-industrialization 114 Table 6.12 Priority ranking for projects from Scenario Rise of the East 114 Table 6.13 Priority ranking for projects from Scenario Collapse of the East 114 Table 6.14 Priority ranking for projects from Scenario Depression 114 Table 6.15 Projects taken out of Priority 1 due to Sensitivity analysis. 115 Table 7.1 Part 1 : Overview chart of all New and Expansion Projects 121 Table 7.2 Part 2 : Overview chart of all New and Expansion Projects 122 Table 7.3: Overview chart of all Maintenance and Follow-Up Projects 123 Table 7.4 Strategic Management Plan list of Stakeholders and How to Approach 133 Table 7.5 List of Objectives and their Key Performance Indicators (KPIs) 134 Table 8.1 All infrastructures are prioritized 139 Table A.1 Baltic & International Rail Lines, Frequency and Travel Time 154 Table A.2 Destinations of International Ferry Routes, Frequency and Travel Time. 156 Table A.4 Sensitivity Analysis for Scenario: EU-Topia 172 Table A.5 Sensitivity Analysis for Scenario: Re-industrialization 173 Table A.6 Sensitivity Analysis for Scenario: Rise of the East 174 Table A.7 Sensitivity Analysis for Scenario: Collapse of the East 175 Table A.8 Sensitivity Analysis for Scenario: Depression 175

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1. Introduction This chapter contains the introduction of the report and the policy advice approach. In the introduction a broad description of the problem is given and the structure of the report. The policy advice approach lists the aims and methodology of every phase of the report.

Phase 1 Intro Ch. 1

Analysis Ch. 2

Figure 1.1: Report Structure

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Problem Ch. 3

Phase 2 Scenario Ch. 4

Phase 3

Infrastructure & Analysis Ch. 5

Evaluation Ch. 6

Phase 4 Implementation Ch. 7

Policy Advice Ch. 8

1.1 Introduction of the Report The developments of transport networks and infrastructures in Europe play a significant role in the development and growth of the countries’ society and economy. In order to promote European integration and liberalization of the transport sector, the European Commission has been adapting policy implementations by financing large transport projects in the recent years. For example, the Trans-European Transport Networks (TEN-T) has been leading in the adoption of new policies in the transport sector.

Currently, the European Commission has diverted its focus and subsequent investment from Southern European countries to Eastern European countries.

The Baltic States, as new members of the European Union, bring large possibilities and challenges in the development of transport networks and infrastructures, both regionally and internationally.

The Baltic States, including Estonia, Latvia and Lithuania, are located at the North-Eastern corner of Europe, bounded to the west of Russia and to the Northeast of Poland. Due to the historical issues and political changes, the Baltic countries have undergone heavy development in the last two decades. However, they are still facing many problems, especially in the transport sector. Compared to the transport developments in the Western European countries, the transport network in the Baltic States are becoming increasingly outdated and underused. In order to meet the increasing demand of transportation and economic developments, the multi-modal

Intro

Analysis

Problem

infrastructure networks need to be improved.

Presently, both passenger and freight transportation are facing problems with non-efficient railway connections, long travel times, decrease in traffic, and emission problems including air and noise pollution.

The Baltic countries are aiming to enhance the connections for passenger and cargo transit with the Western European countries. Additionally, they are able to play a significant role in logistic connections between Europe and the East in the future. The change in the global market due to the economic crisis that occurred in 2008, the improvement of the Baltic infrastructure network domestically and internationally, will be able to contribute to the stabilization of their economic growth. At the same time, the Baltics will be able to align their traffic safety standards and sustainability to those of the European Union.

This report aims to give a policy advice to the EU commissioners of Mobility and Transport, Regional Policy and Environment sectors, regarding transport infrastructure projects. After an analysis of the current situation and the opportunities of transport infrastructure developments, the policy advice will aid the Commissioners in evaluating which transport infrastructure offers the highest benefits from investments, and when and how to proceed further with the implementations.

The first section summarizes the current situation of the Baltic States in Chapter 2, followed by the problem statement, goals and objects in Chapter 3 based on the analysis. Also from the analysis we generate a list of factors that influence the social and economic development of the countries that help to create a series of future scenarios in Chapter 4 and the possible transport infrastructure projects in Chapter 5. After a short description and analysis of the possible transport infrastructures, we evaluate the projects based on a Multi-Criteria Decision Analysis (MCDA) in order to determine the priority of projects depending on scenario in Chapter 6. The resulting prioritized ranking of infrastructure projects well then be generated and a future possible implementation and planning of the infrastructures is constructed in Chapter 7. Activities like spatial planning, financing (funds and costs) and ex-post evaluations have been taken into the consideration of final advice. To conclude, the final advice to the commissioners will be given in the last section, as well as the value of the report and its limitations in Chapter 8.

By applying the policy cycle in the advice, the report is structured as follows. (Fig 1.1)

Scenario

Infrastructure & Analysis

Evaluation

Implementation

Policy Advice

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1.2 Policy Advice Approach In this report, the policy approach serves as the guideline for the structure and design of the transport policy, supporting the design and the decisions making processes that will result in the policy advice. The four main phases can be seen in Figure 1.2 and a more detail breakdown can be seen in Figure 1.1.

Phase 1: Problem Formulation

Phase 2: Policy Design

Phase 3: Policy Evaluation

Phase 4: Policy Implementation

(SWOT analysis, Problem Definition, Objective Tree)

(Brainstorming, Conceptual Model)

(Multi-Criteria Analysis)

(Gantt Chart, Ex-post Evaluation)

Figure 1.2 Policy cycle of the design

1.2.1 Phase 1 - Problem Definition

- Current Situation - SWOT analysis

Phase 1: Problem Formulation

- Opportunities - Problem Definition - Objectives and Goals

Figure 1.3 Phase 1 - Problem Definition

Aim: Formulating the problem statement and the main goal of the policy advice for Baltic States regarding to the transport infrastructure sector, as well as, defining the research questions and objectives of the infrastructure design.

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Methodology: In order to gain a comprehensive overview of the current situation in the Baltic region it is necessary to identify the problems, advantages, potential opportunities, and weaknesses of the system.

Therefore, the SWOT analysis could be an appropriate way to thoroughly analyze the development in

transport, economic and regional policy of the area.

Strengths of the analysis summarizes the advantages of current development which should be contained or enhanced for the future. Opportunities and weakness give the basic indication of the problems that need to be resolved, as well as the objectives of the design.

Threats inform the partial limits that will be considered in the design space and highlight the issues which could impede further implementation.

For next step: Problem statement will be defined according to the results of the SWOT analysis. The main goal and objectives will help to inform the set up for the design in next phase.

1.2.2 Phase 2 - Policy Design - Future regional and international development - Brainstorming - Current infrastructure studies

Phase 2: Policy Design (Brainstorming, Conceptual Model)

- Region-economic scenarios generated - Futrue infrastructure projects designed

Figure 1.4 Phase 2 - Policy Design

Aims: Generating different regional-economic scenarios and various infrastructure projects/models, to generate alternatives for the future development of the infrastructure in the Baltic States.

Methodology: In order to generate regionaleconomic scenarios, a list of the factors that affect the development of the countries is complied. Due to the different views of future development, a Brainstorming method is chosen to gather a list of all possible influencing factors. Next, the conceptual model based on explicit assumptions is developed due to the brainstorming results.

Intro

Analysis

Problem

According to the model and the previous analysis, the scenarios are generated based on a high or low indicator given to each factor. In order to specify the design into transport infrastructure design for Baltic countries, some unlikely scenarios will be eliminated.

For next step: Different infrastructure projects for the corresponding regional-economic scenarios have been generated and analyzed.

Then the infrastructure projects are generated based on the different regional economic scenarios. The previous analysis and some background studies of current infrastructures are also used to generate possible infrastructure projects. The infrastructure projects are categorized into “new and expansion infrastructures” and “maintenance and follow-up projects” for further analysis and clarity.

Scenario

Infrastructure & Analysis

Evaluation

Implementation

Policy Advice

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1.2.3 Phase 3 - Policy Evaluation - Possible fields of impact - Multi-criteria analysis - Sensitivity analysis

Phase 3: Policy Evaluation (Multi-Criteria Analysis)

- Prioritizing infrastructure projects - Robustness examined

Figure 1.5 Phase 3 - Policy Evaluation

Aims: Evaluation of the infrastructure projects per scenario in a systematic method in order to determine the priority of each project in each scenario as well as the robustness of each infrastructure project.

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Methodology: In order to choose the appropriate method to evaluate the projects, these steps are taken. First, the effects determined by the economic, geographic, transport and demographic factors of each scenarios has been analyzed. Next, based on the effects analysis, the criteria for evaluating the infrastructure projects have been defined. Because multi-criteria regarding with qualitative information would be used in the evaluation, Multi Criteria Decision Analysis (MCDA) could be a better choice. In the end a sensitivity analysis will be performed in order to test the robustness of the method and projects.

For next step: The infrastructure projects will be prioritized by MCDA and the priorities will be used for policy advice. This allows for all Commissioners to evaluate the projects based on the future scenarios.

1.2.4 Phase 4 - Policy Implementation

- Implementing plans - Funding plans - ex-post evaluation

Phase 4: Policy Implementation (Gantt Chart, Ex-post Evaluation)

- Final policy advice - Value of the design -Limitations

Figure 1.6 Phase 4 - Policy Implementation

Aims: Development of possible implementation plans per scenario, addressing the issues of evaluation, further investigation, funding issues, and political and social support.

Methodology: In order to visualize the implementation plan due to the policy evaluation results, Gantt charts are used to show the time span of the possible implementations of these infrastructure projects per scenario. Funding issues are defined based on the analysis of EU white papers and related research.

In order to understand the relationship between the actors, including political, economic, domestic, and citizens, and their possible conflicts in interests, political and social support will be analyzed by the project management team for each project because of their stakeholder knowledge.

the corresponding regional-economic scenarios have been generated and analyzed.

For next step: Different infrastructure projects for

Intro

Analysis

Problem

Scenario

Infrastructure & Analysis

Evaluation

Implementation

Policy Advice

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2. Analysis of the current Baltic Situation This chapter contains the analysis of the Baltics regarding transport, economy, environment and regional policy. In order to understand the problems of the region, a shot history overview of the Baltic countries from 1900 will be given. Then a condensed research will be formed for each Commissioner Department that will address the overview of the current situation, followed with a SWOT analysis and a small summary of main problems and opportunities.

2.1 2.2.1

Analysis regarding Directorate-General Transport

2.2.2

Analysis regarding Directorate-General Environment and Regional Policy

2.2.3

Analysis regarding Directorate-General Economy

2.3

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History of the Baltics

Conclusions

In the following chapter, an assessment of the current and previous conditions of the Baltic states over the past few decades. The chapter will begin with a brief introduction of the Baltic states and then following is an assessment of the Baltics in relation to their current Transport, Environment and Regional Policy, and Economy for the Directorate-Generals of the EU.

2.1 History of the Baltics The Baltic States, Estonia, Latvia and Lithuania, are geographically positioned between Northern Europe and Russia. If one may consider Europe as a central point, the Baltic States are in the outer periphery (Adams, Alden & Harris, 2012). The Baltics are situated in the Northeast corner of the European Union.

Baltic Sea. See Figure 2.1 and Figure 2.2.

The Baltic States have a modest population of 7 million inhabitants with a total surface area of 175,000 km2 and all three countries have a coastline along the

The republics of Estonia, Latvia and Lithuania became independent states in 1991, after being part of the Soviet regime since World War II where they suffered from Soviet dominance. The Soviet regime tried to encourage immigration of Russians into the Baltic States as to stimulate industrial development, and in hopes to lead it into further political and social integration with the Soviet Union. The Russian

Figure 2.1 Map of the Baltics in relation to Europe and Russia; Source: Baltic Review

Figure 2.2 Map of the Baltic States and their neighboring countries; Source: Baltic Review

Intro

Analysis

Problem

Scenario

Infrastructure & Analysis

Evaluation

domination was against the will of the ethnic Estonians, Latvians and Lithuanians so after a long period of political and societal struggles all three Baltic States regain their independence in the early 1990s. From that moment, the Baltic States have been working towards integration with Western Europe (U.S. Department of State, 2011). Indeed in 2004 the Baltic States became members of the European Union.

With their admission into the European Union, and with Estonia’s adoption of the Euro and Latvia and Lithuania’s efforts towards adoption of the Euro, the opportunities for the Baltic States to economically connect with others European countries has dramatically improved.

However, their relations with Russia are continuously changing. From a local perspective, the political and cultural border with Russia remains persistent due to their long history, while at an international level there is room for business across political borders (Serry & Thorez, 2011).

Table 2.1 Country characteristics Source; CIA factbook

Implementation

Policy Advice

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2.2 Analysis of current transportation, economic, environment situation and regional policy In this section an analysis of the current situation will be given along with a summary of problems and opportunities for each Commissioner. After a thorough analysis of the current situation of the Baltic States, it is clear that there are many obstacles to overcome and problems to solve in their transport and economic systems. If the Baltic States want to integrate further into the European Union a robust development policy needs to be formed.

One of the natural and renewable resources of the Baltic region is the transit (any movement of goods, resources and people through the area), which is available because of the unique geographical location of the countries.

2.2.1 Analysis regarding Directorate-General Transport This section entails the outcome of the analysis regarding passenger and freight transportation and a description of the existing transport infrastructure.

2.2.1.1 Transportation of Passengers and Description of the Transport Infrastructures First, by analysing the modal split within each of the countries (Table 2.2) it can be seen that there is a

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Table 2.2 Modal split of inland passenger transport of 2010 in %; Source: Eurostat

prevalence of transport by car, similarly as in Europe.

The share of cars is especially high in Lithuania. What can be observed in general from this table is the very low share of train, tram, and subway in comparison with the rest of Europe; only 0.7% in Lithuania whereas this is 7.1% in Europe. The reason behind the use of car over the use of public transport will be discussed later in this section.

Road Transport The quality of the road network is dispersing between the three countries. According to the World Economic Forum in 2013 the rating for the road quality ranked Estonia as 61st , Latvia as 98th, and Lithuania as 32nd.

More information about the specific road network of each country can be found in Appendix A. In the following sections, there will be a summary of the two major roads of the Baltics that are part of the International E-road network in order to study the relations of the Baltics to their neighboring countries.

Figure 2.3 Map of the Via Baltica; Soucre: http://en.wikipedia.org/wiki/File:E67_route.svg

Via Baltica (E67) The most significant road going through the three Baltic States in a North-South direction is the “Via Baltica�. (Figure 2.3)

Figure 2.4 Map of the E22; Soucre: http://en.wikipedia.org/ wiki/File:E22_route.png

The “Via Baltica” is the first transport corridor of the Baltic countries, also known as the motor road E67, providing links between European cities such as Helsinki – Tallinn – Riga – Kaunas – Warsaw/ E 77 (Riga – Kaliningrad – Gdansk). The E 67 continues through Czech Republic via Prague and Wroclaw.

E 22 The E22 is the major road going through Latvia in the West-East Direction. It starts in Great Britain and runs into the central region of Russia and traverses Great Britain, the Netherlands, Germany, Sweden, Latvia and Russia. The E22 spans a length of about 5320 km.

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Figure 2.5 Map of the International connections with the Baltic States; Source: Deutsche Bahn 2008, RRG Spatial Planning Database

Rail Each country maintains an internal railway network throughout their country. They serve the main cities of each country. More information concerning these internal networks can be found in Appendix B. In terms of gauge and train compatibility in the Baltic network, 70% of the Baltic network is made of wide gauge (1520 mm) which is not compatible with the European gauge (Transport Investment Directorate).

The European gauge only represents 30 % of the network (1435 mm). In addition, the average speed on the network is quite slow at 60 km/h, thus most of the

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time buses are a more competitive means of transport than trains. In addition, the technical standards of the track are low: there is minimal electrification, and there are rarely multiple tracks (G. Kovács, K.M. Spens, 2006). Even though the internal network connections within each country are of an acceptable level, this is not the same regarding the connections between the three countries.

There is no direct liaison between the three capitals of the Baltic countries. For instance, travel between Riga and Tallinn is only possible by train, offered only once a day during due to the timetables of trains in regards to the transfer at Valge/Valka. However, to reach Riga

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Figure 2.6 A chart illustrating the number of passengers transported by train in 2009 in passenger/km per inhabitant; Source: Eurostat

from Vilnius and the other way around an overnight stop is necessary in Daugavpils (as the train toward St- Petersburg is used to travel between Vilnius and Daugavpils). Thus to cross the borders buses are often preferable over trains.

The connection of the Baltics with Western Europe is not well developed. There is a change of gauge between the Baltic countries and Central Europe, including Poland. Poland uses the standard European size gauge whereas Baltic countries are using a wider gauge. This results in no direct link between Lithuania and Warsaw.

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If travellers want to travel from Warsaw to Vilnius by train they need to change trains at Minsk. Therefore, a traveller will need to exit the European Union and to make a stop in Belarus. This trip will takes a total of 18 hours. Traveling from Warsaw to Tallinn, the trip will take a total of 40 hours and six changes to complete the journey (Nordregio) . The table that gives a summary of the travel time by train and buses between the main cities can be found in Appendix C. However, the connection of the Baltics with Russia is quite efficient since the Baltics share the same gauge system with the Russian tracks. A table of the current passenger lines linking the Baltic countries and the

surrounding countries can be found in Appendix C, with the frequency and the time table.

Figure 2.6 shows that the three Baltic countries are have the least amount of inhabitants that use trains, both for national and international trips. With the exception of Latvia where the passengers-kilometre per inhabitant for international routes is average compared to the other European countries. This lack of rail transport is mainly due to the poor quality of the service offer and the infrastructural problem, and the change of gauge between the Baltics and Europe.

Buses Bus lines are commonly used by international passengers as it is relatively cheap and fastest ways to cross the border. International routes are so extensive and various that it is possible to travel to Latvia from almost any place in Europe. But with the advent of low-cost airlines, the number of buses has decreased considerably. Nevertheless buses remain attractive for shorter distances such as Vilnius-Riga, VilniusWarsaw or Vilnius-Minsk.

In each of the capitals you can find a bus coach terminal that hosts all the international lines: Riga International coach terminal, Tallinn Bus Station and Vilnius Bus Station.

Two main bus companies are operating in the Baltic countries: Eurolines and Ecolines. The routes of these two companies are partly described in Figure 2.7 and Table 2.2 Airport In Figure 2.8 you can see a map with the location of the different international and regional airports in the Baltics countries that operates both passengers and freight. More information concerning those airports can be found in Appendix D.

Figure 2.7 Bus lines connecting the Baltics and Europe for Eurolines; Source: Eurolines

Table 2.3 Routes and frequency for Ecolines

The passenger traffics of the five main airports of the Baltic countries are displayed in Table 2.3. In the following section, we will go over the three major airports in the Baltics.

Riga International Airport (Latvia) RIGA International Airport is the largest airport in the Baltics and the main air traffic center in this

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Table 2.4 Busiest airport for passenger traffic; Source: Wilkipedia, Riga International Airport

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region offering regular passenger, cargo and postal delivery to the cities of Europe and world. From RIGA International Airport it is possible to go to 81 destinations internationally (Riga International Airport, 2013).

Vilnius International Airport (Lithuania) It is the second busiest airport regarding the number of passengers in the Baltic countries, and the largest in Lithuania. It is one of the fastest growing airports in Europe.

Tallinn Airport (Estonia) Tallinn Airport or Lennart Meri Tallinn Airport is the largest airport in Estonia and the third in the Baltic States. It is located at 4 km from the city centre of Tallinn. It has a major geographical advantage for establishing future long haul flights between AsiaPacific and Europe.

In Table 2.5, there is a comparison on the number of air passengers per inhabitants in Europe and the Baltics States. This shows that Latvia has a high average than the European average, but Estonia and Lithuania are still below average.

Figure 2.8 Map of all main airports in the Baltics

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Table 2.5 Air passengers transport; Source: Eurostat

Ports The main ferry port is situated in Tallinn. It is one of the biggest and busiest passenger ports in the Baltic Region. More than 7 million passengers pass the Port of Tallinn’s terminal per year. Riga’s Terminal is also of importance. It can handle approximately 2000 passengers per hour. There are international ferry links to the main cities of Northern European cities, but there are also national routes in Estonia to link the islands to the mainland. The map in Figure 2.9 shows the different links and more information about them can be found in Appendix E. From Table 2.6, it is shown that there is a real market for passengers shipping in Estonia mostly due to the Tallinn-Helsinki link, while in the Latvia and Lithuania the market is almost non-existent.

Table 2.6 Sea passenger traffic 2010; Source: Eurostat

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Figure 2.9 Passenger ferries map

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2.2.1.2 Freight Transportation and Infrastructure After the political changes in beginning of 1980s in the Baltic States, a sharp decline of transport in that area happened in the early transition period. A quick revival occurred, however, not in all of the countries. This was the result partly contributed by structural changes in sea transport techniques as well as in transport infrastructure on land (Parliamentary Assembly, 2010).

However, traffic has fallen over recent years, but trade in the Baltic area will continue to expand in the years to come. To avoid further decline the Baltic countries, it must be clear that the Baltics will be a part of the new infrastructure and business agreements.

Looking at the transport infrastructure of the Baltic States, emphasis will be made in investments in rail, road and maritime transport. These are currently the most important transportation modes in the Baltics for freight transport.

Rail freight transport By only looking at internal transportation it can be noticed in Figure 2.10 that most of the goods are transported by rail. This is really contrasting with the rest of the European Union and with the modal split for passengers’ transportation in the Baltic countries.

This is due to a relatively high density of rail tracks in the Baltic States. Nonetheless, these tracks have low technical standards and are rarely multiple tracks.

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Figure 2.10 Modal split of inland transport modes in 2009, adjusted for territoriality; Source: Eurostat, 2009

See explanation of different gauge in previous Section 2.2.1.1 - Rail.

Currnetly the North-South route from the Baltics to Poland route through Kaliningrad, an enclave of Russia. This involves crossing a non-EU borders and that comes with tariffs and duties, and the route does not connect the three capitals of the Baltic States. For this reason the EU has planned to build a North-South rail connection known as the ´Rail Baltica´, with EU gauges through Tallinn, Riga, Kaunas and Warszawa.

(Kovács, 2006) See Figure 2.11.

Figure 2.12 The Global Transit Directions within the Eurasian continent; Soucre: Kovacs, 2006

As stated before, the Baltic countries have a unique geographical position. Globalisation and intensive need to integrate the Eurasian continental transport systems, including Chinese transport and logistics systems, generate opportunities for the Baltics. For example connections with the Trans-Siberian Railway as shown in Figure 2.12. The Tallinn-Saint Petersburg railway corridor is the busiest section for freight transportation in Europe (Schmitt & Dubois, 2008).

Also shown on Figure 2.13 there is more to gain in terms of time by transporting with rail instead of transporting by sea.

Figure 2.13 The Global Transit Directions within the Eurasian continent; Soucre: Kovács, 2006

Figure 2.11 The Rail Baltica

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Tkm means Tonnes-Kilometers Table 2.7 Modal split of transport performance of inland modes in 2009; Source: Eurostat 2009

Road freight transport The road density in the Baltics is one of the lowest in the EU. The percentage of paved roads is low and there are hardly any motorways except around the biggest cities. Like the railways, the East-West oriented roads are better than North-South connections.

By looking at the modal split for the global transportation of goods (internal and international as Shown in Table 2.7) it can be seen that the road usage percentage is increasing. This can be explained by the lacking and bad quality of the railway connections with the neighboring countries.

There is an evident and slow modal shift from rail to road transport. A main developmental factor for this modal shift is the change away from industrial mass production towards more customised products. The number of shipments is increasing while the freight volumes per shipment decrease.

Generally, road transport is predicted to increase significantly in the Baltics (European Commission,

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2001). Road transport accounts for 75% of freight movements in the EU (Gentry et al., 1995) and it is predicted to increase at a higher rate than any other mode of transportation If those predictions fall through, the Baltic States are in need of important new road construction work alongside the maintenance of existing roads. There is a lack of infrastructural facilities such as service and rest stations even alongside East– West connections and the plans for Via Baltica do not envisage these facilities in the conversion of the Via Baltics into a motorway.

Waterway freight transport Inland waters transport, e.g. by rivers and canals is a very energy-efficient way of transporting goods. It plays a key role in bringing goods from Europe’s busy seaports to final destinations. However, the potential of this mode of transport is not fully exploited. The Baltic States possess the conditions to explore the idea. (Eteris, 2013) So far the waterway transport of goods in the Baltic States is non-existent.

Sea freight transport

Currently seaport transport infrastructure is used to ship goods from the West to the East and vice versa. The traditional role of the Baltic ports as the Eastern window to the West has shaped the transport geography in the northern part of the region. Railway lines and roads in the three Baltic countries run east to west rather than north to south, thus serving as links to the major Baltic ports. It has a long tradition of trading with its neighbors in Northern Europe and offers a natural transit hub for trade with Russia and the EU, especially Scandinavia. The most advantageous geographical position among the competing ports is held by Riga, which in addition is at present best equipped for container traffic.

In Figure 2.14 the marked structure of cargo seaports in 2009 in the Baltics is displayed. It shows that most of the cargo goes to or comes from Russia, Sweden, Denmark and Finland and the Baltic ports are dependent on them. The total annual cargo turnover of the ports that play a dominant role in the Eastern Baltic coastal range is currently about 140 million tonnes, this represents nearly 8 per cent of total world seaborne cargo as shown in Figure 2.15.

Unfortunately, the connection of the Baltic Sea ports to the North Sea is constrained by the depth of the Danish channels and limits their competitive position. No ships drawing more than 50’ (15.2 meters) of water can enter the Baltic fully laden. This corresponds to a maximum of approximately 150,000 dwt (cape size). Ships of this size are rarely employed to carry bulk goods other than crude oil and “major” dry bulk goods, mostly iron ore and coal. At present, the corresponding depth is available only in the North

Port of Gdansk in Poland, and in Muuga near Tallinn in Estonia.

The types of seaports exist to serve liquid materials, RO–RO and container traffic. Liquid goods dominate the capacity usage at the ports as Russian oil pipelines are directed to end there. However, there has been a recent development after the Baltics joined arms with

Figure 2.14 Main Baltic harbors and their routes

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Western Europe. Due to political reasons Russia has now re-routed their pipelines to boycott the Baltic States. That is the main reason for transit decline in the Baltics.

The importance of inter-modal transportation is predicted to increase in the Baltics, as more and more unitized goods are shipped through Baltic ports instead of liquid materials that have previously been transported to and from these ports through pipelines. Port hinterlands and connections affect the competitiveness of ports. (KovĂĄcs, 2006)

Air freight transport Up until 2009 the air cargo market had been expanding in Europe and in the Baltic States but not as rapidly as passenger air transport. The growth of the air freight is mostly due to business internationalization as well as a decrease air transport costs due to improving efficiency and strong competition among air carriers.

Currently there is an ongoing initiative, Baltic.AirCargo.

Net, a EU Strategy for the Baltic Sea Region, to make the Baltic Sea Region an accessible and attractive place, and to improve internal and external transport links. (Baltic air cargo net, 2013) See infrastructure in the previous chapter 2.2.1.1 - Airport.

Figure 2.15 Marked structure of cargo seaports in 2009 in the Baltics

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Table 2.8 Transportation SWOT analysis

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Weaknesses

General 1. Improve travel time of rail connections with Russia both for passengers and freight 2. Construction of an efficient North-South rail axes 3. Develop an efficient train connections between the three countries both for freights and passengers Passengers 4. Opportunities for airports to develop as transit platform for passengers between Europe and Asia 5. Improve connections for passengers between Russia and Kaliningrad Freight 6. Become the main logistics interface region between Europe and Asia 7. Attract Cargo from China 8. Increase cargo transit in these countries by developing partnership 9. Cooperation between the Baltic harbors instead of competition 10. Growth in road transport 11. Adjustment of ports towards commercial goods.

General 1. Congestion on the main road due to freight transportation 2. Poor North-South rail and road network Passengers 3. Poor railway connections between the 3 countries 4. Non efficient railway connections with Western countries for passengers due to different gauge 5. Poor quality of road in Latvia 6. Long travel time between the main Baltic cities Freight 7. Cargo traffic has fallen during the last decade 8. Constraints regarding ship that can berth in the ports due to the depth of the Danish channels.

9. Sea transport: limited type of cargo, mostly crude oil, petroleum products.

10. Poor materials handling of the Harbor in comparison with Finland 11. Bottleneck on the rail freight network at the border Estonia-Russia, and in the port of Klaipeda.

12. Few motorways 13. Few multiple tracks for railways

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General 1. Same track gauge as Russia 2. Good West-East rail and road network Passengers 3. Good accessibility of the area by planes 4. Good passenger transportation by Ferry with Finland & Estonia 5. Good international passenger train network in each of the country Freight 6. Location of the countries for cargo transportation with Russia, Finland and Sweden 7. Coast line that allows sea traffic (Bรถhme, Hans.1998) 8. Busiest train section for freight transportation in Europe: Tallinn-StPetersburg corridor. (Schmitt & Dubois, 2008).

Opportunities

2.2.1.3 Transportation SWOT Analysis

General 1. Improvement of roads infrastructure only Freight 2. Competition with Finland and Belarus to become the logistic hub between Russia and Europe 3. Russia could reduce transit flows through the Baltic region and directs the flow of cargo into a neighbouring country. (Kirch, Aksel. 2011) Passengers 4. Decline in tourist and immigration 5. Stop of port use as means to enter the Baltic countries

2.2.1.4 Transportation Main Problem and Objectives Problems: The main problem concerning transportation of passengers is that travel times between the main cities of the Baltic countries for passengers are too long. In addition, it is most of the time faster and more practical to use buses than train due to the missing link in the network but also the relatively low speed of trains. Additionally, passenger connections with Eastern Europe via terrestrial modes are insufficient.

This is due to the difference in gauge between Baltic countries and the rest of Europe that unable direct train lines.

Objectives: • Make the Baltic countries the logistic hub between Europe and Russia-Asia, possible with all modal means.

The problems relating to the Baltics in regards to cargo is the trend that the transit traffic is declining.

That is partly due to limited variation in cargo type and the current infrastructure. There is also uncertainty in the current arrangement and relations between the Baltics with Russia. There is competition between The Baltics and Finland regarding the cargo from Russia on its way to Central Europe.

• Improve the connections with Poland and Germany.

This improvement consists mainly of reducing travel time.

• The Baltic countries have to make new alliances, attract new clients and be able to handle transit goods from all over the world.

• Connect to the Asian market.

• Improve connections between main cities within Baltic countries both for passengers and freight.

• Reduce travel time by train towards Russia for passengers and cargo.

• Improve the rail infrastructure. Change the gauge type, build multiple tracks.

• Adjust the ports to handle commercial goods and increase technical infrastructure.

• Improve road structure in order to handle the predicted increase. Make more motorways, double lanes and better service structure.

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2.2.2 Analysis regarding Directorate-General Environment and Regional Policy This chapter entails the outcome of the analysis regarding the environmental aspects and regional policy of the Baltic States. The environment aspect is conveyed separately for each country. Special attention is given to environmental effects of the transport sector.

2.2.2.1 General Environment Situation Estonia Estonia has been the largest oil shale producer and consumer in the world since the 1960s, and it carried two-third of total shale output in the world in 1980s (Raukas, 2009). “Oil shale is fine-grained sedimentary rocks containing large amount of organic matter which shale oil and combustible gas can be extracted by destructive distillation.” (World energy council, 2007) Oil shale is the most important source of energy in Estonia. However, the most toxic waste comes from the oil shale chemical industry which strongly damages the water environment and causes pollution. Power stations using oil shale generate large CO2 emissions and other green gases. Additionally, the water quality of minded areas have also been damaged a lot.

From the perspective of transport sector, the main cause of pollution are the road transport, mostly

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by cars and trucks. “Estonia uses twice as much transport fuel per unit of GDP than the average EU country” (SEI, 2011). Also, the CO2 emissions are approximately 20% above the average emission level. Even though the electric vehicles could be one of the solutions dealing with emissions, noise and air pollution, it would not be the best solution since the electricity is mostly produced by oil shale in Estonia.

On the other hand, the traffic safety has been improved significantly in the last decade, the safety indicators have been ranked among the lowest in EU countries in 2007, the government of Estonia has been focusing on improving the vehicle efficiency and decreasing emissions. Policies have been made to aim to enhance transport energy efficiency, increase public transport use and encourage cycling and walking.

Latvia In Latvia the environment has been impacted mostly by the road traffic. There are mainly three aspects of traffic and transport leading to environmental issues: traffic safety, emissions and liveability, especially in large cities like Riga and Pieriga (Tensen, 2010) Latvia has one of the worst traffic safety laws compared to other European countries. The related transport policy and infrastructures have been developed to improve the traffic safety in recent years.

25% of traffic deaths have been decreased from 2007-2008 (Tensen, 2010). According to the research from Department of Transport of Latvia, nearly 50% of fatal accidents are caused by velocity (23%), driving with alcohol (21%) and manoeuvring and aggressive driving (8%). It indicated that road users lack good

infrastructures and related developments (Tensen, 2010). On the other hand, lack of road hierarchy and traffic unsafely has strongly affected the liability of city centre and residential areas in Latvia. Most roads are directly connected to the main road, without enough guidance of through-going traffic, freight traffic brings lots of noise and emission issues. The inequity of ease of access to activity centres, like the port, shopping malls, hospitals and schools require more development of infrastructure.

From 1994 to 2008, public transport of Latvia has slightly decreased due to an increase of use in passenger cars measures. Increased fuel efficiency has not lead to the reduction of total CO2 emissions.

Road and rail transport have similar growth in CO2 emissions (Tensen, 2010). Electric vehicles and electric transport could be one of the solutions. (Additionally, increasing the use of public transport instead of passenger cars would reduce emissions.)

Lithuania Road transport plays a very important role in linking the Baltics and the EU. The total inland freight transport has continued to grow due to the reduction of rail transport (from 50% in 1995 to 38% in 2005) (Serry, 2010). The inland waterways are far less developed in Lithuania. Therefore, the transport sector in Lithuania has strongly affected the total air pollution, especially in terms of freight transport. The negative impacts on human health and environmental problems have become the barriers of development and damage the sustainability.

According to the research, the insufficient capacity

Although, several sustainable transport policies have been set up in recent years, most implementations have been delayed.

Objectives: EU commission has aimed to implement sustainable transport system and strategies by 2001. In order to balance high social and environmental costs with economic and social benefits, the concept of sustainable transport has been developed. “It will

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1. Modernization of transport with respect to environment measures 2. Develop regional transportation to create connections between main cities 3. Improvement of accessibility and road safety

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1. Good sustainable transport policy 2. Increase development of local road for accessibility

1. Traffic Safety 2. High CO2 emissions and low fuel efficiency 3. Air pollution and noise of transportation have negative effects on livability

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Problems: Traffic safety, emissions and livability are the three main environment impacts, which constrain the development of transportation infrastructure in Baltic countries. Especially since Latvia and Lithuania have been facing serious traffic safety issues in the last two decades. The blooming developments of road transport and the extension of urban areas are causing increasing growth of CO emissions. Old cars and trucks need to be replaced in order to improve the fuel efficiency. The air pollution and noise of transportation in the urban area have strongly negative effects on the residents, which also leads to the improvement of spatial planning in suburban area.

2.2.2.2 Environment SWOT Analysis

Opportunities

of streets and inadequate public transport also cause the increase of air pollutions (Serry, 2010). The development of multi-modal transportation (road and air) and the modernization of environmentally friendly transports (railways and waterways) require huge investments. At the same time, the growth of transport flows and old car fleets lead to increase emissions.

Similar with Latvia, the traffic safety is worse with a high and stable rate of accidents.

1. High improvement are required to reduce environmental impact of infrastructure 2. Oil shale industries of Estonia affect the development of electrical vehicle and related freight system 3. Sustainable transport policies are facing implementation delay

Table 2.9 Environment SWOT analysis

react to things that have gone visibly wrong with transportation policy, practice and performance.”

(Vasiliauskas, 2009) Due to the implementation of sustainable transport system from EU commission and the defined problems, objectives of Baltic region has been set out as follows (Vasiliauskas, 2009):

help economic and legal measures. (For example, more investments into the developments of bio fuel car in transport sector.)

• Transport infrastructure with less fuel consumption and less pollution should be prioritized in order to the

• Increase of the safety and service quality for both cargo and passenger transportation

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• Decrease in the air pollution, noise and emissions caused by transport

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2.2.2.3 Regional Policy for Spatial Planning Problem: Because of the dramatic economic and political changes that happened in the 1990s among Baltic regions, new constructions, systems and expansions have been building up. This contributes a lot to the economic growth, but also leaves a number of problems and challenges. Various types of old economic activities folded (former collective farm centers and mono-functional industrial/mining/military settlements) near 1980s resulted in that large areas of deserted land, abandoned housing and underused infrastructure (Garri, 2013). More and more economic activities have been developed in the suburban area, instead of the large urban center. Ten of thousands of urban residents have moved to suburban area from the inner cities in order to fit the changes (Garri, 2013).

On the other hand, in order to attract new residents and tax revenues, any kind of development in suburban municipalities are permitted, this also results in the movement of activities, and an increase in the demand of spatial planning (Garri, 2013). All these historical and cultural spatial changes in the Baltic States contribute to various spatial policies. Therefore, the main problem now is how to accelerate the processes of Europeanization of spatial planning and the convergence of regional policy. (“Europeanization is ‌ understood as the change within a member state whose motivating logic is tied to an EU policy or decision-making process. The prime concern of any Europeanization research agenda is therefore

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establishing the causal link, thereby validating the impact of the EU on domestic change.� (Ladrech, 2010)) Several researchers have been working on that, but it still needs further evaluations.

Objectives: The infrastructure network has to integrate both urban and rural areas into a national and transnational system. Therefore it is important to improve the cooperation with the other Baltic countries. At first, a fluctuating population growth desires adaptive spatial planning policy regarding passenger transport. For instance, a national public transport system becomes less viable in the case of a declining population.

Furthermore, the negative aesthetic impact on local citizens caused by infrastructure that connects the port of Riga, Ventspils and Pavilosta should be minimized.

The development of large-scale infrastructure might create resistance since Latvian citizens might not directly encounter the positive benefits of this infrastructure. A distinction between cargo and passenger transport should be made here, because better road conditions is an improvement from which local residents can directly benefit, while the high car ownership causes the construction of railways not to directly benefit residents.

In the end, most the spatial planning should be adapted into an integration form with European spatial planning policies. It will not only contribute to the Europeanization of policies, but also be helpful for

further evaluation of evolution of policies. Therefore, spatial planning should be an inclusive process, taking into account economic, social, cultural and environmental aspects of designing and planning an infrastructure network.

2.2.3 Analysis regarding Directorate-General Economy The Baltic States hold some of the most developed economies of the ‘transition countries’ in Eastern Europe since the fall of the Soviet Union in 1991. The three countries that make up the Baltics are in an ideal location for high economic growth and chance for stabilization given further help with the development of their government, structure and economy. Their fast growing economy and past austerity measures during the economic recession of 2008 have been idealized as a model for the European Union.

2.2.3.1 Current Economy The following sections will discuss the current Economy of each of the three Baltic States and an overview of their ecological relations to each other, Russia and the EU. Estonia The Estonian economy is one of the most developed economies of the Baltic States. They hold the highest GDP of the three countries with growth started from their period within the Soviet Union. Estonia had a GDP of 17 billion Euros with a 3.2 % growth for the year of 2012.

Estonia’s raising and steady economy is due to its close ties to the long-time economic partners: Sweden and Finland. These economic and social ties to these steady Northern European countries have allowed for

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the economy to continuously grow. A majority of their countries export and imports are from Sweden (16.8% exports, 10.7% imports) and Finland (15.3% exports, 15.1% imports). However, the countries still maintains close ties to Russia, with a 12.7% of exported goods and 4.1% of imported good.

Additionally, the country keeps ties with Germany (4.8% exports, 10.7% imports) as well as Latvia (9.2% exports, 10% imports) and Lithuania (5.7% exports, 9% imports). They also receive a percentage of their imports from Poland (6.6%) and China (4.4%).

Their main goods include machine and electrical equipment making up 21% of their exports. Following, they also export raw materials such as woods (9%) and metals (9%) with a lesser percentage in furniture, vehicles parts, food products, beverages, textiles and plastics. Their main imports include machine and electrical equipment, mineral fuels, chemical products, food, plastics and textiles.

Because of their location across from Finland, the country’s capital, Tallinn, also receives a high tourist rate coming from Finland (both Finnish and other nationalities). This also resulted in them being in more developed state than that of Latvia and Lithuania with more opportunities in studies and careers in Engineering, Information Technology and Electronics in addition to the industry labour for agriculture and mining. Additionally, the region around Tallinn also specializes in seafood, mainly fish, exports with access to the Baltic Sea and a sizable number of ports and fisheries located in the area.

The economy’s hardest times were during the crisis in

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2008 that brought a major slump in their industries and employment dragging the unemployment from 3.9% to 15.6%. However, even with this dramatic slump in their economy and due to their long term planning and association with a few of the major power economies in Europe, they were able to recover to the current 8.3% unemployment with a steady GDP growth.

Estonia’s location has given them a greater access in the Western and Northern European trade as well as knowledge. Their location has dramatically affected their development after the Soviet era allowing them faster and easier entrance into the European Union (2004), Euro Zone (2011) and WTO. Latvia The Latvian economy has made great progress over the past decade in terms of economic growth, and has come out as the highest in GDP growth of the European Union in 2012. They held a 5.6% GDP increase with GDP of 20 billion Euros.

Unlike Estonia, Latvia’s main economic ties are not with major European economic powerhouses; rather they hold a close relationship with Lithuania, Estonia, and Russia. Their ties to the other two Baltic countries have allowed the countries to greatly benefit and hold stable during their post-Soviet years.

After their exit from the Soviet Union, Latvia opted to dive into an economy boom based on their country’s credit, which led to a major slump right after their ascension into the EU during the economic crisis.

After years or austerity measures in the country, after the economic recession, the country has bounced

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back faster than any other country before and now holds the highest growth rate in Europe, even with a decline in their population.

The country is now on the brink of entering the Euro Zone, and can possibly do so by 2013. However, because of the citizen’s pride, there are many protests among the people to not enter the Euro Zone and keep the Lat. Many citizens believe that this ‘westernization’ of their country is commercializing the country for EU gain. (freepolicybriefs.org) Entering the Euro Zone can mean further stabilization for the country by a stabilization of the inflation rates of their currency and provide easier trade deals with European countries.

Currently Latvia mainly exports and imports to Russia (18.3% exports, 9.3%), Lithuania (15% exports, 18% imports) and Estonia (12% exports, 7.5%), making them the most influential countries to the economic policies in Latvia. This pins them to the Russian economy, the biggest of their three export countries.

The highest import country for Latvia is from Lithuania, and then followed by Germany (11.5%) and then Russia, with Poland (8.1%) following with Italy (4.6%) and Finland (4.4%).

The main exports and assets of the country are it’s renewable and local resources including: agriculture, food, forestry, textiles, chemicals, mining, energy, and services. Additionally, they hold a small manufacturing and construction industry as well. Within the Baltic states, they are also the main manufacturers of Railroad cars and electronics, which can prove to be hugely beneficial in terms of Baltic transport development.

Latvia’s advantage of being the middle state between

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Estonia and Lithuania makes it a unifying country that holds the Baltic States together and helps to facilitate trade not only between the Baltic states but also between the overall scheme of European and Russian trade.

Lithuania Lithuania has been on the longest road to economic recovery of the two Baltic States due to the advantages that both Estonia and Latvia possess. However, they come out with the highest GDP of 32.9 billion Euros in 2012 with a 3.7% growth rate.

Unlike the other countries, their advantage of being located as the gateway from central Europe to the Baltics, Russia and Asia has been over looked due to the bigger roles and development in Latvia and Estonia over the past few years.

During their post-Soviet years, the country entered an economic boom that gave it the greatest GDP growth rate in the world. This allowed the country to ride the boom further and let the economic recession hit the country much later, taking the hit in 2009 instead.

Although they have become one of the slower development countries due to a majority of the younger population leaving to study and work in the Western country, they have a greater amount of knowledge base than the other two Baltic States with their knowledge in lasers, energy, and pharmaceuticals.

Their main hindrance in terms of economic growth over the past few years have been due to their main trading relations to Russia (19% exports, 32.5% imports) and Latvia (11% exports, 6.1% imports).

They hold only export ties with Estonia at 7.9%.

Although they do hold some trade with the bigger economic states in the EU such as Germany (7.9% exports, 9.8% imports), the UK (6.4% exports), and the Netherlands (5.9% exports, 5.5% imports); their current relationship does not make them major trading partners, and therefore their economy is heavily based on the Russian economy and trade. This becomes a dangerous for Latvia due to the country’s size and reliance on natural resources provided by Russia, slowing their economic growth.

Most of their exports, as with Latvia are local and renewable such as minerals, agriculture, and food.

However, they also hold a large market share in the industry of mechanics, textiles and production because of their previous knowledge from the Soviet era. This gives them the potential to once again becoming a fast booming economy given the right supplements for growth.

Weaknesses

1. High potential for economic development in the countries by strengthening relations between the Baltics and other major EU countries 2. Ideal location for transport changes between China, Russia and the EU – linking these markets for potential high growth 3. Large amount of land and untapped resources allows for larger developments for increased growth in production and service industries 4. Current trade ties with Russia can prove to be a useful asset when becoming a transit country that operates directly between Russia and the EU

1. Reliance on natural resources and little knowledge base (Latvia and Lithuania) 2. Low production industry 3. Low count of available workers because of the migration of the youth out of the country over the past few years – low skilled workmen force 4. Low knowledge economy in terms of the sciences as well as industrial work 5. Due to the Laissez-faire policy on the market imposed by the government, there is a large shadow economy operating outside of taxation and is slowly crumbling the economy of the country due to a lack of regulation 6. Citizens hold little trust in the government due to centuries of past hardships with governments such as the Soviet Union

Threats

Strengths

1. Consistent past economic, structural and political growth that has strengthened the countries since their exit of the Soviet Union 2. Location off the Baltic coast with closely available ties to Finland, Sweden and Germany – some of the EU’s biggest economic players 3. Strong financial sector due to high amounts of foreign investment into the banking and finance companies 4. High amount of SMEs operating within the countries 5. High national value and belief in their country’s success

Opportunities

2.2.3.2 Economy SWOT Analysis

1. Another recession that will shock their economy once more, making it more difficult to gain speed in economic development 2. Economic attachments to Russia’s economy causing for little benefit and slow economic, structural and political development 3. Financial sector is completely controlled by Foreign countries, although this provides stability, this can cause great weakness when it comes to country development 4. Bigger short- and long term migration of high skilled workers form the Baltic countries

Table 2.10 Economy SWOT analysis

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2.2.3.3 Economic Problems and Objectives Problems: Because of the economic waves that have hit the Baltic countries over the last decade and half, one of their major hurdles to overcome in the coming few years is a stabilization and entrance into the global market with continuous increase growth with a lower risk in entering into yet another recession. Low industrial production, lack of economy knowledge and the taxation problems are still existent. Citizens have to build up their trust in the economics and the government.

Objectives: This main goal would require a multitude of requirements from not only the economic sector, but political, transport and infrastructure as well. The first main concern would be to create a steady and growing industry with a long life span in the country ensuring a consistency in jobs offered in both labor work, skilled work and higher level management. This would also include the expansion of their research and work in the energy industry, as they are a few of the leading countries on energy independency in the EU. Additionally, this requires the education level of the countries to rise in order to provide room for citizens to fully utilize their opportunity to grow their country and start R&D hubs around their main focus areas, in this case, transport and energy.

Another important point to creation of a stabilized economy is for the Baltics to pin themselves to more stable and beneficial economies within the EU, and increase trade with these countries. Their current ties with Russia will provide as a valuable asset in the future developments, but will not provide the necessary economic growth possibilities.

The Baltic States’ economies are in a fragile state currently after their recovery from the recession. Now is the opportune moment for their further expansion and development in terms of economy, politics and infrastructure to grow as well as benefit the EU and emerge into the world economy.

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2.3 Conclusions From this analysis of the past and current situations of the Baltic States we can see the relations forming between the three areas of Transport, Environment and Regional policy, and Economy.

It is possible to deduce that a large number of the projects that have taken place over the years are a result of the Baltic States undergoing economic recovery since their freedom from the USSR. Over the years, their economic progress is significantly larger than any other ex-Soviet Union country, making them a prime target for further development and integration into the European Union.

First, the information gathered in this chapter will serve to inform the potential future scenarios that will be used to help inform the types of Transport Infrastructure Projects generated. The future scenarios will be generated in Chapter 4 after a clear statement of the Goals and Objectives in Chapter 3.

Their strategic positioning in locality and past history makes it a great model to start new Transport Infrastructure projects to increase and improve the development of Europe. The Baltic states can become a main access point Western Europe to connect to the Eastern countries, mainly Russia and China, that are high producers of everyday consumer goods.

By looking at the SWOT analysis of their Transport, both freight and cargo, Environment, and Economy, there are clear strengths and opportunities that the European Union can take advantage of in order to increase the economic growth of both the Baltic States and that of the European Union.

These SWOT analyzes will be used in Chapter 5 to formulate numerous Transport Infrastructure Projects that have the potential to create better networks, economic and political opportunities for the future.

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3. Problem & Objectives of Transport Infrastructure According to the overview of current situation in Baltic region and the SWOT analyses, a general problem statement can be formalised. The problems of multi-modal infrastructure network in this region have been summarized in the following part, from the perspective of transportation, economic and environment. Following the main goal of the policy advice will be provided as the main objectives that need to obtain in order to reach the goal. Finally, all the objectives will be recapped in an objective tree.

3.1 Problem Statement, Goals, & Objectives 3.1.1 Problem Description

3.1.3 Main Goal

The Baltics countries aim to improve the multi-modal infrastructure network that is needed for meeting the increasing demand of transportation and economic developments. Presently, both passenger and freight transportation are facing problems with nonefficient railway connection, long travel time and the loss of traffic, along with serious emission problems, air and noise pollutions. These countries wish to enhance the connections and cargo transit with other European countries and play a significant role on logistics interface between Europe and Asia. Since the economic crisis influence the global market, the improvement of the infrastructure network should contribute a stable economic growth with a lower risk.

At the same time, the high traffic safety standards and sustainability of the network should be ensured.

From this problem statement it can be derived that the main goal of the policy advice that will be given through this report is:

3.1.2 Problem Statement “There is currently a lack of an integrated transportation network infrastructure within Estonia, Latvia and Lithuania, connections amongst themselves and nearby other European Union countries.“

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“To develop the transport network systems of Estonia, Latvia, and Lithuania to better support the integration of the Baltics into the EU, and to help strengthen economic and social relations between Western Europe, the Baltics and the East (Russia and Asia).”

3.1.4 Main Objectives In order to reach the goal, two general objectives have been set up: • To overcome the existing gap between Baltic countries and the rest of the EU by building a stable, competitive and territorially integrated region within the European Union whilst preserving the national identities.

• The region has to become more environmentally sustainable, more prosperous (for example, promoting

innovation in small and medium sized businesses); more accessible and attractive (for example, improving transport connections); as well as safer and more secure (for example, enhancing accident response).

3.1.5 Objective Tree The following objective tree is aiming to provide a systematic and clear overview of objectives.

Figure 3.1 Objective Tree

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3.2 Focus of the Policy Advice In the previous part distinctions were made between transportation, economic, environmental and regional planning problems and objectives. However, in this policy advice the focus will be on making the region more accessible and attractive by improving the transport infrastructure and connections.

It is clear that the transport sector, economy sector and the environmental and regional policy sector very interconnected. They influence each other and are affected by each other. By focusing on improving the transport infrastructure and connections many objectives in each sector can be reached and opportunities present themselves. However, the sectors can work together to a common goal, the effect of an infrastructure has to be examined for each sector.

Figure 3.2 Policy Advice opportunities derivation

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4. Future RegionalEconomic Scenarios In this chapter an account is given of the stepwise development of regional-economic scenarios for the Baltic region. The structure of Paragraph 4.1 is illustrated in Figure 4.1. This leads to the scenarios in Paragraph 4.2, which form the starting point for the infrastructural models in the next chapter. Generation of the regionaleconomic scenarios

4.1 Future Global Regional-Economic Scenarios The approach that is described in the Figure 4.1 has been use to generate the scenarios.

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Describe general future developemts & Identify factors that influence the future (Appendix F)

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Cluter identified factors

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Develop conceptual model based on explicit assumptions

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Figure 4.1 Stepwise scenario development

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4.1.1 Future Regional and International Developments The Baltic States experienced a population decline of 20 percent since the beginning of its independence.

Statistical bureaus estimate that this decline will continue at least until 2050. This demographic trend results in a strong depopulation of rural areas. Further urbanization takes place as well. Especially the departure of highly educated Estonians, Lithuanians and Latvians to EU countries raises concern among policy makers (Stiller & Wedemeier, 2011).

Notwithstanding the outflow of educated laborforce, the level of education among Baltic residents remains relatively high. This is an important enabling factor for knowledge-intensive industries to grow. The concentration of universities, well-qualified labor and research facilities in the major cities (especially the capital cities) is high. This makes the cities the base from which the economies will encounter structural change in the long run.

Winkler (2006) conducted a research on tourism in the Baltic Sea Region, showing that there is relatively little tourism in the Baltic States. For instance, only the coastal area of Germany sees three times more

tourists than Latvia, Estonia and Lithuania altogether.

Moreover, these countries will not see considerable growth in the future since the Baltic States have to compete with nearby countries with far better facilities.

Globalization offers opportunities to further increase trading with other countries. The growth of export from the Baltic States to other EU countries shows that these countries are becoming more integrated into one market. The adoption of the Euro assists this process (Estonia in 2011, Latvia and Lithuania presumptively in 2014).

The ports along the coasts of Estonia, Latvia and Lithuania will remain important as volume in expected to increase until 2040. Between 4 and 22% are expected for the cargo volumes handled by the ports (Kyster-Hansen, Cardebring & Meyer-R端hle, 2009).

Contradicting the expected trend that the Baltic States move toward more knowledge-based economies, lowskilled manufacturing sees considerable increase in exports. Since a further integration with the European Union will lead to price convergence and diminish the comparative advantage, these industries are likely to run into a crisis soon. Production will then be relocated to cheaper regions such as Russia or East Asia (Stiller

& Biermann, 2012). The Baltic States can import and re-export produce from Asia to European countries in order to get around the decreasing manufacturing base in the long run.

growing on average 10,1% in three years and the European Union has access to the Russian markets made as a competence (Purju, 2004).

External developments are expected to have a big impact on the internal progress in the Baltic States (Kramer, 2012). Hence, the future of the Baltic region is to a large extent dependent on developments in the whole European Union and Russia. The export is expected to grow up to 76% until 2020 (Stiller & Biermann, 2012). The expected structural change toward knowledge-based industries will lead to intensified trade with other countries. Crossborder clustering plays an important role in enabling knowledge-based growth.

4.1.2 Identification of Factors that Influence the Future of the Baltic States

Lastly, there exists uncertainty about Russia’s willingness to cooperate with the Baltic States. Recently Russia tried to evoke tensions and sabotage the relationship between Baltic States and the European Union (Kramer, 2012). Russia’s political behavior is an important determinant of the future position of the Baltic States. With the further integration of the Baltic States with the EU it is unknown what resistance Russia will show. Nevertheless, trading between Russia and the Baltic region increased with exports

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The overview of future development shows that there is considerable economic and political uncertainty.

The economic and political conditions are of pivotal importance for the future of the Baltic States (Kramer, 2012). In a brainstorm session several factors have been identified that will play a potential role in shaping the future. Accordingly with Kramer, most factors that are identified are economic or political conditions.

States play another important role for the Baltics of the future.

Lastly, the current state of transportation is the starting point for the planning and design of an infrastructure network. Factors that belong to this cluster are for instance the state of technology and the cost of transport (influenced by fuel prices). Therefore, at each point in time the transportation conditions play a role in the future as well.

Table 4.1 on the next page shows the simplification of all factors that are clustered into 9 groups. These groups are shown in the left column.

Additionally, factors such as the preservation of national parks and environmental change are grouped under geographic conditions. These factors influence the possibilities for establishing an infrastructure network (i.e. a higher sea-level changes possibilities for ports). With the low amount of inhabitants and on-going emigration the demographics of the Baltic

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Table 4.1 Cluster of influencing factors

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4.1.3 Development of a simplified causal model for the Baltic States In the last paragraph important factors have been identified and clustered into groups. Before scenarios can be generated, a model should be developed that relates these factor groups. Because each factor group can vary, several simplifications have to be made in order to reduce the amount of degrees of freedom. Hence, the following assumptions are made shown in Table 4.2.

These assumptions lead to the following simplified causal model. This model represents a simplified reality with an essence that shows that economic and political conditions play a pivotal role in the future of the Baltic States (See 4.1.1 and 4.1.2).

In the simplified causal model in Figure 4.2 on the next page, three labels are given: Asian developments, European developments and Regional developments.

Please note that more interrelations are possible, but these go beyond the essence of the model. A wider scope for factors and relationships do not yield a better model result because it is only possible to vary a few factors.

Table 4.2 Assumptions and implications for the causal model

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4.1.4 Scenario Generation Following from Kramer’s suggestion that political and economic conditions are very important for the future of the Baltic States, combined with the regional development, scenarios can be generated by assigning different values to these variables.

For simplicity, only the values ‘low’ or ‘high’ can be assigned to each variable.

Based on the assumptions that are made explicit in the previous paragraph, it can be seen that: 1) All variables in category ‘Eastern developments’ have the same values (i.e. if political relations with Asia are low, then this is because the economic conditions in Asia are also low); 2) All variables in category ‘European developments’ have the same values (i.e. if political relations with Europe are low, then this is because the economic conditions of Europe are also low); 3) All variables in category ‘Regional developments’ have the same values (i.e., if the regional-economic conditions are low, the regional political stability is also low and, thus, the demographic, geographic and transportation conditions are also low).

Figure 4.2 Simplified causal model, relations of the economic and political conditions of the East and Europe with the regional conditions

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Hence, each of these categories has assigned either a low or a high value to all its containing factors. This 3 leads to 2 scenarios, shown in Table 4.3 Consequently, the generated scenarios can be placed in a cube as shown in Figure 4.3.

4.1.5 Regional-Economic Scenarios Selection Each scenario has a unique set of values assigned to Eastern, European and Regional developments. The generated scenarios are now briefly discussed and, if necessary, eliminated for the rest of the report if its occurrence is highly unlikely based on the context described in Chapter 2.

Table 4.3 Generation of scenarios based on Low / High values

• Scenario A exhibits a positive development on all axes and given that the Baltic States are capable of turning the global developments into positive regional developments. This scenario is plausible but optimistic.

• In scenario B the Baltic States solely rely on the East (and hence, on the former Soviet Union) for their regional conditions. As it is stated in the problem description, this is a development that is avoided by the Baltic governments. Thus, scenario B is eliminated.

• Scenario C shows favorable economic conditions in Europe that spill over into the regional conditions.

The Baltic States rely on Europe and do not maintain tight relationships with Russia and Asia. This can be seen as re-industrialization, rendering the trade with Asian countries less important. This scenario entails a bright future based on ‘Western growth’.

Figure 4.3 The generated scenarios graphically shown on the dimensions of Regional, European and Eastern developments

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• In Scenario D it is assumed that economies both in Europe and Asia are facing some difficulties, but that the regional economy of the Baltic States is prosperous. This scenario eliminated because the

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Baltic States rely so heavily on other economies that it is not possible to have economic prosperity in times of worldwide recession.

• In Scenario E both Economy in the East and Europe are doing well while the Baltic States have bad regional conditions on all axes. This scenario does not seem realistic considering the assumption that the governments of the Baltic States are capable of turning political relations with Europe and the East into favorable economic conditions. Thus, this scenario is eliminated.

• Scenario F shows reliance on the Eastern economies, since the European economy has come down. With low regional economic and political conditions, this scenario is a pessimistic but plausible scenario.

• Scenario G shows reliance on the European economy, while the Baltic States have challenges to remain politically stable and to create positive economic conditions.

• Scenario H shows a pessimistic scenario in which neither economic centers of the world have positive economic conditions. With the reliance of the Baltic States on import and export, this has far-stretching consequences for the regional conditions.

Concluding, this leads to five selected scenarios: scenario A, C, F, G, and H.

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4.2 Scenarios Development The selected scenarios for the year 2040 – scenario A, C, F, G and H are developed in this paragraph. See Table 4.4 for the respective values, a brief overview of the content of each scenario and the assigned names.

Each scenario has a set of values to Eastern, European and Regional developments. In the scenario description below, Economic and Political conditions, Geographical and Demographic conditions and Transportation conditions are discussed for each scenario. These categories correspond with the scenario factors discussed in the previous chapter and to the different fields of study dealt with since the beginning of this report.

The following sections a description of each scenario is provided along with a web diagram. In the web diagram provided the corresponding values for Eastern, European and Regional developments are shown.

Table 4.4 An overview of the context of each generated scenario

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4.2.1 Scenario A: EU-Topia in 2040 The economic prospects of both Europe and Asia are rising moving all states in Europe towards a more prosperous future. The Baltics have a chance to flourish due to their high prospects in relation to being the connection point between Europe and Asia.

Economic and Political Conditions At the end of the economic recession Asian economies started rising steadily increasing with the amount of goods being traded into the West. Western economies start to boom increasing the economy using their service industries and knowledge centers. The rate of unemployment starts to drop and the welfare costs will maintain steadily creating a more stabilized economy structure both for the West and the East. This increase in economy will help the Western countries bring more work to all class levels and expand their developing education scheme to become bigger knowledge hubs in conjunction with Eastern institutions.

With this economic upturn, the Baltic States, strategically situated between both the East and the West, will be able to steadily raise their economy with low inflation rates and high wages. This will help the Baltic States increase their trade and relations with both the Western and Eastern countries, and along with the knowledge boom across the West and East, bring new industries into the Baltics. Possibly with an increase in the industry of transport, energy and raw materials.

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With higher growth economies, the politics around the Western and Eastern worlds will start to stabilize.

Budgets will becomes less tight among countries as well as for the European Union, so expansion of networks, infrastructure, research and development will be widely available. With heavy influences from their Western counterparts, the Eastern countries will try to maintain their economic development in relation to the West through political policies and better welfare standards for their citizens.

Geographical and Demographic Conditions With the world economic boom in mind, the geographical conditions were steadily maintained within the Baltic countries. As the Baltics will be a country focused on trade of knowledge, services and a limited amount of goods, the geographical conditions of the country will remain steady and relatively untouched allowing for the current wildlife to continue flourishing.

Figure 4.4 EU-Topia Future Developments Chart

demographic inflation in the Baltic states due to the economic movement, it can be suggested that there will be a need for better transport infrastructure, not only within and among the countries, but also connecting them to both the East and West. The new trades and services will bring more commuters as well as more exports and imports to the ports, airports and train terminals. The addition of higher education knowledge centers and development centers will result in many individuals entering and leaving the countries that will cause the need for train stations and airports to accommodate for higher capacity loads with easier access to the city.

However, because of the growth of the countries’ economies, we can foresee a population increase in the countries when trade jobs, skilled work and higher knowledge centers become more present in the country. By this, we can predict denser city urban populations, which in turn may cause more pollution in their immediate environments.

Transport Conditions Because of the economic boom and the high

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4.2.2 Scenario B: Reindustrialization in 2040 The economic advantages that the East has start to decline due to the increase in labor unions and wages. Their loss of advantage has made countries in the West, their main importers; turn back to their own countries for production in a state of reindustrialization. The Baltics no longer benefit as much in terms of economic development in the East and are looking to strengthen their connections to the West.

Economic and Political Conditions As the Western economy picks up over the next few years, we can see a trend of re-industrialization in the West not only due to the need for employment, but also the increase wages and benefits demanded by the East. Although production costs will rise, the Western economy will cope with the inflation.

However, due to jobs leaving the East, the Eastern economy will dramatically decline, causing the political conditions in the East to also turn south. This causes the Baltics relations to the East to dramatically decline, and they will look more towards the East to stabilize their economy.

The Baltics will then try to strengthen their economy through trade and relations to the Western countries.

However, because of their amount of space and their current standing in the world economy, the industrialization will most shift to Eastern European countries where wages are still relatively low and where there is enough space and resources for production

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plants and factories.

This will greatly increase the amount of exports out of the country, strengthening not only economic ties to the West, but also political ties because of their rise to a more economically stable country and a bigger asset to the EU economy.

Geographical and Demographic Conditions With the increase in production and industry in the Baltics, presumably, we can predict that there will be a decline in the geographical conditions due to both depletion in the resources, more land use, and more pollution. This could cause a serious decline in the overall structure and spatial planning of the countries causing more suburban typologies to appear and a wider spread of the industry in several areas due to space and decentralization of pollution. On the other hand, economic growth creates huge opportunities for making the use of resources more efficient.

With the spill-over of technologies from European countries, this creates a positive effect for geographic conditions, in part because production is not shifted to ‘dirty’-production countries.

Although the prospect of labor and skilled workers will also increase, the concentration again will be spread out within the countries. This will cause the majority of the concentration in cities to be transport workers for both freight and passengers, knowledge centers that will be created through research fields for the areas of

Figure 4.5 Re-industrialization Future Developments Chart

industry and electricity. This will cause a polarization within the country between the richer and more highly educated urban dwellers and the lower and mid income labor/skilled workers.

Transport Conditions Transportation will become an essential infrastructure in the case of industrialization for the movement of goods to and from locations all around the country, but also of the citizens who will be working in these more remote locations. This will mainly cause a great stress on the cargo shipment by train, ship and airplane. The Baltics connection to the West becomes highly important and of great concern.

The movement of passengers, however, although important will have be improved in order to more easily allow for workers to move freely and to allow for the citizens in the knowledge centers to easily access the industry.

4.2.3 Scenario F: Rise of the East in 2040 The Baltic States find themselves in a difficult position: should European integration be pursued or are more intense relations with Russia and Asian countries a more fruitful option?

Economic and Political Conditions The economies of the Baltic States depend on developments in Asian countries. The economic stability and prosperity in European countries are disappointing, leaving the Baltic States no choice but to take the Eastern countries as their point of focus for trading. The strategic position of the Baltic States assures that they profit from importing cheap labor products made in China to European countries. The industrial capacity has decreased all over Europe, including the Baltic States, and the Eurozone has fallen apart. Combined with high unemployment and inflation deteriorating the European currencies, the dependence on Asian countries increases even further. The Baltic States see a shift toward more services industry.

Technology development occurs at a high pace in Asia. The industrial capacity of European countries – including the Baltic States – shows a negative growth.

A ‘technology push’ occurs: the ‘East’ can determine which product to feed to the Western markets.

The East-West relationship has reversed since Europe is dependent on China. Political diplomacy is under pressure and the Baltic States are ‘in between’. On the

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one hand these countries can profit from the current situation. On the other hand these countries desire to integrate with Europe. The Russian government has increased their pressure on the Baltic States. Because the Russian government controls the railway route between the Baltic States and China, it can blackmail Baltic governments. This can cause the Baltic States to examine their power position: is European integration really feasible with so much dependence on Russia and China? The expected gain from European integration is not as high as it was before. Moreover, the cultural heritage of decades of Soviet dominance has not vanished over time.

Geographical and Demographic Conditions Low economic growth in Western countries implies that there is less consumption. Hence, there is less pollution and the rate of natural depletion is lower. However, the industrial capacity has shifted toward developing and emerging countries. In these countries, the attention for environmental impact is lower. Furthermore, the growth in Asia accelerates the consumption. This leads to accelerated environmental change (such as a higher sea-level). Therefore, the environmental footprint left behind is bigger than in a high European economic growth scenario.

On a local level, the preservation of national parks gets less attention due to political turmoil. The governments and inhabitants simply have more important matters to care about. The transition toward services industry

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Figure 4.6 Rise of the East Future Developments Chart

has a positive impact on local natural depletion.

The transition to renewable energy sources has not occurred.

The depopulation of the Baltic States as a whole has stopped since political relations with Europe have taken away the possibilities for migration. Inhabitants from rural areas have moved to the urban areas at a high pace, depopulating large parts of the Baltic States and increasing pressure on the major cities.

Transport Conditions The cost of transport has increased due to pressure on the oil reserves and the lack of more sustainable and efficient energy sources. The high public debts have restrained the Baltic governments to invest in new infrastructure. Cars remain the modality of choice.

The Trans-European Network is still an objective of European countries since it a mutually beneficial, but governments have more attention for local matters.

This has hindered the development of integrated policy.

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4.2.4 Scenario G: Collapse of the East in 2040 As the Western economy rises, the Eastern economy has started to dramatically decline. Due to this sudden decline there is a great effect on the Western economy as most of their goods have in the past decades come from the East. This decline sets the West close to another recession. The Baltics should now refocus their attention to the West and gain a foothold in increasing their economy to become a major player during this time of turmoil in the West.

Economic and Political Conditions As the economy of the world between the East and West becomes more unstable, the economy of the West starts to rise due to political measurements to increase the economy. However, because of the need for increased wages and benefits of the workers in the East, the Eastern economy starts to fall. The political unrest will also rise in the East between the workers and the political figures in charge due to their unjust treatment over the years. This causes the East to close off, limiting the relations of the Baltics to the Eastern countries.

However, because of the Baltics economy is tied to their relations to the Eastern countries, the economy starts to become shaky and unstable. The economy takes on high inflation rates and lowered wages in order to compensate for their lessened trade relations.

This causes initial political instability in the country for a short period of time, until the Baltics deepen their relations to the West.

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The political stability to the West with the increasing economic stability will help the Baltic States create more economic and political stability within their own region as well. The relationships would include not only some industrial production, but also the creation of a research and development industry within the country focusing on renewable and off the grid energy. The countries will also experience higher domestic foreign investments because of their heavy ties from being a part of the EU and Estonia and Latvia’s tie to the Euro.

Geographical and Demographic Conditions Because of the minimal production that will start in the Baltic states, the geographical condition will remain fairly stable with more population increase in the major urban city centers and in some rural parts of the country where industrial production will occur.

Nevertheless, there is no room for improvement in sustainability because there is little attention paid to this. This will cause more pollution, especially in the urban areas. The overall spatial plan of the country will remain more or less stable because of the growth focusing on the R&D sector.

However, the population of the countries will start to steadily increase, especially with the creation of new labour and skilled jobs, as well higher education positions. Although the countries will not flourish like those in Western Europe for another few decades, their steady rise in economy, industry, finances, and politics will help them create a stable basis.

Figure 4.7 Collapse of the East Future Developments Chart

Transport Conditions Because intended integration and stronger ties to Western Europe, the transport system to and from the country will be changed in order to accommodate for more and easier travel to and from the countries for both passengers and cargo. Although their industrial exports will not increase dramatically, they will need to create a rail network that will be able to enter the European rail network. And as their ties to the East will start to decline, less effort will be put into maintaining the kilometers of rails that lead into Russia.

However, as the country tries to stabilize itself, the transport network becomes highly important because of the need for citizens to be able to move freely around the country in order to get to the industry. The lack of movement of citizens can stagnate the economic and political development of the country, especially being this dependent on the Western European society.

4.2.5 Scenario H: Depression in 2040 The Baltic States are squeezed between economic powers that have more capacity to produce and trade goods than the Baltics themselves. In this scenario the Baltic countries have to survive economic hardship rather than develop.

Economic and Political Conditions In the most pessimistic scenario all factors considered are negative. Since the countries rely heavily on import and export the global depression affects the Baltic economies badly in all its sectors. The inflation creates an incentive to import from low-wage countries. This has implications for freight transportation.

The economic instability of Europe and Russia leads to a situation in which the Baltic States are squeezed between two former economic power centres, while it is not possible anymore to profit from their stability. Estonia, Latvia and Lithuania have to rely on themselves for economic growth. Low foreign direct investment (FDI) hinders the transition toward knowledge-based industries.

Although Asian countries (notably China) stopped growing as they did in the early years of the 21st century, they still profit from the worldwide economic conditions because their products became cheaper over time. Hence, their exports have increased.

The reliance on China as a producer has increased its power position. The contrast between East and West

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has become bigger, since China wants its voice to be heard while Western countries, which still perceive themselves as the first world, are reluctant to admit the shift of power.

The Euro-zone has ceased to exist, caused by internal tensions over diverging national monetary policies.

The desire of the Baltic States to integrate with Europe is met by resistance of several EU-countries who want to solve the problems in their own economies first.

Russia has seen this development and has increased its pressure on the Baltic States to give in to Russian dominance.

Geographical and Demographic Conditions The worldwide depression decreases the attention for environmental change. Since the production continues to increase in emerging markets – which per definition have less means to minimize environmental impact – a changing environment is experienced. The sea-level has increased dramatically, causing direct danger for the ports along the Baltic coast. The rate of national depletion rose to unprecedented levels. This is mainly caused by a high population growth and less attention for environmental impact. The famed energy source transition has not incurred.

Figure 4.8 Depression Developments Chart

the independence failed to go back to their homecountries. Since there has been negative growth in all sectors a lot of inhabitants from rural areas look for work in urban areas. This has led to high pressure on the liveability in urban areas, mainly the capitals.

Transport Conditions A lack of growth in international passengers via airplane prevents the Baltic States from investing in airports. Little progress in new technologies for constructing roads and vehicles is made. The increase price of oil has caused transportation cost to rise.

The low political stability within the European Union has stopped the European Union’s attention for the development of the Trans-European Network, leading to individual, country-based transport policies.

The population of the Baltic States has decreased dramatically. The propensity of highly educated young people to leave the countries is high. A considerable amount of workers who left the Baltic States since

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5. Transport Infrastructure Projects for the Baltic States In this part the transport infrastructure projects that belong to the regional-economic scenarios are defined and analyzed for particular effects on regional factors that were considered important during the analysis from Chapter 2.

5.1 Transport Infrastrucure Projects for the Baltic States Below is an image that shows the stepwise process that overviews the process used in Chapter 5.

5.1

5.2

5.3

The generation of Transport Infrastructure Projects and their relation to the Research, SWOT analysis, and Regional-Economic Scenarios.

Transport Infrastructure Project Development for New, expansion, maintenance and Follow-Up Projects Division of the Transport Infrastructure Projects based on Scenarios (Chapter 4).

Figure 5.1 Stepwise Transport Infrastructure Project Development for the Baltic States

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Based on the different regional-economic scenarios, the following steps (Figure 5.1) are used for generating related infrastructure projects for the scenarios.

First, the infrastructure design is based on the analysis of current problems that was made in Chapter 2 of this report and on the actual project that political institutions such as European Union or government of the Baltic countries want to develop. The infrastructure projects are aimed to solve the problem not only in the short term, but also in the mid and long term. In this step, the information and problem statement could be easily found in the previous part. At the same time, the background research and studies also contribute to the infrastructure project design. The current large transportation projects are studied, for example, the Rail Baltica and Via Baltica. According to the situation of these projects, more developments are needed, new projects have been came up with in this design, such as “transform the Via Baltica in a motorway” and “develop multiple high speed line between Baltics and Russia”.

On the other hand, according to the studies of current passenger and cargo volume, the capacity of the airports or harbors still have large space to improve.

After discussing with the team and talking to the specialists, the increasing demand of transportation and logistics in Baltic region has been predicted.

Therefore, some expansion projects have been suggested, for example, new storage facilities and expansion of Tallinn airport.

At last, some transport policy, which considers long term development, has been generated. These infrastructure projects includes not only maintenance problems of current transport infrastructure, but also safety and environmental issues, for example, to improve the regional road quality or using less emission cargo or lorries.

Figure 5.2 Generation of the Infrastructure projects based on generated Scenarios in Chapter 4

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5.2 Transport Infrastructure Projects for the Baltic Countries The description of the following scenarios has been made by clustering them into two main groups: • New and expansion projects that consist of new infrastructures or an extension of an actual infrastructure • Maintenance and follow-up projects that are more general projects consisting of maintenance or little improvement of current infrastructures and projects that could be implemented only when the new and expansion projects will be implemented.

This cluster will be used later in the process to determine the effects of the scenarios.

For each project first a general description of the project will be given and then the reasons for which those projects are developed will be explained. The reasons mainly derived from the SWOT’s of Chapter 2 or from a desire of an authority to develop such a project.

In Figure 5.2 you can see a summarization of all the projects that have been addressed in this section.

Figure 5.3 Overview Map of Infrastructure Projects in the Baltics

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Figure 5.4 Overview Map of Infrastructure Projects concerning the Baltics and neighboring countries

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Reasons for Project Generation

Table 5.1 Chart of all New and Expansion Infrastructure Projects Proposed

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Reasons for Project Generation

Table 5.2 Chart of all Maintenance and Follow-Up Infrastructure Projects Proposed

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New and Expansion Project

5.2.1 Project 1: Rail Baltica Build a new twin track lane from Warsaw to Tallinn.

• New alignment twin track will be built.

• With European Gauge 1425 mm • “Maximum speed of 240 kph.

• The stations serve will be Warsaw/Kaunas/ Panevezys/Riga/Parnu/Tallinn Airport/ Tallinn.

• Use both for passengers and cargo services.

• Overall length of new track 728km • Journey times between Tallinn and the Lithuanian/ Polish Border

• Passenger 4.13 hrs (4h8m)

• Freight 10.38 hrs (10h29m)

(variable time depending on the # of calls) • Average speeds

• Passenger 170 kph

• Freight 68 kph • Passenger service frequency every 2 hrs starting at 06.00 and finishing at 24.00hrs approximately • New/Upgraded passenger stations at Palemonas, Panevežys, Riga Central Station, Parnu, Tallinn Airport and Tallinn.

• European Train Management System (ERTMS) to be compliant with European standard. ERTMS consists of two elements; the European Train Control System (ETCS) and Global System Mobile – Railways (GSM-R)” (AECOM, 2011).

• Rail Baltica will be built in the same corridor as the Via Baltica, to limit hindrance on the environment.

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Reason: This project is the TEN-T 27. It had already been approved by the five countries and the European Union. It is thus consider that it will be presented in all the scenarios. This project is also derived from the opportunity 3 from the transportation SWOT of the chapter2.

Indeed, by building such a line the liaisons between the three main cities of the Baltic countries will be much faster, and the accessibility of the Baltic countries from Western Europe by train will be much easier as the

Figure 5.5 Project 1 Map

same gauge will be implementing on both network. **The section Warsaw-Kaunas is already under work, it should be ready for 2015, 2016.

The start of the rest of the work is planned just before 2020.

New and Expansion Project

5.2.2 Project 2: Transform the Via Baltica to a Motorway Create 2*2 lanes on the whole road • Building new electrified European gauge tracks • Upgrading Russian tracks by electrifying them or with 1x25 kV or 2x25 kV Reason: This project is derived from the Weakness 2 and Opportunity 10 of the transportation SWOT of the Chapter 2.

The goal is to increase capacity on the most congested road of the Baltic States, and increase safety by allowing safe overpass.

Figure 5.6 Project 2 Map

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New and Expansion Project

5.2.3 Project 3: European Gauge Regional Rail Improve main regional rail routes with European Gage • Building new electrified European gauge tracks • Upgrading Russian tracks by electrifying them or with 1x25 kV or 2x25 kV Make both of those tracks faster than the actual one with an operational speed of at least 120 km/h for passengers.

This will be done only on the main regional road that lead to logistics hubs, to allow a better access via rail to the major economic locations.

Estonia: On the Estonian network no standard gauge will be built, because the main hub is in Tallinn and will be reachable for Western train through the rail Baltica.

Moreover right now some part of the network is already electrified around Tallinn until Aegviidu on the line of interest.

But the Russian gauge should be upgrade by electrifying them on the following axes:

• Aegviidu-Valga

• Tartu-Pechory

• Aegviduu-St.Petersuburg

Latvia : Build standard gauge and upgrade Russian gauge on the following links:

• From Rezekne and Daugvapils to Riga, Jelgava, Tukums, Ventspils and Liepaja.

Thus to reach the two main Latvian Ports (Ventpils and Liepaja) and Logictis Centers outside of Riga (Rezekne and Daugvapils).

Lithuania: Build standard gauge and upgrade Russian gauge on the following links

• Kaunas Palemonas-Kaunas Central Station (because the rail baltica will stop at Palemonas station and not at the central station of Kaunas) • Kaunas-Vilnius

• Kaunas-Klaipeda

Figure 5.7 Four rail track; Source: inventingeurope.eu

Due to the difference of gauge between the standard and Russian gauges only 85 mm it is not possible to implement a 3 rail dual gauge. Indeed, due to the width of the track’s foot this implementation is not possible. There are then two solutions • To implement four rail tracks as in Figure 5.5 • To implement two separate tracks next to each other. One track having the standard gauge and the other one the Russian Gauge.

Reason: This project is derived from Weakness 6 and 13 of the Transport Swot of chapter 2. Nevertheless, the Weakness 6 only highlight that the travel time between the main cities is too long. It was decided here to focus on train instead of road, because rail transportation is more sustainable than the train and because other measures regarding road are going to be taken later.

Figure 5.8 Project 3 Map

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New and Expansion Project

5.2.4 Project 4: Russian Gauge Regional Rail Improve main regional rail routes, by keeping the Russian gauge and make the following links faster at least 120 km/h thanks to electrification with or 1x25 kV or 2x25 kV. (Same links as in Project 3).

Reason: This project is derived from Weakness 6 of the Transport Swot of Chapter 2. The electrification of the Latvian lines is also part of the TEN-T projects (Project 2011-LV-93133-S).

There it was only consider to upgrade the current tracks, because this solution is cheaper than the previous one and concentrate all the handling movement at some key point that are Kaunas, Panevezys, Riga and Tallinn

Estonia:

• Aegviidu-Valga

• Tartu-Pechory

• Aegviduu-St.Petersuburg

Latvia:

• From Rezekne and Daugvapils to Riga,

Jelgava, Tukums, Ventspils and Liepaja.

Lithuania :

• Kaunas Palemonas-Kaunas Central Station

(because the rail baltica will stop at

Palemonas station and not at the central

station of Kaunas)

• Kaunas-Vilnius

• Kaunas-Klaipeda

Figure 5.9 Project 4 Map

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New and Expansion Project

5.2.5 Project 5: Riga-Moscow High-Speed Rail Develop a Riga-Moscow high-speed rail lane with Russian gauge.

Reinforce connections with the East by ensuring high quality connections with the Trans-Siberian railway, for the transit of goods.

Reason: This project derives from opportunities 6 and 7 of the transportation SWOT of the Chapter 2.

One important point there is that the intersections of the European and Russian network should be kept in the Baltic States to develop the logistics centers.

Figure 5.10 Project 5 Map

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New and Expansion Project

5.2.6 Project 6: Tallinn-St.Petersburg High-Speed Rail Develop a Tallinn-St. Petersburg high-speed rail lane with Russian gauge, to face the bottleneck on this lane.

Reason: This project derives from opportunities 6 and 7 of the transportation SWOT and from the weakness 11 of the same SWOT. One important point there is that the intersections of the European and Russian network should be kept in the Baltic States to develop the logistics centers.

Figure 5.11 Project 6 Map

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New and Expansion Project

5.2.7 Project 7: Development of ITS: Electronic queue management system Development of ITS: Electronic queue management system on non-Schengen border crossing points, to decrease the congestion at those border points ( Gražvydas Jakubauskas,2013) Reason: This project is an idea from the Ministry of Transport and Communication of the Republic of Latvia, that was developed during the Joint Workshop on “Financing Transport Infrastructure” of the UNECE the 10 Sept., 2013 at Geneva, Switzerland.

Figure 5.12 Waiting terminal

Figure 5.14 Project 7 Map

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Figure 5.13 Electronic queue management system; Source: Gražvydas Jakubauskas, 2013

New and Expansion Project

5.2.8 Project 8: New Storage Facilities in Tallinn Build new storage facilities in Tallinn. Develop Tallinn as the main cargo airport of Baltics, because the Rail Baltica is going to stop there, but also the busiest freight rail line of Europe between Tallinn and St. Petersburg also the presence of. Thus, it could become a big logistic hub.

Reason: This idea derives from the Estonian Logistics Cluster. Indeed, the “Logistics and Transit Association try to ensure the stability and sustainable development of the international logistics and transit chain passing through Estonia� (Estonian Logistics and Transit Association, 2013). The idea is to cluster airport, harbor, companies, and logistics hub to make the transit and transport of good more efficient. The concept develop by LTA is on the whole Estonia, but in the project present above more focus should be given to Tallinn.

This project is also derived from opportunities 6, 7 and 8 of the transportation SWOT of chapter 2.

Figure 5.15 Project 8 Map

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New and Expansion Project

5.2.9 Project 9: Expansion of Tallinn Airport Expansion of Tallinn Airport. Tallinn airport could also become a transit platform for passengers between Asia and Europe.

It can also take market from Finland notably to Helsinki airport that is also using this market currently.

• Build a new terminal only for transit passengers.

• Improve the current terminals by making two distinct levels for arriving and departing passengers.

• Extend the current runway in order to host long haul flights • Install new air traffic equipment • New taxiway • New apron with specific parking • New parking lots for car in response to the future increase of demand Reason: Most of those projects are part of the future plan of expansion of Tallinn Airport, because the Baltic States are one of the rear places in Europe where the air traffic is expected to growth in the future. They are also derived from opportunity 4 of the transportation SWOT of the chapter 2.

Opportunities to bring more money into the country by catching market from concurrent airports. Tallinn is a good location because reduce distance between Europe and Asia.

Figure 5.16 Project 9 Map

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New and Expansion Project

5.2.10 Project 10: New Infrastructure for Riga Airport Build new infrastructure in Riga Airport.

Reinforce the position of Riga airport as the main entrance point for passengers via the air to the Baltic countries.

• Build a new terminal • Build a new runway • Build a new control tower • Build a high public transport line from the city centre towards the airport Reason: Derive from opportunity transportation SWOT of the chapter 2.

4

of

the

Riga is the central location of the Baltic countries, and the focus is made on the main airport instead of developing small regional airports, because it will limit hindrance and costs.

Figure 5.17 Project 10 Map

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New and Expansion Project

5.2.11 Project 11: New Infrastructure for Port of Tallinn New infrastructure in the port of Tallinn • LNG Bunker Filling Terminal • Development of an additional berth for the processing of Ro Ro volumes and passengers vehicles at the Paldiski South Harbor.

• Break water for the Muuga and Paldiski Harbors to ensure safety and the navigation and maneuverability of the vessels • Implementation of the Motorway of the Sea, between the Ports of Aarhus, Gothenburg and Tallinn, for an efficient door to door transport solution.

Reason: The construction of a new LNG terminal and the implementation of the Motorway of the Sea are part of the TEN-T (TEN-T EA, 2013). There is indeed a research realized betwwen the three harbours of Aarhus, Gothenburg and Tallinn to determine what is the best way to build such terminal facilities.

Adapt current infrastructure of ports to containers and RO-RO as Russia is diverting its oil and gas towards its new harbours. Adjustments for the following harbours are necessary to stay competitive and to attract new customers. The goal is to maximize export of transport and logistics services.

The breakwater project is planned by the port authority of Tallinn (Port of Tallinn, 2013).

And the development of a new berth is both a consequence from opportunity 11 and weakness 10.

Figure 5.18 Project 11 Map

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New and Expansion Project

5.2.12 Project 12: New Infrastructure for Port of Riga New infrastructure in the port of Riga • LNG Bunker Terminal • New terminals due to free land in the vicinity of the harbor mostly for Ro-Ro and containers.

Reason: The construction of new LNG terminal is part of the TEN-T (TEN-T EA, 2013).

The new terminals construction is the result of opportunity 11 of the transportation SWOT of Chapter 2.

Adapt current infrastructure of ports to containers and RO-RO as Russia is diverting its oil and gas towards its new harbors. Adjustments for the following harbors are necessary to stay competitive and to attract new customers. The goal is to maximize export of transport and logistics services.

Figure 5.19 Project 12 Map

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New and Expansion Project

5.2.13 Project 13: New Infrastructure for Port of Klaipeda New infrastructure in the Port of Klaipeda • LNG Bunker Terminal • To dreg and wider the port channel to host deeper vessel (actually 15 meter depth) Reason: Both projects are currently planned by the port authority of Klaipeda (Port of Klaipeda, 2013).

Adapt current infrastructure of ports to containers and RO-RO as Russia is diverting its oil and gas towards its new harbours. Adjustments for the following harbours are necessary to stay competitive and to attract new customers. The goal is to maximize export of transport and logistics services.

Figure 5.20 Project 13 Map

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New and Expansion Project

5.2.14 Project 14: Build logistics centers Build logistics centres at strategic locations Improve cargo train transfer stations by building logistics centres at the new intersections of the European and Russian Rail network to make the handling of containers fast and efficient with inland stacks.

• Tallinn

• Riga

• Klaipeda Network of Public Logistic Center in Lithuania

• Kaunas Logistic Center

• Vilnius Logistic Center

• Klaipeda Logistic Center Dry Port Make the handling of containers fast and efficient with inland stacks.

Reason: Those projects are derived from the Rail Baltica project (AECOM, 2011) and the ministry of transport and communication from Lithuania (Gražvydas Jakubauskas,2013), as from opportunities 6, 7 and 8 of the transportation SWOT of chapter 2.

The goal of those projects is to try to develop the Baltic States as the main Transit station between Europe and Asia and to take advantage of the Rail Baltica that will provide good connections with Western Europe.

Figure 5.21 Project 14 Map

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New and Expansion Project

5.2.15 Project 15: Logistic Consolidation Centers Build consolidation centers next to the main logistics centers.

Build consolidation centers next to the main logistics centers and the harbors, in order to maximize the factor load of containers and trucks.

• Tallinn • Riga • Daugavpils • Ventspils • Kaunas • Vilnius • Klaipeda Reason: These projects are derived from opportunities 6, 7 and 8 of the transportation SWOT and opportunity 2 of the economic SWOT of the chapter 2.

The goal is to make the shipment of goods towards the Baltic States more efficient and thus try to attract new clients.

The goal of those projects is to try to develop the Baltic States as the main Transit station between Europe and Asia and to take advantage of the Rail Baltica that will provide good connections with Western Europe.

Figure 5.22 Project 15 Map

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New and Expansion Project

5.2.16 Project 16: Inland Waterways Modal shift toward inland Waterway • Make the Daugava navigable by building locks to pass the three hydropower plant and dam to create the new inland corridor Latvia-Belarus-Ukraine by waterways Daugava-Dnepr.

It will allow to develop transit between the Black Sea and the Baltic Sea and thus attract new market. This project need the construction of a channel between the 2 waterways in Belarussia (Michael Doubrovsky, 2005).

The project of a Daugava-Dniepr link is being promoted by many economic and political stake holders in Latvia, Belarus and Ukraine15 • Build a lock adjacent to the Narva power plant to open navigation until the Lake Peijpus, where a freight terminal has been built at Storoziets, and the Russian town of Pskov. Thus, inland waterway could be use for freight transportation between those cities and the harbour of Narva (Dariusz Milewski).

Reason: This project can be derived from Weakness 1 of the transportation SWOT of the Chapter 2.

Figure 5.23 Project 16 Map

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New and Expansion Project

5.2.17 Project 17: The Kaliningrad Issue Create a specific line between Russia (mainland) and Kaliningrad through Lithuania both for passengers and cargo, to avoid the delivering of temporary visa.

This line should be safe enough to ensure that no passengers can alight during the travel.

There are two design possibilities for this project: • Kaliningrad-Kaunas-Daugavpils-Rezekne-Moscow • Kaliningrad-Kaunas-Vilnius-Minsk-Moscow In the first case this line will cross two Baltic countries.

Both Lithuania and Latvia, and the train is going to run on the same line as the high-speed train RigaMoscow of the project 5. It will thus use new track.

In the second case the liaison is made through Belarus, using the current infrastructure.

Figure 5.24 Project 17 Map Option 1

From an economic point of view the first option as the advantage to create revenue for two Baltic countries.

Nevertheless, it should be noticed that this line will be only created if Russia is mainly Reason: Derive from opportunity transportation SWOT of the chapter 2.

5

of

the

Will avoid the delivery of specific visa by Lithuanian authority to Russian citizens wishing to travel between the main land and Kaliningrad.

Figure 5.25 Project 17 Map Option 2

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Maintenance and Follow-Up Project

5.2.18 Project M1: Improvements of the Via Baltica Continue the on-going improvement of the Via Baltica By building double lanes at the bottlenecks or by building new road segments and bypass especially nearby agglomerations.

Reason: Derive from Weaknesses 1 and 5 of the transportation SWOT of the chapter 2.

Improve connections between the main cities of the Baltic States and the Rest of Europe Increase safety and resolve main bottleneck points in the road network.

Figure 5.26 Project M1 Map

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Maintenance and Follow-Up Project

5.2.19 Project M2: Maintenance of the Via Baltica Maintenance of the Via Baltica.

By replacing the asphalt when the quality become too low. It should be notice that a maintenance strategy is better than waiting for the total degradation of the pavement.

Reason: Derive from weakness 5 of the transportation SWOT of chapter 2.

Improve connections between the main cities of the Baltic States and the Rest of Europe Ensure good quality of infrastructure to increase safety.

Figure 5.27 Project M2 Map

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Maintenance and Follow-Up Project

5.2.20 Project M3: Improve Internal Road Quality Improve internal road quality.

• Implement service and road stations along the main highways of the three states.

• Build emergency lanes on highways.

• Reinforce the signalisation of the network.

• Maintain the regional and local road to keep high quality.

• Renew the covering of the road the allowed cargo load per truck (Russia/soviet <30 ton vehicles, Europe >40 ton vehicle)

Reason: Derive from European observation that road quality in Latvia is really low and from weakness 3 of the transportation SWOT and weakness 1 and Opportunity 3 of the Environment and Regional Policy SWOT.

Figure 5.28Project M3 Map

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Maintenance and Follow-Up Project

5.2.21 Project F1: Electrification of Train Network Electrifying the whole train network to make the service faster.

Switches, rolling stocks and signal position could also be modified to ensure higher speed.

Reason: Derive from weakness 6 of the transportation SWOT and opportunity of environment and regional policy SWOT of the chapter 2.

Increase the speed of the train on the whole network to improve accessibility of remote areas.

Figure 5.29 Project F1 Rail Baltica Map

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Figure 5.30 Project F1 Internal Rail Network Map

Maintenance and Follow-Up Project

5.2.22 Project F2: Traffic Information Systems Multi-functional enforcement and traffic information system on the main motorways Main functions: - Automated sectional speed control.

- Weigh-in-motion detection; - License plate recognition (technical inspection data, insurance validity, vehicle registration); - E-tolling.

Reason: This project is a project from the ministry of transport and communication of Lithuania (Gra탑vydas Jakubauskas, 2013).

It is also derived from Weakness 1 and Opportunity 3 of the Economic and Regional SWOT of chapter 2.

The goal if to come with a better road safety and facility of implementation of E-tolling for the heavy vehicles.

Figure 5.31 E-toll and Traffic Information Machine

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Maintenance and Follow-Up Project

5.2.23 Project F3: Environmental Projects New infrastructures towards more environment friendly area.

In order to preserve the environment it is necessary to take some special measures concerning the infrastructure project. â&#x20AC;˘ Implement on a higher scale environment friendly vehicle by developing electric vehicles. Development of charging electric stations in the major cities of the countries to make this car use, for instance along the highway at gas stations or in the city centers at thigh visible points. This has already been done in Estonia, it is now necessary to implement those stations in the two other countries. (Forbes, 2013) â&#x20AC;˘ Build platforms on the main road and intersections for car-pooling, such as specific parking lots on the via Baltica. A study should be made to decide where to implement those carpooling station in order to attract the maximum demand.

Reason: Base on opportunity 1 and weaknesses 2 and 3 of the environment and regional policy SWOT. The goal is to implement new mode of transport to reduce emissions.

Figure 5.32 Project F3 Map

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5.3 Analysis of Transport Infrastructure Projects In order to analyze the effects in a more systematic manner for each project in the scenarios, we created a general list of indicators to use as guidelines for understanding the overall effect of each project. The indicators were classified into the four categories that were observed as the major trends that will drive the growth of the Baltics: economics, geographical/ spatial, demographics, and transport. These four categories were derived from analysis made Chapter 2 and were used as main indicators to generate each scenario.

Each category was then divided into several factors seen in Table 5.1. The factors used were selected based in the analysis and proved to greatly influenced when changes occur to transport policies that effect trade and movement of individuals which lead to economic changes and demographic changes that ultimately effect the spatial and environmental factors.

network on these indicators is then translated to criteria for the evaluation phase in Chapter 6 where we will perform a Multi-Criteria Analysis. This occurs in both the economic, geographic/spatial, demographic terms and additionally in terms of cost, social change and feasibility in the multi-criteria analysis so that the extent to which each project meets the objectives from the problem description can be measured. This is done per scenario. This assures that projects are evaluated from the perspective of the policy fields of economy, environment and spatial planning as well as on the cost effectiveness. An overview of the indicators is given in Table 5.2.

Economics

GDP growth International relations Goods trade

Geography

Use of the land Pollution Urbanization Natural resources

Transport

Demographic

A list of the effects of the indicators associated with each project in Appendix F The effects of the maintenance projects or the follow-up projects will not be analyzed since they are considered not to generate much impact.

Public / Private transport Accessability Passengar / Cargo transport mode Population of Baltic States Immigration / Emigration Skill / Labour workers, scholars

Table 5.3 Factors determining the effects of each scenario

With this analysis, infrastructure projects were eliminated. Any project with too many negative (lowering) effects due to the scenario and project combination were immediately eliminated as a potential project from the scenario.

Consequently, the performance of the infrastructural

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Table 5.4 All indicators used to measure the effects for each infrastructure project

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In Table 5.3 it can be seen in which economic and regional scenarios the previous project can be applied.

Some projects can be pre-eliminated because these are highly unlikely. For instance, project C4 (Keeping the Russian gauge on primary railway routes) can be eliminated in a scenario of re-industrialization. Due to the collapse of the Eastern economy and political stability, the Baltics should take the chance to stabilize their economy to the West and become the main transport of passenger and cargo hub of the West to the East. Hence, keeping the Russian gauge is very unlikely. The same reasoning has been done for all the project.

After each scenario is assigned a set of infrastructure projects, we created an analysis of the infrastructure projects based on each scenario.

Table 5.5 Infrastructure Projects per Scenario

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6.Evaluation In Chapter 5, transport infrastructure projects were formulated and categorized based on in what possible future scenario(s) that transport projects belongs to. In order to make it clear which projects should be executed and what the priority of the projects are, a Multi-Criteria Decision Analysis (MCDA) will be made.

This section starts with an introduction and methodology part about MCDA in which further description of this section is made. Then steps described in Section 6.1 will be taken. To conclude a visual representation of the infrastructure investment plans will be provided.

6.1 Introduction of the MCDA 6.2.1

Selection of Criteria to Evaluate Transport Infrastructure Projects

6.2.2

Weighing of the Criteria based on Analysis for Evaluation

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Choice for Multi-Criteria Decision Analysis (MCDA)

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Scaling of Criteria & Evaluation of the Transport Infrastructure Projects

6.5

Calculations and Prioritization of Transport Infrastructure Projects

6.6

Sensitivity & Robustness of Projects Calcuation

Figure 6.1 Stepwise Process of the Analysis and Evaluation of the Transport Infrastructure Projects based on Scenarios

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In Figure 6.1, an outline of the steps and the following sections of this chapter is illustrated.

In this Chapter, we will introduce how we came to choosing the Criteria for evaluation and the use of the MCDA method.

The Multi-Criteria Decision Analysis method that helps to evaluate the different alternative projects is characterized by several distinct and important aspects. These aspects can be described by means of different criteria. Thus, a MCDA is used to choose, rank, classify or describe alternative solutions to problems that are characterized by multiple dimensions, e.g. criteria.

The MCDA does not generate a ‘solution’. There are no right or wrong answers. Instead, the MCDA proposes many prescriptive approaches to help ‘decision makers’ in the decision-making process to take multiple criteria explicitly into account when exploring decisions that matter. The main steps of MCDA methodology are: a) Choice of the MCDA method b) Definition of the criteria and identification of the relative importance of the criteria (weighting of the criteria) c) Evaluation of the alternatives on the criteria d) Scoring/valuing the evaluations and choice of comparison procedures e) Calculation of the preferred choice, ranking, classification f) Sensitivity and robustness analyses In the following chapter we will perform these steps in order to generate a list of projects ranked by priority per scenario.

6.2 Defining the Criteria for the MCDA When choosing the criteria which the alternatives are evaluated on, it is important that the criteria hold a meaning to the decision maker. The decision makers in this case are the Commissioners of transport, economy and environment and regional policy.

6.2.1 Selection of Criteria In this subsection an explanation will be given on how the criteria used in the MCDA was evaluated. These criteria were derived from the indicators mentioned in Section 5.3 and is conceived as the most important factors for evaluation of the infrastructure investment plans.

The connection between the indicators and the criteria can be seen in Table 6.1.

Following the table, we will provide a brief explanation of each of the generated criteria.

Table 6.1 Criteria and their relational indicators (continued on next page)

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Cost – When looking at cost, not only the investment costs are of important for the project, but also the maintenance and long term upkeep costs of the project. Because the cost should by minimized and keep low, the cost is a negative value ‘-’. A ‘+’ in cost is only considered if the project will not only compensate the cost of construction/production, but also if it will bring in revenue.

Feasibility – In this criterion, it is considered how likely each project will be granted the funding by both the state and the EU for start on construction. Since

the feasibility of the projects should be maximized, the weight of the project is ‘+’, and only becomes ‘-’ in the case of extremely rare chances to realize this project.

All eliminated projects either have an incredibly low feasibility score or will no long be considered given the scenario.

Economy: Three major factors are looked at that will greatly influence the economy of the Baltic States.

Those are employment, trade and migration (the movement of people).

Employment – For this particular sub-criteria, the employment opportunities is looked at for the project not only during construction but also afterwards for maintenance and operation, thus the weight is positive ‘+’. The ‘+’ represent projects that will bring in long-term employment to the countries and the ‘-’ represent projects that will only bring short-term employment, and possibly little to no employment opportunities.

Trade – For this sub-criterion, whether the project will help to increase trade relations within the Baltics and internationally will be analyzed. As the amount of trade in each project should be maximized, the ‘+’ weight value is used to increase the trade. Thus, ‘+’ values represent a healthy increase in trade, and the ‘-’ values represents the projects failure to stimulate trade through these countries.

Migration – Because of the decreasing population in the Baltics, the hope is that new employment opportunities will increase the population and keep down emigration. The ‘-’ value of the weight indicates that the higher the migration, the more the natives will migrate away to other parts of the EU. However, the ‘+’ values that are an outcome will result in immigration into the country.

Environment: Two major factors influence the environmental impact that the project will have; pollution and land use.

Table 6.1 (continued) Criteria and their relational indicators

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Pollution – This sub-criteria looks at the amount of pollution that is produced during the construction process as well as the use of the infrastructure afterwards. Because of the EU initiative to lower the

amount of pollution created over the coming years, the ‘-’ weight is given to each number. When the score is ‘-’ it indicates a decrease in the pollution when compared to the older model of performing the task.

However, all ‘+’ values means that an extra amount of pollution is created with the production and use of this infrastructure.

6.2.2 Weighing of the Criteria

Land Use – In the criteria of land use, the amount of land used in the area and the difference between urbanization and ruralization is under the microscope.

This takes into account the amount of land used for the construction and the use of the infrastructure.

Because the amount of land used for infrastructure should be minimized, a ‘-’ value is given to the weight.

This means that all ‘+’ values mean a use of additional land and the spread of the population while ‘-’ values refer to no extra land use and consolidation of the inhabitants.

The accumulative impact of the criteria on the alternative is 100%. The weight is calculated as a percentage of the number 10 so the utility number will be reasonable and easier to reflect upon. The cost has the most weight in the decision project like in most investment plans. After that feasibility, trade and pollution come second in weight. The EU weights increase in trade heavily since it wants to use the geographical position of the Baltics. There is

In the MDCA weighting of the criteria is used to give some criteria more importance than others.

In Table 6.3 the distribution of weight amongst the criteria is given based on assumed importance of the Commissioners.

also much attention paid to pollution. The EU has set straight rules regarding emission and the infrastructure projects should not contradict them.

After those criteria there is employment and social development. It is well known that with higher employment rate the GDP will follow and will benefits both the EU and the Baltics. Social development is also important since the Baltic States are somewhat behind in those matters. Some small attention is paid to migration and land use.

The product of the weight of each criterion and the score (-2,-1,0,1,2) it gets determines the utility of the infrastructure alternative

Social – This criterion refers to a number of smaller effects in the Baltics that contribute to a better and healthier social standard of living. Not only does it contribute to a lowering of the number of deaths on the roads, but also an increase in movement among the population, better social and political though, as well as an increase in the level of knowledge in the country.

This is a high requirement for country development the ‘+’ value of the weight is important and means that all ‘+’ numbers refer to a general increase in some or all factors, while a ‘-’ value refers to the stagnation of decrease in some or all of the factors.

Table 6.2 Weight of the Criteria

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6.3Choice of MCDA There are many types of MCDA known but some are more suitable than others given the project and the data available.

6.3.1 Type and Precision of Available Data

Three broad types of methods could be distinguished:

One of the most important factor to look at when selecting an appropriate MCDA method is the measurement scales of the data that are to be dealt with: qualitative data (ratio- or interval measurement scales) versus quantitative data (ordinal or nominal scales) and they precision of available data.

• Complete aggregation methods: often named value models. They apply very strong assumptions, but are mostly simple and transparent.

• Outranking methods: which initially apply weaker assumptions aimed at strengthening the dominance relationship, but are often less transparent.

• Goal and reference point approaches: which use simple concepts, but are only applicable to purely quantitative measurement scales. (Pruyt, Eric. 2009) MCDA problems are mathematically ill-defined problems that often do not lead to an unambiguously best solution. Moreover, all MCDA methods require some form of additional information. This also means that there is not an MCDA method that is without a doubt the best for solving all MCDA problems.

The choice of method should therefore depend on additional information. It depends mostly on • the type and precision of available data, • the type of information that is wanted as output and • the inter-criteria structure and information

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In the case of assessing the effect of transport infrastructure plans 30 years in the future on the economy and social benefits of the Baltic States only qualitative data can be attained. If one were to assess the effects of future plans in qualitative manner, he would have to invest substantially more time and effort to the case. That is if reliable qualitative data can actually be generated. Any accurate cost evaluations can also be rejected based on same argument. So if all input data is qualitative in form or interpretation, then it is best to use purely qualitative multi criteria decision making method.

6.3.2 Desired Output In order to offer a good way of making decisions regarding investments in transport infrastructure a ranking of the alternatives seems to be the best way.

By prioritizing the alternatives based on the criteria the Commissioners can better choose which project they want to invest in a given scenario.

6.3.3 Inter-criteria Structure and Information The structure between the criteria and the relationship between them can have a lot to say about what MDCA is chosen. Whether there is hierarchy or weight between them, if there is order between them, if there is a trade-off between them or perhaps no priority or no inter-criteria information about them.

In this case there is a trade-off between the criteria.

That means that it is assumed that it is possible to partly assign compensation quantitative measurement scale weights to the criteria. It is possible to scale the presumable effects of an infrastructure investment plan to criteria. That method will be described in more detail in Section 6.4.

6.3.4 Selection of MCDA Method

impossible in this situations since there is no specific numerically goal for the problem.

The figure below is a representation of the classification of MCDA methods in respect of the nature of the data and the nature of inter-criteria information.

This classification does however not incorporate all possible methods.

It was established in precious section that the problem at hand deals with trade-offs between the criteria. That would suggest that either Electre, Promethee, goal programing or utility function methods should be used.

However, Electre makes pairwise trade-off between alternatives to eliminate some of them and decrease the number of alternatives. That is not the objective of this policy advice. The problem with Promethee is that the decision maker needs to express his preference between two alternatives on a given criterion. That is not possible in this case. Goal programming would be

Then only solution that remains is Utility functions.

That option does not seem to fit because of the purely qualitative date used (see Section 6.2.1). However, as established in Section 6.2.3, the impact of the criteria can be scaled in a quantitative manner so that method can be used. Another reason why the Utility function should be used is the number of alternatives presented. Electre and Promethee are both time consuming and do not add any valuable data on the selection of alternatives for this case. Therefor an additive utility function method is chosen as the MCDA method.

The advantages of the use of Utility theory method for this project: • Weights between criteria, not pairwise trade of • Purely qualitative information or score card

• Not time consuming • Only information needed from decision maker in the beginning • No upscale or downscale Thus the utility functions method will be used in this report.

For this policy advice it was decided not to use Cost benefit analysis (CBA). The reason for that is that a CBA should be rejected as an analysis method when it is not possible to place a monetary value to all important aspects and when the value of money is not equal to all people. Both of these conditions apply in this case.

6.3.5 General Description of the Additive Utility Function Method The method is conducted by starting to select criteria that the alternatives are measured on. Then the effects from the alternatives on these criteria are scored depending on if that effect is ideally maximized or minimized. The criteria have certain weight and then the utility is calculated for each alternative by taking the sum product of the weight and the scoring.

Then the utility is ranked from the highest utility to the lowest. The alternative with the highest utility is the one that is most desirable to execute.

Table 6.3 Different evaluation methods

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6.4 Scaling Criteria & Evaluative Transport Infrastructure Projects 6.4.1 Scale the Criteria

6.4.2 Evaluating the Projects

6.4.3 Choice of Comparison

As mentioned in Section 6.2.3 there is a trade-off between the criteria. That means that the effects of the criteria are assigned quantitative measurement scale weights. It is possible to scale the presumable effects of an infrastructure project to criteria. As shown in Table 6.4 the effects on the criteria are made ordinal.

That ordinal scale is then scaled between numbers.

When using the Additive Utility function method it generates a ranking of the alternatives based on their utility. So the higher utility a project has the more appealing that project is for selection based on criteria and weighting. This procedure will be used for each future scenario. In that way, the Commissioners have a good overview of the investment possibilities based on what the future holds. The criteria will for all cases be the same but the projects differ from scenario to scenario based on what alternative is applicable where.

The infrastructure projects will, within each scenario, be categorized based on their priority; I, II and III. The priority is determined by how well the infrastructure project fit the criteria. The scale of how to categorize the priority in the three categories will be defined so that the projects with 33% highest utility are P I, next 33% have priority P II and 33% of the projects with the lowest utility function are P III.

Table 6.4 The Scaling of the Qualitative Data to Quantitative Data

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6.5 Calculating and Prioritizing After following all of the previous steps the actual analysis can be made.

6.5.1 MCDA Analysis of all Scenarios The ranking of priority of the projects can be seen in Table 6.10 - Table 6.6.14. These rankings are determined by the utility score generated from the MCDA analysis for each scenario shown in Table 6.5 - Table 6.9.

Table 6.5 Scoring of the Infrastructure Projects for the Scenario: EU-Topia

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Table 6.6 Scoring of the Infrastructure Projects for the Scenario: Re-Industrialization

Table 6.7 Scoring of the Infrastructure Projects for the Scenario: Rise of the East

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Table 6.8 Scoring of the Infrastructure Projects for the Scenario: Collapse of the East

Table 6.9 Scoring of the Infrastructure Projects for the Scenario: Depression

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Table 6.14 Priority ranking for projects from Scenario Depression

Table 6.12 Priority ranking for projects from Scenario Rise of the East Table 6.10 Priority ranking for projects from Scenario EU-topia

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Table 6.11 Priority ranking for projects from Scenario Re-industrialization

Table 6.13 Priority ranking for projects from Scenario Collapse of the East

6.6 Dealing with Uncertainty - Sensitivity and Robustness An important analysis necessary in most MCDA processes is the extensive testing of the sensitivity of the outcomes. Sensitivity testing is the process of changing the assumptions about the value of constants in the model and examining the resulting output.

criteria and to keep the other constant.

Below is a table that shows which projects are no longer a Priority I when changing the weight of the 4 criteria.

This table is a summary of set of calculations and tables that can be found in Appendix G.

6.6.1 Sensitivity of Priority I Projects when given Differently Weighted Criteria An important analysis necessary in most MCDA processes is the extensive testing of the sensitivity of the outcomes. Sensitivity testing is the process of changing the assumption about the value of constants (parameters) in the model and examining the resulting output.

Sensitivity analysis is usually done by changing the parameters by Âą10% of the overall points (10 points), as opposed to uncertainty analysis where the whole possible spectrum of values is explored. For this evaluation the sensitivity analysis will be based on the weight of the criteria. Thus the question is: will the ranking of the alternatives change if the weight of a criterion is changed? To narrow the scope, attention is paid to the projects in PI category of every scenario.

Moreover, since cost, feasibility, trade and pollution have the most weight it makes sense to vary those

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Table 6.15 Projects taken out of Priority 1 due to Sensitivity analysis.

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From the Table 6.15 above it is clear that the Priority I projects are not very sensitive to changes in the weights. That means that the list of the PI projects is quite stable; most PI projects remain as PI projects although changes up to 10% are made in the weight.

6.6.2 Evaluation of Transport Infrastructure Projects Robustness Robustness is defined as something that is immune to uncertainty. It can therefore be said that a project is robust if these ´survive´ different future scenarios. As shown in Tables 6.10 - Table 6.14, projects 1, 7, 11, 14, 15, M2 and M3 are applicable for all the scenarios except depression. The projects that are applicable for all the scenarios are 1, M2 and M3. The scenario Depression is however most unlikely so the previous enumeration counts.

The no regret projects that are applicable in all scenarios except for the Depression are: Projects 1, 7, 11, 14, 15, M2, and M3.

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6.7 Conclusions of the MCDA To conclude, the Additive Utility Theory MCDA method was selected as the most appropriate method to evaluate the projects and to prioritize them based on selected criteria. Projects were categorized for every future scenario in three priority classification. The method selection was based on three parameters, the type and precision of available data, the desired output and the information on the inter criteria structure.

WBased on sensitivity analysis and robustness evaluation it can be concluded that the prioritizing is not sensitive to small changes in the weighting of the criteria and that the â&#x20AC;&#x153;no regretâ&#x20AC;? project (robust projects that are applicable for every future scenario) are projects 1, 7, 11, 14, 15 M2 and M3.

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7. Implementation The different projects have been proposed and analysed in the previous parts of this report. Nevertheless, the description of the projects made above is insufficient to implement them. Some others considerations need to be taken into account to successfully implement those projects. Those specific considerations will be described in this section.

7.1

Overview of the Transport Infrastructure Projects

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Implementation plan based on Scenarios & Infrastructure Projects

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Points of Attention Projects that need further Study

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Additional Funding & Financial Help for Implementation

Interest will then be given to the social and political supports required for the implementation of those projects, and finally tips for the ex-post evaluation of the projects will be given.

7.5

Political and Social Support for Transport Infrastructure Projects

Figure 7.1 to the right illustrates and describes the process of this Chapters Implementation Planning.

Figure 7.1 Stepwise Process of the Implementation Plan for the Transport Infrastructure Projects

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First an overview of the project will be made, with table of projects and general maps that alight the plan regarding infrastructure for the Baltic States for 2040.

A general planning of implementation of the projects will also be given.

Then, it will be described which technical studies need to be realized to implement those projects successfully, and which funds are available to finance them.

7.1 Overview of the Projects In Table 7.1, 7.2, and 7.3 an overview of all the projects is made, by specifying the location and function of each project. Each project can also be seen visualling in Figure 7.1 and Figure 7.2

Table 7.1 Part 1 : Overview chart of all New and Expansion Projects

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Table 7.2 Part 2 : Overview chart of all New and Expansion Projects

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Table 7.3: Overview chart of all Maintenance and Follow-Up Projects

Figure 7.2 Overview of the Projects connecting the Baltics to Europe

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Figure 7.3 Overview of the Projects within the Baltics

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7.2 Implementation Plan of the Infrastructure Projects The length of the infrastructure projects are estimated based on previous analysis and the priorities from the MCDA evaluations.

estimated to start at 2014 and continue until 2040.

Based on the same reason, the follow up projects will could begin at 2020 and continue until 2040.

The time span of the whole implementation plan is from 2013-2040. The infrastructure projects are categorized into rail, road, airport and ports. Because the project “Rail Baltica’ is on-going and hopefully will be finished in 2020. Therefore, other rail projects such as improving regional rail routes or building up new high-speed rail routes are estimated to start around 2020, and the projects could last 10-15 years depending on the size of constructions.

The time schedule of the projects based on each scenario are visualized by Gantt Chart in the following pictures.

Because of the economic developments and the new railways infrastructures, airports and sea ports may face an increasing demand in the near future.

Therefore, expansion projects of airports and new infrastructures in the sea ports of Baltic countries are mainly estimated to start from 2015 -2018 (at the end of the railway projects implementation), and would be finished around 2025-2040. Special projects such as “Electronic queue management system” could start immediately, and its implementation could last for 10 years.

On the other hand, the schedules of maintenance projects will follow the implementation of new projects. For example, the on-going improvement and maintenance of Via Baltica have could be set up from 2025-2040. Since “improving internal road quality” could take a long term to implement, it is roughly

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Figure 7.4 Gantt chart of the Implementation Plan for Projects in the Scenario EU-Topia

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Figure 7.5 Gantt chart of the Implementation Plan for Projects in the Scenario Re-industrialization

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Figure 7.6 Gantt chart of the Implementation Plan for Projects in the Scenario Rise of the East

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Figure 7.7 Gantt chart of the Implementation Plan for Projects in the Scenario Collapse of the East

Figure 7.8 Gantt chart of the Implementation Plan for Projects in the Scenario Depression

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7.3 Points of Attention Regarding the Projects Nevertheless, all projects need further study before implementation. In the following section, we will explore some of the further explorations needed of a regrouping of the projects. These analyses will need to performed before any implementation.

Project 1: For the Rail Baltica, the general layout of the infrastructure has been decided notably by deciding in which cities the tracks will be built. Nevertheless, a precise study of the layout has to be done. The aim of this study is to determine the exact tracks locations on the whole project. This is going to be done by consulting the local authorities (region, cities, …) that have a better knowledge of their territories.

Project 3: By analysing the actual demand/capacity ration of each of the line of this project, and the environmental constraints, it should be determined if the four rail tracks solution should be implemented or the two separate tracks. If the capacity is too low the two separate tracks should be implemented.

Project 3, 4 and F1: The electrification of the Russian gauge can be done or with 1x25 kV or 2x25 kV.

25 kV line to reduce energy losses. A voltage of 50 kV is apply between the overhead line and the feeder line, whereas the voltage between the overhead and the rail line is of 25kV, this is furthermore the current provide to the train. This technology thus allows using the advantage of high voltage transmission, as maintaining the supply of the train with 25kV (Ineco, 2011).

Project 5 and 6: Study regarding the general layout of the high speed lane between Riga-Moscow and Tallinn-St. Petersburg still has to be done. Indeed, the actual infrastructure can be used or new track can be developed.

Project 7: Precise designs of each of the 8 stations at the border has to be made taking into account the local constraints of each station.

Project 8: The exact extra capacity of the new storage facilities need to be determined.

The 1*25kV, 50 Hz AC single feed system correspond to the international standard of electrification.

Project 9 and 10: Feasibility studies for the extension or construction of the runways, the construction of taxiways, terminals and parking spots have to be done. Environmental impact assessments are also necessary to determine the impacts of the new aircrafts.

The 2*25kV autotransformer feed system is used on

Project 11, 12 and 13:

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Researches regarding the construction of LNG Bunker Filling Terminal are currently made in order to have an integrated approach between the Baltic Sea ports. The goal being to come with “a more standardized process for planning and constructing LNG infrastructure” (European Commission, 2011).

Project 14 and 15: The capacity and the precise location of the logistics and consolidation centers still have to be determined.

Project 16: Feasibility regarding the construction of the canal in Belorussia to link the two rivers Daugava and Dniepr.

Project 17: Two possible layouts are under study for the construction of the specific line between mainland Russia and Kaliningrad. A choice still needs to be done by the authorities.

Project M1: Design the layout of the bypass of the Via Baltica.

Project F2: More specifications are necessary regarding the material that need to be bought and the precise location of the system on the motorway.

Project F3: It should be specified where the stations and platforms need to be built.

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7.4 Additional Funding & Financial Help for the Implementation of the Projects One of the main obstacles to lots of projects is the cost. Indeed, governments only have a limited amount of fund dedicate to transport infrastructures, it is thus important for them to find funds or financial help to finance the projects.

This report is an advice to the European Commissioners, it is thus expected that some projects are going to be fund by the European Union directly or indirectly.

Below a list of the different type of funding can be found. It is the responsibility of the stakeholders in charge of each project to apply for those funds.

Cohesion Funds The cohesion funds are dedicated to European Countries who has a GNI (Gross National Income) per inhabitants that is less than 90 % of the Community Average.

From 2007 to 2013 the three Baltic Countries where eligible to those funds, it is thus assumed that there will be also eligible for the coming years.

These funds can finance TEN projects or transport projects that have a considerable benefit to the environment (European Commission, 2013).

European Regional Development Funds (ERDF) These funds from the European Union can finance infrastructure projects, they are grants. (European Union, 2013)

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TEN-T

PPP

The Commission came with an agreement with the European Parliament on future TEN-T financing. A budget of 7 billion â&#x201A;Ź has been made available for the coming programming period (ECORYS Nederland BV, 2006). Thus, TEN-T projects are eligible for Grant from the Trans European transport Budget (European Commission, 2013b).

Public Private Partnership can also be an alternative to finance some infrastructure projects, when there is sufficient scope to involve private stakeholders.

EIB: European Investment Bank The EIB is the European Unionâ&#x20AC;&#x2122;s bank. This bank is owned and represents the interest of the member States of the European Union (European Investment Bank, 2013). It provides finances for projects that contribute to the EU policy objectives, among which transportation projects. The funds from the EIB are loans and guarantees (European Commission, 2013b).

EBRD: European Bank for Reconstruction and Development This bank only focuses from Central Europe to Central Asia and the southern and eastern Mediterranean.

Thus, the three Baltic countries are part of the countries of operation of the EBRD. This bank is owned by 64 countries, the European Union and The European Bank Investment (European Bank for reconstruction and Development, 2013). It provides projects financing for banks, industries and company and publicly owned companies.

Until now the PPPs in the Baltic countries have been limited, but it has been proved in other European countries that such partnerships could be interesting for ports, airport and logistics countries (ECORYS Nederland BV, 2006). Nowadays, there is a lack of regulatory framework for implementation of PPP in the Baltic countries, only some accounting regulation.

Thus, it could be interesting to develop regulatory framework for PPP to create incentives to use them.

7.5 Political and Social Support 7.5.1 Support of the European Union and it’s relation with European Union policy

The Rail Baltica [1] will allow to create the “Single European Railway Area”, as the network of the Baltic States will be compatible with the rest of the network of the European Union (same gauge and ERTMS) (European Commission, 2011).

The infrastructure projects proposed in this policy advice are relevant with the main European Union measures regarding transportation, environment and regional policy. It can thus be expected that those projects will have the support of the European Union.

With the rail infrastructures’ projects (Rail Baltica and new electrified lines, [1, 3, 4, F1]), expanded airports (Tallinn and Riga, projects 9, 10), expanded harbours (Tallinn [11], Riga [12] and Klaipeda [13]) and waterways [16] navigable for barges (Daugava) the goal is to make the freight transportation intermodal.

The implementation of those projects thus aims to promote co-modality (European Commission, 2013c).

This will be proven by relating the projects to the main objectives of each of the Directorate=General of the European Union.

7.5.1.1 Directorate-General Mobility and Transport: From the infrastructures’ projects list proposed above it can be seen that they are incentives to enhance modal shift. The infrastructure projects proposed are mainly oriented towards rail instead of road and waterways infrastructures [16] are developed, whereas this mode is currently almost not use in the Baltic States.

The goal is to try to “impose a redistribution amongst modes” in the Baltic States as it is recommended by the European Commission (2001), in its White paper by revitalizing other modes than the road.

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The creation of new high speed lanes toward StPetersburg [6], Moscow [5] and Kaliningrad [17] aim at “extend the EU´s transport and infrastructure policy to the closest neighbors to East “ (European Commission, 2013d).

7.5.1.2 Directorate-General Environment: The infrastructures suggest in this paper are not only considering transportation improvements, they also aimed at reducing impacts on the environment.

For instance, the implementation of charging electric stations [F3] will enhance the utilization of electric vehicles, aiming at implementing innovative solutions that will reduce air pollution, dependency on fuel and

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that will have no negative impact on climate change.

This project is thus complying with the DirectorateGeneral Environment’s challenge (European Commission, 2007).

Another issue of the White paper that has been dealt in the provision of projects is the improvement of the safety on the road, by the provision of the projects M2, M3 and F2. It was considered that by improving the quality of roads and by implementing speed limitation devices the safety will increase. This measure is going toward the objectives of the Directorate-General Environment (European Commission, 2007).

7.5.1.3 Directorate-General Regional Policy: Finally, the construction of the infrastructure project also aimed to develop the economy of the region.

The construction of the Rail Baltica [1] is in accordance with the Programme of the Baltic Sea Region (European Commission, 2013h), as it creates a joint transnational infrastructure to improve the external accessibility of the region. In addition the project regarding the port of Tallinn [11] allows complying with this programme because it allows increasing maritime safety in this port.

By upgrading the main national railway lines in the Baltic States the goal is to improve the territorial accessibility of the countries by providing faster

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transportation modes. This is in agreement with the Priority 2 and 3 of the operational Programme “Infrastructure and Services” of Latvia (European Commission, 2013e), corresponding to the promotion of territorial accessibility and the development of a transport network of European significance and promotion of sustainable Transport.

Project M3, that aimed at maintaining the Baltic roads is in agreement with the Operational Programme “Economic Growth” of Lithuania, that stipulate that 1165 kilometers of roads should be rehabilitated (European Commission, 2013f).

The construction of the Rail Baltica, the development of the airport of Tallinn [8, 9] and of its harbor are in accordance with the objectives of the Operational Programme “Development of Economic Environment” of Estonia and more precisely with the priority 3: Transport investments of strategic importance (European Commission, 2013g). This priority aimed at providing infrastructure to allow the flow of goods in Estonia and from Tallinn.

The construction of logistics [14] and consolidation centers [15] will allow enhance economic development of the region via the transit of good, and it will also reinforce the competitive place of the Baltic region as the transfer point between Europe and Asia. This is thus in accordance with the Operational Central Baltic (European Commission, 2013i).

It can thus be concluded from the previous analysis that the infrastructure projects suggested in this paper are in accordance with the main priorities of the European Union regarding transportation, environment

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and regional policy.

7.5.2 Political Cooperation Most of the infrastructures projects describe above are cross-boundary projects, meaning that the implementation of those projects will required the collaboration of stakeholders from different countries.

It is thus necessary to have good relationship with the neighbor countries to come with successful projects.

Cooperation is thus essential, to come to the best of each country.

Regarding the intra Baltic Countries projects, they should be decided on the existing common institutions that are the Baltic Assembly and the Baltic Council of Minister. Those institutions should come with an agreement regarding the spare of the costs of those infrastructures.

For the Rail Baltica the cooperation has been done between Finland, the three Baltic States and Poland.

The goal is to set a joint declaration between those countries that will lead to a joint venture in the future (15min.lt, 2013). Implementation of such joint venture is facilitated by the fact that all the countries are parted of the Europe Union and by the fact that European Union authorities play a major role in this project.

The situation is even more complex for projects that do not involved Member States of the European Union, as Russia or Belarus. The political relations with those countries need to be really close. Indeed, the projects 5, 6, 7 and 17, are projects that should

be implemented by both Baltic countries and Russia.

For some of these projects, as the direct link between mainland Russia and Kaliningrad, Russia will be the main financing stakeholders because most of the benefits of this projects will to Russia. The best option to implement those projects seems to be again the joint venture, to come with cross-border governance.

For each project it could be useful that each country regroup the main stakeholders into one consortium to make the communication between the different countries easier.

7.5.3 Social Support Other actors from the perspective of social support, like NGO, media, science institutions and etc., their options or attitudes could have both positive and negative impacts on the implementation plans. For example, the construction of Rail Baltica in Poland had been delayed because it has negative environment impacts of the national natural reserve area. Therefore, these parties should be kept informed. Especially, the project team should pay high attention to the environmental impacts of the infrastructure projects, because the objections of local citizens may impede a lot. In order to deal with the political and social support, the strategic management plan has been designed as follows.

Table 7.4 Strategic Management Plan list of Stakeholders and How to Approach

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7.6 Ex-Post Policy Evaluation When the projects will be implemented it will be interesting to evaluate what are the concrete benefits of those projects. This could be realized thanks to expost evaluation. The ex-post evaluation will notably allow learning from the experience of those projects In the evaluation of the policy advice two issues have to be distinguished: the measurement of goal achievement and the measurement of policy effectiveness. The measurement of goal achievement is relatively straightforward: with key performance indicators the change can be directly measured.

This is more difficult for the measurement of policy effectiveness: in order to measure the effectiveness a measurement of the situation with and without the intervention should be measured. Once the policy intervention is executed it is unknown what the situation would have been without the intervention (Khandker, 2010). The situation before and after the intervention can be interpreted as with and without the intervention, although this does not take into account external effects. Khandker (2010) specifies the situation in which the whole population is affected by the intervention as eligible for the reflexive method since there is no control-group.

In order to monitor and evaluate the recommended policy several key performance indicators (KPIs) are formulated. A distinction between responsive and slowly-responding KPIs is made. The responsive KPIs will show a difference if it is measured shortly before and directly after the intervention. Measuring

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in a short time-span limits the effect of external forces on the measurement. The slowly-responding KPIs will show gradual change over time and need continuous measurement, both before, during and after the intervention so that the structural effect can be established. For these slowly responding KPIs attention should be paid to external effects.

Each of the KPIs is deduced from the objective tree and is made as operational as possible. This is done except for the objectives that have no clearly measurable indicator, such as modernization and stable international relationships. These objectives are likely to be more influenced by other factors.

The Baltic States currently cooperate via a parliamentary institution (Baltic Assembly). The Baltic Assembly communicates with the national governments and international and regional organizations about for instance economic affairs, social affairs and environmental protection. Given its central position in the national, regional and international diplomacy and its existing communication channels, the Baltic Assembly can coordinate a regional policy matter such as the ex post policy evaluation of an multimodal infrastructure network effectively. National data is to be gathered by the national governments.

The Baltic Assembly can then aggregate these data and analyze these on a regional level. Moreover, as a regional entity the Baltic Assembly reports to the relevant commissioners in the European Union who can decide to take corrective action if required.

Table 7.5 List of Objectives and their Key Performance Indicators (KPIs)

In this section it was thus highlight that not only technical aspects need to be considered by implementing projects, it should also be think in advance how those projects are going to be fund, support and how they are going to be evaluated to make them successful.

7.7 Conclusions In this chapter an implementation plan is proposed that is demanding but feasible within the time horizon until 2040. Due to the technical nature of some projects, considerable attention has to be paid to the points described in paragraph 7.3. This is crucial for the outcome of the intended transport policy since the actual transportation infrastructure network influences the social support for the transport policy.

This also holds for safeguarding future funding: due diligence toward all the implementationâ&#x20AC;&#x2122;s technical details and technical and financial planning create a robust destination for funding. Measuring the proposed key performance indicators assure that the effectiveness of the proposed policies are sufficiently monitored and can yield as a starting point for further shaping policy over the coming 30 years.

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8. Policy Advice In this chapter, we will take a look at the conclusions drawn form the previous chapters and formulate a final policy advice that is given to the Commissioners illustrating the best way to use this advice.

8.1 Conclusions

8.2 Final Advice to the Commissioners

Estonia, Latvia and Lithuania currently face problems with both passenger and freight transportation such as with poor railway connections, unacceptable travel times and emission problems. Moreover, the current infrastructure has limited possibilities for diverse cargo shipment. This report aimed to give a policy advise that supports the integration of the Baltics into the European Union and to help strengthen social and economic relations between Western Europe, the Baltic States and the East. This is attained by developing transport network policy for Estonia, Latvia and Lithuania.

The E.U. Commissioners are advised to mandate a task force or work group to coordinate the implementation of the transport policy proposed in this policy advice.

In total 17 new and expansion projects, 3 maintenance and 3 follow-up projects are proposed. These projects improve the current transportation system by improving connections and lowering travel times.

Also, the projects are conducive to environmentally friendly modernization by incorporating technologies and techniques that minimize pollution and by increasing the use of public transport. Moreover, the recommended projects stabilize the economy by enabling increased global trading and facilitating employment in the logistics sector.

• To define the specific implementation details by consulting local authorities;

The proposed projects are divided into three priorities. Table 8.1 gives an overview of the prioritized infrastructure projects per scenario.

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The following short-term action points for this task force or work group can be formulated: • To obtain more complete information about the possible funding and to develop a sound financial plan; • To assess the effects of the proposed infrastructure projects in a quantitative manner regarding social, economic and environmental aspects; • To involve the Baltic Assembly and neighboring countries in the policy process; • To establish zero measurements regarding accessibility and travel times;

• To anticipate on future developments toward 2040 and select the most likely scenario.

Table 8.1 All infrastructures are prioritized

The number before each project name is the sub-priority under the Priority I, II or III. For example, 1. Build logistics centers means this project has the first priority under Priority I. The number after each project name is the number of this project in the infrastructure list. For example, Build logistics centers (No.14) means this project is the 14th project in the infrastructure list which is showed previously.

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9. References

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BĂśhme, Hans.(1998). Transport in the Baltic Sea region: perspectives for the economies in transition. Kiel Institute for the World Economy, Germany

European Commission (2011). White paper. Roadmap to a single European Transport Area-Towards a competitive and resource efficient transport system.

Dariusz Milewski. Inland water transport in the Baltic Sea Region (BSR) Transportation System.

European Commission (2013). Regional Policy-Inforegio/The Funds. Retrieved on October 2013 from http://ec.europa. eu/regional_policy/thefunds/cohesion/index_en.cfm.

De Jong, G., Gunn, H., Ben-Akiva, M., (2004). A meta-model for passenger and freight transport in Europe. Transport Policy 11 (4), 329â&#x20AC;&#x201C;344 D.M. Haytter.(1993) Prospects for maritime developments in the Baltic. Maritime Economic Research Centre, Rotterdam, the Netherlands Ecolines International Bus Lines (2013), Select you Journey.

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1.10.1381047326&__utmc=245410960&__utmx=-&__ Estonian Logistics and Transit Association (2013). Our mission. Retrieved october 2013 from: http://www.transit. ee/our-mission

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Eteris, Eugene. (2013). Towards quality waterway transport in EU. The Baltic Course. http://www.baltic-course.com/ eng/good_for_business/?doc=80595

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Development Programmes. Latvia. Retrieved on October 2013 from: http://ec.europa.eu/regional_policy/country/ prordn/details_new.cfm?gv_PAY=LV&gv_reg=ALL&gv_ PGM=1168&LAN=7&gv_per=2&gv_defL=7 European Commission (2013f). Regional Policy-Inforegio.

Development Programmes. Lithuania. Retrieved on October 2013 from: http://ec.europa.eu/regional_policy/country/ prordn/details_new.cfm?gv_PAY=LT&gv_reg=ALL&gv_ PGM=1169&LAN=7&gv_per=2&gv_defL=7 European Commission (2013g). Regional Policy-Inforegio.

Development Programmes. Estonia. Retrieved on October 2013 from: http://ec.europa.eu/regional_policy/country/ prordn/details_new.cfm?gv_PAY=EE&gv_reg=ALL&gv_ PGM=1107&LAN=7&gv_per=2&gv_defL=7 European Commission (2013h). Regional Policy-Inforegio.

Development Programmes. Baltic Sea Region Programme.

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European Commission (2013d). Mobility and Transport.

International Relations. Retrieved on October 2013 from: http://ec.europa.eu/transport/themes/international/index_ en.htm

European Investment Bank, (2013). What is the EIB? Retrieved on October 2013 from: http://www.eib.org/about/ index.htm

European Bank for Reconstruction and Development, (2013). What we do. Retrived on October 2013 from: http://www.ebrd.com/pages/about/what.shtml 15min. lt (26 July 2013). Lithuania and European Commission reach compromise on Rail Baltica. Retrieved on October 2013 from: http://www.15min.lt/en/article/politics/lithuaniaand-european-commission-reach-compromise-on-railbaltica-526-356817 Eurostat (2013), Passengers transport statistics. Retrived Spetember 2013 from: http://epp.eurostat.ec.europa. eu/statistics_explained/index.php/Passenger_transport_ statistics Gražvydas Jakubauskas,( 2013). High priority transport infrastructure projects in EATL countries: the case of Lithuania. UNECE Working Party on Transport Trends and Economics, Joint Workshop on “Financing Transport Infrastructure” 10 Sept., 2013, Geneva, Switzerland .

Haynes, K.E., GiVord, J.L., Pelletiere, D., (2004). Sustainable transportation institutions and regional evolution: global and local perspectives. Journal of Transport Geography 13 (3), 207–221.

Kirch, Aksel. (2011). Estonia and other countries of the Baltic Sea region as an actor of Intergration Studies Khandker, R., Koolwal, G. & Samad, H. (2010). Handbook on Impact Evaluation: Quantitative Methods and Practices.

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Michael Doubrovsky (2005), Ukrainian and Russian waterways and the development of European transport corridors., pages Nordregio (2013), The missing Railway links in teh BSR. Available at http://www.nordregio.se/en/Metameny/AboutNordregio/Journal-of-Nordregiodevelopment: conceptual approach. Tallin University of Technology. European /2009/ Journal-of-Nordregio-no-1-2009/The-missing-railway-linksin-the-BSR/.

Parliamentary Assembly. (2010). Fostering the socioeconomic potential of the Baltic Sea Region. Economic Affairs and Development

Serry, A. & Thorez, P. (2011). The Russian-Baltic states boundary: a limit between peripheries or a link between European Union and the post-soviet states. Twenty years later (1991-2001). Retrieved from http://halshs.archivesouvertes.fr/docs/00/82/71/60/PDF/Paper_Serry_Thorez. pdf; Stiller, S. & Wedemeier, J. (2011). The future of the Baltic Sea region: Potentials and challenges. Hamburg Institute of International economics. Retrieved from http://www. netzwerk-ebd.de/fileadmin/files_ebd/PDF-Dateien/HWWI_ Policy_Report_Nr16_English.pdf;

Port of Klaipeda (2013). LNG Terminal. Retrieved October 2013, from: http://www.portofklaipeda.lt/klaipeda-lngterminal

Stiller, S. & Biermann, U. (2012). Strategies and promotion of innovation in regional policies around the Mare Balticum.

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Purju, A. (2004). Foreign trade between the Baltic States and Russia: trends, institutional settings and impact of the EU enlargement. Turku School of Economics. Electronic Publication of Pan-European Institute; Riga International Airport(2013), Route Network. Retrieved September 2013 from: http://www.riga-airport.com/en/ main/flights/route-network

The Baltic Course (2013). EU funds to Rail Baltica decrease by 10%. Retrieved on October 2013 from: http://www. baltic-course.com/eng/transport/?doc=70296

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U.S. Department of State (2011). Lithuani Profile. Retrieved from http://www.state.gov/outofdate/bgn/lithuania/191349. htm;http://www.ponarseurasia.org/sites/default/files/policymemos-pdf/pepm200.pdf; Vilnius International Airport (2013), Flights Map. Retrieved September 2013 from: http://www.vilnius-airport.lt/en/ planning-a-trip/flight-map/ Winkler, K. (2006). Tourism demand and trends in the Baltic Sea Region. Retrieved from http://sbba.info/crossingperspectives/tourism-demand-and-trends-in-the-balticsea-region/; Wilkipedia (2013), Riga International Airport. Retrieved September 2013 from: http://en.wikipedia.org/wiki/Riga_ International_Airport#cite_note-10

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Appendices

Appendix A - Road Network in the Baltics Estonia National road are the basis of the Estonian road network. They are divided in 3 classes: main roads (1,601 km), basic roads (2,391 km) and secondary roads (12,425 km).

The main roads of Estonia are showed on the Figure A.1.

Figure A.1 Main road network of Estonia

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Latvia There is no expressway in Latvia. The State Main Roads are showed in Figure A.2.

Figure A.2 Main road network of Latvia

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Lithuania Lithuania has a clear network. Two highways can be classified as motorways: • A1 Vilnius–Kaunas–Klaipeda (10–304.5 km) : That connects the capital Vilnius to the port of Klaipeda via the second largest city of Lithuania, Kaunas.

• A2 Vilnius–Panevezys (12–132.7 km); Lithuanian roads and highways are free of charge for light vehicles. But if buses or good vehicles want to travel on the highest level of road in Lithuania A1–A18 they have to pay a user charge by buying a vignette.

The map representation of the road network of Lithuania is showed in Figure A.3.

Figure A.3 Main road network of Lithuania

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Appendix B - Rail Networks in the Baltics Estonia Railways in Estonia today are used mostly for freight transport, but also for passenger traffic. Passenger transport is most frequent near Tallinn.

Two different companies are operated within the country Elektriraudtee ( Eeeti Raudtee) and Edelaraudtee, as can be seen on the map above. Go Rail offers transportation towards Russia as can be observed below.

Figure A.4 Main rail network of Estonia

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Latvia The Railway operator is Latvian Railway. Public use railway network has 151 stations.

Figure A.5 Main rail network of Latvia

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Lithuania Lithuanian railway carries 7 million passengers per year. Direct rail routes link Lithuania with Russia, Belarus, Latvia, Poland, Ukraine, Germany and the rest of Europe, the main transit route between Russia and its Kaliningrad district passes Lithuania. It is operated by Lietuvis Gelezinkeliai.

Vilnius-Kaunas, Vilnius-Klaipėda, Šiauliai-Klaipėda, Šiauliai-Panevėžys and Vilnius-Šiauliai are among the pairs of cities that can be travelled on rail. .

Figure A.6 Main rail network of Lithuania

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Appendix C - Main Baltic Rail Lines & Time Table

Table A.1 Baltic & International Rail Lines, Frequency and Travel Time

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Appendix D - Airports

Figure A.7 All flights routes to and from Vilnius Airport in Latvia - one of the major current airport hubs in the Baltics

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Appendix E - International Ferry Routes (Passengers)

Table A.2 Destinations of International Ferry Routes, Frequency and Travel Time.

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Appendix F - Scenarios’ Factors for MCDA analysis Effects of new and expansion projects in scenario EU-Topia A1 – Rail Baltica Economic: - increase in GDP growth (mid) - stabilization of Baltic economy against European economy (mid) - increase in goods exported (high) - increase in goods imported (high) Geographic / Spatial: - decline in natural resources (low) - disruptions to natural environments (mid) - decrease in pollutants (high) - increase of land use for living and transport (mid) Demographic: - increase in skilled and labour workers (low) Transport: - increase in the use of public transport (mid) - decreased use of cars (mid) - improved accessibility of the Baltics to Western Europe (high) - decrease in tourism in the Baltic States coming in by road (low) - increased tourism in the Baltic States coming in by rail (low) - increase in cargo shipment by rail (high) - decrease in cargo shipment by road (mid)

- decrease in cargo shipment by ship (low) A2– Transform the Via Baltica into a Motorway Economic: - increase in GDP growth (low) - increase in goods exported (mid) - increase in goods imported (mid) - new industry establishes in the Baltics (low)

Geographic / Spatial: - decline in natural resources (low) - disruption to natural environments (mid) - increase of land use for living and transport (mid) Demographic: - decrease amount of emigration (low) - increase in skilled and labor workers (low)

Geographic / Spatial: - decline in natural resources (mid) - disruption to natural environments (high) - increase in pollutants (high) - increase in pollutants in urban area (high) - increase of land use for living and transport (mid)

Transport: - increase in the use of public transport (low) - decreased use of cars (low) - improved accessibility of the Baltics to Western Europe (high) - increase in cargo shipment by rail (mid)

Demographic: - negligible effects Transport: - decrease in the use of public transport (mid) - increased use of cars (mid) - improved accessibility of the Baltics to Western Europe (mid) - increased tourism in the Baltic States coming in by road (low) - increase in cargo shipment by road (mid)

A5 – Develop Riga-Moscow high speed railway line Economic: - increase in GDP growth (high) - stabilization of Baltic economy against European economy (high) - stabilization of Baltic economy against Russian economy (mid) - increase in goods exported (high) - increase in goods imported (high) - new industry established in the Baltics (mid)

A3- Building New European gauge tracks Economic: - increase in goods exported (mid) - increase in goods imported (mid)

Geographic / Spatial: - decline in natural resources (low) - disruption to natural environments (mid) - increase in pollutants (mid)

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- increase in pollutants in urban area (low) - increase of land use for living and transport (mid) Demographic: - increase in skilled and labour workers (mid) Transport: - increase in the use of public transport (mid) - decreased use of cars (low) - improved accessibility of the Baltics to Russia (high) - increase in cargo shipment by rail (high) - decrease in cargo shipment by road (mid) A6 – Develop Tallinn – St. Petersburg highspeed railway line Economic: - increase in GDP growth (mid) - stabilization of Baltic economy against European economy (mid) - stabilization of Baltic economy against Russian economy (high) - increase in goods exported (high) - increase in goods imported (high) - new industry established in the Baltics (high) Geographic / Spatial: - decline in natural resources (low) - disruption to natural environments (mid) - increase in pollutants (mid) - increase in pollutants in urban area (low) - increase of land use for living and transport (mid) Demographic: - increase in skilled and labour workers (mid)

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Transport: - increase in the use of public transport (mid) - decreased use of cars (low) - improved accessibility of the Baltics to Russia (high) - increase in cargo shipment by rail (high) - decrease in cargo shipment by road (high) A7 – development of ITS – electronic queue management system Economic: - increased income from tourism (low) Geographic / Spatial: - n/a Demographic: - n/a Transport: - improved accessibility of the Baltics to Western Europe (low) - improved accessibility of the Baltics to Russia (low) - increased tourism (low) A8 – Building new storage facilities in Tallinn Economic: - increase in GDP growth (low) - new industry established in the Baltics (low) Geographic / Spatial: - disruption to natural environments (mid) - increase in pollutants (low) - increase in pollutants in urban area (low) - increase of land use for living and transport (mid)

Demographic: - increase in skilled and labour workers (mid) Transport: - increase in cargo shipment by air (mid) - increase in cargo shipment by rail (mid) - increase in cargo shipment by road (mid) - increase in cargo shipment by ship (low) A9 - Expansion of Tallinn airport Economic: - increase in GDP growth (low) - new industry established in the Baltics (mid) Geographic / Spatial: - disruption to natural environments (high) - increase in pollutants (mid) - increase of land use for living and transport (mid) Demographic: - increase in skilled and labour workers (high) Transport: - increase in cargo shipment by air (mid) - increase in the use of public transport (high) - improved accessibility of the Baltics to Western Europe (high) - improved accessibility of the Baltics to Asia (high) - increased tourism in the Baltic States coming in by air (high) A10 – Build new infrastructure in Riga airport Economic: - increase in GDP growth (low)

Geographic / Spatial: - disruption to natural environments (high) - increase in pollutants (mid) - increase of land use for living and transport (mid) Demographic: - increase in skilled and labour workers (high) Transport: - increase in the use of public transport (high) - improved accessibility of the Baltics to Western Europe (high) - increased tourism in the Baltic States coming in by air (high) A11 - New infrastructure in harbor of Tallinn Economic: - increase in GDP growth (high) - increase in goods exported (high) - increase in goods imported (high) Geographic / Spatial: - disruption to natural environments (mid) - high density urbanization (high) - increase in pollutants in urban area (low) - concentration of population in coast areas (low) - increase of land use for living and transport (low) Demographic: - increase in skilled and labour workers (mid) Transport: - increased tourism in the Baltic States coming in by ferry (low) - increase in cargo shipment by ship (high)

A12 New infrastructure in harbor of Riga Economic: - increase in GDP growth (mid) - increase in goods exported (high) - increase in goods imported (high) Geographic / Spatial: - disruption to natural environments (mid) - high density urbanization (high) - increase in pollutants in urban area (low) - concentration of population in coast areas (low) - increase of land use for living and transport (low) Demographic: - increase in skilled and labour workers (mid) Transport: - increased tourism in the Baltic States coming in by ferry (low) - increase in cargo shipment by ship (high)

- increase in skilled and labour workers (mid) Transport: - increased tourism in the Baltic States coming in by ferry (low) - increase in cargo shipment by ship (high) A14 â&#x20AC;&#x201C; Build logistics centers Economic: - increase in GDP growth (low) - increase in goods exported (mid) - increase in goods imported (mid) - new industry established in the Baltics (mid) Geographic / Spatial: - high density urbanization (mid) - increase in pollutants in urban area (mid) - concentration of population around logistic areas (mid) - increase of land use for living and transport (mid)

A13 - New infrastructure in harbour of Klaipeda Economic: - increase in GDP growth (mid) - increase in goods exported (mid) - increase in goods imported (mid)

Demographic: - increase in skilled and labor workers (high)

Geographic / Spatial: - disruption to natural environments (mid) - high density urbanization (mimd) - increase in pollutants in urban area (low) - concentration of population in coast areas (low) - increase of land use for living and transport (low)

A15 â&#x20AC;&#x201C; Build consolidation centers Economic: - GDP growth (low) - new industry established in the Baltics (low)

Demographic:

Transport: - increase in cargo shipment by rail (high)

Geographic / Spatial: - disruption to natural environments (mid) - increase in pollutants in urban area (mid)

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- increase of land use for living and transport (mid)

- decrease in skilled and labour workers (low)

Demographic: - Negligible effects

Transport: - increase in the use of public transport (mid)

Transport: - increase in cargo shipment by rail (mid) - increase in cargo shipment by road (mid) A16 â&#x20AC;&#x201C; Modal shift toward inland waterways Economic: - increase in GDP growth (low) - increase in goods exported (low) - increase in goods imported (low) Geographic / Spatial: - disruption of the natural environments (mid) - increase in pollutants (low) Demographic: - n/a Transport: - decrease in cargo shipment by road and rail (mid) - increase in cargo shipment by ship (mid) A17 Create a specific line between Russia (mainland) and Kaliningrad through Lithuania Economic: - not applicable Geographic / Spatial: - increase of land use for living and transport (mid) Demographic:

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Effects of new and expansion projects in Scenario ReIndustrialization of the West C1 â&#x20AC;&#x201C; Rail Baltica Economic: - increase in GDP growth (high) - stabilization of Baltic economy against European economy - increase in goods imported from Europe (high) - increase in goods exported to Europe (high) - increase in transit goods (high) Geographic / Spatial: - increase in pollutants (mid) - increase density urbanization (mid) - increase in pollutants in urban area (mid) - increase of land use for living and transport (high) Demographic: - increase of Baltic population (high) - increase amount of immigration (mid) - decrease amount of emigration (mid) - increase in skilled and labour workers (high) Transport: - increase in the use of public transport (mid) - decrease use of cars (mid) - improved accessibility of the Baltics to Western Europe and vice versa - increased tourism in the Baltic States coming in by rail (mid) - decreased tourism in the Baltic States coming in by

air (low) - decreased tourism in the Baltic States coming in by ferry (mid) - increase in cargo shipment by rail (high) - decrease in cargo shipment by air (mid) - decrease in cargo shipment by road (mid) - decrease in cargo shipment by ship (mid) C2 – Transform the Via Baltica into a Motorway Economic: - increase in GDP growth (mid) - stabilization of Baltic economy against European economy - increase in goods imported from Europe (mid) - increase in goods exported to Europe (mid) - increase in transit goods (mid) Geographic / Spatial: - increase in pollutants (mid) - increase density urbanization (mid) - increase in pollutants in urban area (high) - increase of land use for living and transport (high) Demographic: - increase of Baltic population (mid) - increase amount of immigration (mid) - decrease amount of emigration (mid) - increase in skilled and labour workers (mid) Transport: - decrease in the use of public transport (mid) - increase use of cars (mid) - improved accessibility of the Baltics to Western Europe and vice versa - decreased tourism in the Baltic States coming in by

rail (low) - decreased tourism in the Baltic States coming in by air (low) - decreased tourism in the Baltic States coming in by ferry (mid) - decrease in cargo shipment by rail (low) - decrease in cargo shipment by air (mid) - increase in cargo shipment by road (high) - decrease in cargo shipment by ship (mid) C3 – Building new European gauge tracks Economic: - increase in GDP growth (high) - stabilization of Baltic economy against European economy - increase in goods imported from Europe (high) - increase in goods exported to Europe (high) - increase in transit goods (high) Geographic / Spatial: - increase in pollutants (mid) - increase density urbanization (mid) - increase in pollutants in urban area (mid) Demographic: - increase of Baltic population (high) - increase amount of immigration (mid) - decrease amount of emigration (mid) - increase in skilled and labour workers (mid) Transport: - increase in the use of public transport (mid) - decrease use of cars (mid) - improved accessibility of the Baltics to Western Europe and vice versa

- increased tourism in the Baltic States coming in by rail (mid) - decreased tourism in the Baltic States coming in by air (low) - decreased tourism in the Baltic States coming in by ferry (mid) - increase in cargo shipment by rail (high) - decrease in cargo shipment by air (mid) - decrease in cargo shipment by road (mid) - decrease in cargo shipment by ship (mid) C4 – Keeping the Russian gauge for the primary region rail routes Due to the collapse of the Eastern economy and political stability, the Baltics should take the chance to stabilize their economy to the West and become the main transport of passenger and cargo hub of the West to the East.

C5 – Develop a Riga-Moscow highspeed rail track Economic: - increase in GDP growth (mid) - increase in goods exported to the East (high) - increase in transit goods through Baltics from Europe to the East (high) Geographic / Spatial: - disruption of the natural environment (mid) - increase in pollutants (mid) - increase of land use for living and transport (high) Demographic: - increase amount of immigration (mid) - decrease amount of emigration (mid)

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- increase in skilled and labour workers (mid) - increase in scholars (low) Transport: - increase in the use of public transport (mid) - decrease use of cars (mid) - increased tourism in the Baltic States coming in by rail (low) - increase in cargo shipment by rail (mid) - decrease in cargo shipment by air (low) - decrease in cargo shipment by road (low) C6 – Develop a Tallin-St. Petersburg highspeed rail track Economic: - increase in GDP growth (mid) - increase in goods exported to the East (high) - increase in transit goods through Baltics from Europe to the East (high) Geographic / Spatial: - disruption of the natural environment (mid) - increase in pollutants (mid) - increase of land use for living and transport (high) Demographic: - increase amount of immigration (mid) - decrease amount of emigration (mid) - increase in skilled and labour workers (mid) - increase in scholars (low) Transport: - increase in the use of public transport (mid) - decrease use of cars (mid) - increased tourism in the Baltic States coming in by

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rail (low) - increase in cargo shipment by rail (mid) - decrease in cargo shipment by air (low) - decrease in cargo shipment by road (low) C7 – Development of electronic queue management system Economic: - increased income from tourism (low) Geographic / Spatial: - n/a Demographic: - n/a Transport: - improved accessibility of the Baltics to Western Europe (low) - improved accessibility of the Baltics to Russia (low) - increased tourism (low) C8 – Build new storage facilities in Tallinn Economic: - increase in GDP growth (mid) - increase in goods imported from the East (mid) - increase in goods exported to the East (mid) - increase in goods imported from the West (mid) - increase in goods exported to the West (mid) - increase in transit goods (high) Geographic / Spatial: - high density urbanization (high) - increase of in pollutants in urban area (mid)

Demographic: - increase of Baltic population (mid) - increase amount of immigration (mid) - decrease amount of emigration (mid) - increase in skilled and labour workers (high) Transport: - improved accessibility of the Baltics and the West to the East - increase in cargo shipment by rail (mid) - increase in cargo shipment by air (mid) - increase in cargo shipment by road (low) - increase in cargo shipment by ship (mid) C9 – Expansion of the Tallinn airport Economic: - increase in GDP growth (mid) - increase in goods imported from the East (mid) - increase in goods exported to the East (mid) - increase in goods imported from the West (mid) - increase in goods exported to the West (mid) - increase in transit goods (high) Geographic / Spatial: - disruption of the natural environment (mid) - increase in pollutants (mid) - high density urbanization (high) - increase in pollutants in urban area (mid) Demographic: - increase of Baltic population (mid) - increase amount of immigration (mid) - decrease amount of emigration (low) - increase in skilled and labour workers (high) - increase in scholars (mid)

Transport: - increase in cargo shipment through the Baltics - increase tourism in the Baltic States coming in by air (mid) - increase tourism in the Baltic States coming in by ferry (low) - decrease tourism in the Baltic States coming in by road (mid) - increase tourism in the Baltic States coming in by rail (low) - increase in cargo shipment by rail (mid) - increase in cargo shipment by ship (mid) - increase in cargo shipment by air (mid) - decrease in cargo shipment by road (low) C10 – New infrastructure in Riga Airport Economic: - increase in GDP growth (mid) - increase in goods imported from the East (mid) - increase in goods exported to the East (mid) - increase in goods imported from the West (mid) - increase in goods exported to the West (mid) - increase in transit goods (high) Geographic / Spatial: - disruption of the natural environment (mid) - increase in pollutants (mid) - high density urbanization (high) - increase in pollutants in urban area (mid) Demographic: - increase of Baltic population (mid) - increase amount of immigration (mid) - decrease amount of emigration (low) - increase in skilled and labour workers (high)

- increase in scholars (mid) Transport: - increase in cargo shipment through the Baltics - increase tourism in the Baltic States coming in by air (mid) - increase tourism in the Baltic States coming in by ferry (low) - decrease tourism in the Baltic States coming in by road (mid) - increase tourism in the Baltic States coming in by rail (low) - increase in cargo shipment by rail (mid) - increase in cargo shipment by ship (mid) - increase in cargo shipment by air (mid) - decrease in cargo shipment by road (low) C11 – Improve and expand harbors Tallinn Economic: - increase in GDP growth (mid) - increase in goods imported from the East (low) - increase in goods exported to the East (mid) - increase in goods imported from the West (mid) - increase in goods exported to the West (mid) - increase in transit goods (high) Geographic / Spatial: - disruption of the natural environment (mid) - increase in pollutants (high) - high density urbanization (high) - increase in pollutants in urban area (low) Demographic: - increase of Baltic population (mid) - increase amount of immigration (mid)

- decrease amount of emigration (mid) - increase in skilled and labour workers (high) Transport: - increase in cargo shipment through the Baltics - increase tourism in the Baltic States coming in by ferry (low) - increase in cargo shipment by rail (mid) - increase in cargo shipment by ship (high) - increase in cargo shipment by air (low) - decrease in cargo shipment by road (low) C12 – Improve and expand harbors Riga Economic: - increase in GDP growth (mid) - increase in goods imported from the East (low) - increase in goods exported to the East (low) - increase in goods imported from the West (mid) - increase in goods exported to the West (mid) - increase in transit goods (high) Geographic / Spatial: - disruption of the natural environment (mid) - increase in pollutants (high) - high density urbanization (high) - increase in pollutants in urban area (low) Demographic: - increase of Baltic population (mid) - increase amount of immigration (mid) - decrease amount of emigration (mid) - increase in skilled and labour workers (high) Transport: - increase in cargo shipment through the Baltics

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- increase tourism in the Baltic States coming in by ferry (low) - increase in cargo shipment by rail (mid) - increase in cargo shipment by ship (high) - increase in cargo shipment by air (low) - decrease in cargo shipment by road (low) C13 – Improve and expand harbors Klaipeda Economic: - increase in GDP growth (low) - increase in goods exported to the East (mid) - increase in goods imported from the West (mid) - increase in goods exported to the West (mid) - increase in transit goods (high)

Geographic / Spatial: - disruption of the natural environment (low) - increase in pollutants (low) - high density urbanization (mid) - increase in pollutants in urban area (mid)

Geographic / Spatial: - disruption of the natural environment (mid) - increase in pollutants (high) - high density urbanization (high) - increase in pollutants in urban area (low)

Demographic: - increase of Baltic population (mid) - increase amount of immigration (low) - decrease amount of emigration (low) - increase in skilled and labour workers (high)

Demographic: - increase of Baltic population (low) - increase amount of immigration (low) - decrease amount of emigration (low) - increase in skilled and labour workers (low)

Transport: - increase in cargo shipment through the Baltics - increase in cargo shipment by rail (mid) - increase in cargo shipment by air (mid) - increase in cargo shipment by road (mid) - increase in cargo shipment by ship (mid)

Transport: - increase in cargo shipment through the Baltics - increase tourism in the Baltic States coming in by ferry (low) - increase in cargo shipment by rail (mid) - increase in cargo shipment by ship (high) - increase in cargo shipment by air (low) - decrease in cargo shipment by road (low)

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C14 – Build Logistics Centers Economic: - increase in GDP growth (high) - increase in goods imported from the East (high) - increase in goods exported to the East (high) - increase in goods imported from the West (high) - increase in goods exported to the West (high) - increase in transit goods (high)

C15 – Build Consolidation Centers Economic: - increase in GDP growth (high) - increase in goods imported from the East (high) - increase in goods exported to the East (high) - increase in goods imported from the West (high) - increase in goods exported to the West (high)

- increase in transit goods (high) Geographic / Spatial: - disruption of the natural environment (mid) - increase in pollutants (high) - wide spread of population (mid) - increase of land use for living and transport (mid) Demographic: - increase of Baltic population (mid) - increase amount of immigration (low) - decrease amount of emigration (low) - increase in skilled and labour workers (high) Transport: - increase in cargo shipment through the Baltics - increase in cargo shipment by rail (mid) - increase in cargo shipment by air (mid) - increase in cargo shipment by road (mid) - increase in cargo shipment by ship (mid) C16 – Modal shift toward inland waterways Economic: - increase in GDP growth (low) - increase in goods exported (mid) Geographic / Spatial: - disruption of the natural environments (mid) - increase in pollutants (low) Demographic: - n/a Transport: - decrease in cargo shipment by road and rail (mid)

- increase in cargo shipment by ship (mid)

Effects of new and expansion projects in Scenario Rise of the East F1 – Rail Baltica Economic: - increase in GDP growth (mid) - stabilization of Baltic economy against Russian economy - increase in goods imported from Europe (mid) - increase in goods exported to Europe (mid) - decrease in transit goods Geographic / Spatial: - increase in pollutants (mid) - increase of land use for living and transport (high) Demographic: - increase of Baltic population (mid) - increase amount of immigration (low) - decrease amount of emigration (mid) - increase in skilled and labour workers (high) Transport: - increase in the use of public transport (mid) - decreased use of cars (mid) - improved accessibility of Europe to the East - tourism will halt in the Baltics - increase in cargo shipment by rail (mid) - decrease in cargo shipment by air (low) - decrease in cargo shipment by road (mid) - decrease in cargo shipment by ship (mid)

F2 – Transform the Via Baltica into a Motorway Due to the collapse of the Western economics and political stability, the Baltics will receive less visitors and cargo from the West making the connection via car obsolete since the Baltics will already connected through the Rail Baltics. At this point, it will be important to strengthen their connections to the East.

F3 – Building new European gauge tracks Economic: - increase in GDP growth (low) - increase in goods exported to Europe (mid) - increase in goods imported from Europe (mid) - decrease in transit goods Geographic / Spatial: - disruption of the natural environment (mid) - increase in pollutants (mid) - increase of land use for living and transport (mid) Demographic: - increase of Baltic population (mid) - increase amount of immigration (low) - decrease amount of emigration (mid) - increase in skilled and labor workers (high) Transport: - increase in the use of public transport (mid) - decreased use of cars (mid) - increase in cargo shipment by rail (mid) - decrease in cargo shipment by air (low) - decrease in cargo shipment by road (mid) - decrease in cargo shipment by ship (mid) F4 – Keeping the Russian gauge for the NEW

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AND EXPANSION region rail routes Economic: - increase in GDP growth (mid) - stabilization of Baltic economy against Russian economy - increase in goods imported from the East (high) - increase in goods exported to the East (high) - increase in transit goods (mid) Geographic / Spatial: - wide spread of population (mid) Demographic: - increase of Baltic population (mid) - increase amount of immigration (mid) - decrease amount of emigration (mid) - increase in skilled and labour workers (mid) - increase in scholars (mid) Transport: - increase in the use of public transport (mid) - decreased use of cars (mid) - improved accessibility of the Baltics to Russia - increase in cargo shipment by rail (mid) - decrease in cargo shipment by air (low) - decrease in cargo shipment by road (mid) - decrease in cargo shipment by ship (mid) F5 â&#x20AC;&#x201C; Develop a Riga-Moscow high speed rail track Economic: - increase in GDP growth (high) - stabilization of Baltic economy against Russian economy - increase in goods imported from the East (high)

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- increase in goods exported to the East (high) - increase in transit goods (high) Geographic / Spatial: - disruption of the natural environment (mid) - increase in pollutants (high) - high density urbanization (high - increase in pollutants in urban area (high) - increase of land use for living and transport (mid) Demographic: - increase of Baltic population (high) - increase amount of immigration (mid) - decrease amount of emigration (mid) - increase in skilled and labour workers (high) - increase in scholars (mid) Transport: - increase in the use of public transport (mid) - decreased use of cars (mid) - improved accessibility of the Baltics to Russia - increase in cargo shipment by rail (high) - decrease in cargo shipment by air (low) - decrease in cargo shipment by road (mid) - decrease in cargo shipment by ship (mid) F6 â&#x20AC;&#x201C; Develop a Tallin-St. Petersburg highspeed rail track Economic: - increase in GDP growth (high) - stabilization of Baltic economy against Russian economy - increase in goods imported from the East (high) - increase in goods exported to the East (high) - increase in transit goods (high)

Geographic / Spatial: - disruption of the natural environment (mid) - increase in pollutants (high) - high density urbanization (high) - increase in pollutants in urban area (high) - increase of land use for living and transport (mid) Demographic: - increase of Baltic population (high) - increase amount of immigration (mid) - decrease amount of emigration (mid) - increase in skilled and labour workers (high) - increase in scholars (mid) Transport: - increase in the use of public transport (mid) - decreased use of cars (mid) - improved accessibility of the Baltics to Russia - increase in cargo shipment by rail (high) - decrease in cargo shipment by air (low) - decrease in cargo shipment by road (mid) - decrease in cargo shipment by ship (mid) F7 - Development of electronic queue management system Economic: - increased income from tourism (low) Geographic / Spatial: - n/a Demographic: - n/a Transport: - improved accessibility of the Baltics to Western

Europe (low) - improved accessibility of the Baltics to Russia (low) - increased tourism (low) F8 – Build new storage facilities in Tallinn Economic: - increase in GDP growth (low) - increase in goods imported from the East (mid) - increase in goods exported to the East (mid) - increase in goods imported from the West (mid) - increase in goods exported to the West (mid) - increase in transit goods (mid) Geographic / Spatial: - disruption of the natural environment (mid) - increase in pollutants (high) - increase of land use for living and transport (mid) Demographic: - increase of Baltic population (mid) - increase amount of immigration (mid) - decrease amount of emigration (mid) - increase in skilled and labour workers (mid) Transport: - increase in the use of public transport (mid) - decreased use of cars (mid) - improved accessibility of the Baltics and the West to the East - increase in cargo shipment by rail (mid) - increase in cargo shipment by air (low) - decrease in cargo shipment by road (low) - increase in cargo shipment by ship (low) F9 – Expansion of the Tallinn airport Because of the limited movement of people from

the West to the East, there is limited need for the expansion of the airport.

F10 – New infrastructure in Riga Airport Because of the limited movement of people from the West to the East, there is limited need for the expansion of the airport.

F11 – Improve and expand harbours Tallinn Economic: - increase in GDP growth (mid) - increase in goods exported to the West (mid) - increase in transit goods (mid) Geographic / Spatial: - disruption of the natural environment (mid) - depletion of the natural resources (low) - increase in pollutants (high) - high density urbanization (mid) - increase in pollutants in urban area (low) - increase of land use for living and transport (mid) Demographic: - increase of Baltic population (mid) - increase amount of immigration (mid) - decrease amount of emigration (mid) - increase in skilled and labour workers (high) Transport: - improved accessibility of the Baltics and the East to the North-Western Europe - increase in cargo shipment by rail (high) - decrease in cargo shipment by air (low) - decrease in cargo shipment by road (low) - increase in cargo shipment by ship (high)

F12 – Improve and expand harbors Riga Economic: - increase in GDP growth (mid) - increase in goods exported to the West (mid) - increase in transit goods (mid) Geographic / Spatial: - disruption of the natural environment (mid) - depletion of the natural resources (low) - increase in pollutants (high) - high density urbanization (mid) - increase in pollutants in urban area (low) - increase of land use for living and transport (mid) Demographic: - increase of Baltic population (mid) - increase amount of immigration (mid) - decrease amount of emigration (mid) - increase in skilled and labour workers (high) Transport: - improved accessibility of the Baltics and the East to the North-Western Europe - increase in cargo shipment by rail (high) - decrease in cargo shipment by air (low) - decrease in cargo shipment by road (low) - increase in cargo shipment by ship (high) F13 – Improve and expand harbours Klaipeda Economic: - increase in GDP growth (low) - increase in goods exported to the West (low) - increase in transit goods (mid) Geographic / Spatial:

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- disruption of the natural environment (mid) - depletion of the natural resources (low) - increase in pollutants (high) - high density urbanization (mid) - increase in pollutants in urban area (low) - increase of land use for living and transport (mid) Demographic: - increase of Baltic population (mid) - increase amount of immigration (mid) - decrease amount of emigration (mid) - increase in skilled and labour workers (high) Transport: - improved accessibility of the Baltics and the East to the North-Western Europe - increase in cargo shipment by rail (high) - decrease in cargo shipment by air (low) - decrease in cargo shipment by road (low) - increase in cargo shipment by ship (high) F14 – Build Logistics Centers Economic: - increase in GDP growth (mid) - increase in goods imported from the East (mid) - increase in goods exported to the East (mid) - increase in goods imported from the West (mid) - increase in goods exported to the West (mid) - increase in transit goods (mid) Geographic / Spatial: - disruption of the natural environment (mid) - increase in pollutants (high) - wide spread of population - increase of land use for living and transport (mid)

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Demographic: - increase of Baltic population (mid) - increase amount of immigration (mid) - decrease amount of emigration (mid) - increase in skilled and labour workers (low) Transport: - increase in cargo shipment through the Baltics - increase in cargo shipment by rail (mid) - increase in cargo shipment by air (mid) - increase in cargo shipment by road (mid) - increase in cargo shipment by ship (mid) F15 – Build Consolidation Centers Economic: - increase in GDP growth (low) - increase in goods imported from the East (low) - increase in goods exported to the East (low) - increase in goods imported from the West (low) - increase in goods exported to the West (low) - increase in transit goods (low) Geographic / Spatial: - disruption of the natural environment (high) - disruption of the natural environment (low) - increase in pollutants (high) - wide spread of population - increase of land use for living and transport (high) Demographic: - increase of Baltic population (low) - increase amount of immigration (low) - decrease amount of emigration (low) - increase in skilled and labour workers (low) Transport:

- increase in cargo shipment through the Baltics F16 – Modal shift toward inland waterways Economic: - increase in GDP growth (low) - increase in goods imported and re-exported (mid) Geographic / Spatial: - disruption of the natural environments (mid) - increase in pollutants (low) Demographic: - n/a Transport: - decrease in cargo shipment by road and rail (mid) - increase in cargo shipment by ship (mid) F17 – Create a Specific Line Between Russia (Mainland) and Kaliningrad through Lithuania Economic: - increase in GDP growth (low) - increase in goods imported from the East (low) - increase in goods exported to the East (low) - decrease in transit goods (mid) Geographic / Spatial: - disruption of the natural environment (mid) - disruption of the natural environment (low) - increase in pollutants (low) - increase of land use for living and transport (high) Demographic: - increase in skilled and labour workers (low)

Transport: - increase in cargo shipment through the Baltics - increase in cargo shipment by rail (high) - decrease in cargo shipment by air (low) - decrease in cargo shipment by road (low) - decrease in cargo shipment by ship (low)

Effects of new and expansion projects in scenario Collapse of the East G1 – Rail Baltica Economic: - increase in GDP growth (mid) - stabilization of Baltic economy against European economy (high) - increase in goods exported (mid) - increase in goods imported (mid) - increase in transit goods (low) - new industry established in the Baltics (mid) Geographic / Spatial: - decline in natural resources (low) - disruptions to natural environments (mid) - decrease in pollutants (high) - increase of land use for living and transport (low) Demographic: - increase in skilled and labour workers (mid) - increase in scholars (low) Transport: - increase in the use of public transport (high) - decreased use of cars (mid) - improved accessibility of the Baltics to Western Europe (high) - decrease in tourism in the Baltic States coming in by road (low) - increased tourism in the Baltic States coming in by rail (high)

- increase in cargo shipment by rail (high) - decrease in cargo shipment by road (high) - decrease in cargo shipment by ship (low) - increase in road safety (low) G2 – Via Baltica Economic: - increase in GDP growth (low) - stabilization of Baltic economy against European economy (low) - increase in goods exported (low) - increase in goods imported (low) - new industry established in the Baltics (low) Geographic / Spatial: - disruption to natural environments (high) - increase in pollutants (high) - increase of land use for living and transport (mid) Transport: - decrease in the use of public transport (low) - increased use of cars (mid) - improved accessibility of the Baltics to Western Europe (mid) - increased tourism in the Baltic States coming in by road (low) - tourism will halt in the Baltics (low) - increase in cargo shipment by road (mid) - increase in road safety (low) G 7 – Development of Electronic Queue Management System Economic: - increased income from tourism (low) Geographic / Spatial:

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- n/a Demographic: - n/a Transport: - improved accessibility of the Baltics to Western Europe (low) - improved accessibility of the Baltics to Russia (low) - increased tourism (low) G8 – Build new storage facilities in Tallinn Economic: - increase in GDP growth (mid) - increase in goods imported from the East (mid) - increase in goods exported to the East (mid) - increase in goods imported from the West (mid) - increase in goods exported to the West (mid) - increase in transit goods (high) Geographic / Spatial: - high density urbanization (high) - increase of in pollutants in urban area (mid) Demographic: - increase of Baltic population (mid) - increase amount of immigration (mid) - decrease amount of emigration (mid) - increase in skilled and labour workers (high) Transport: - improved accessibility of the Baltics and the West to the East - increase in cargo shipment by rail (mid) - increase in cargo shipment by air (mid)

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- increase in cargo shipment by road (low) - increase in cargo shipment by ship (mid) G9 – Expansion of the Tallinn airport Economic: - increase in GDP growth (mid) - increase in goods imported from the East (mid) - increase in goods exported to the East (mid) - increase in goods imported from the West (mid) - increase in goods exported to the West (mid) - increase in transit goods (high) Geographic / Spatial: - disruption of the natural environment (mid) - increase in pollutants (mid) - high density urbanization (high) - increase in pollutants in urban area (mid) Demographic: - increase of Baltic population (mid) - increase amount of immigration (mid) - decrease amount of emigration (low) - increase in skilled and labour workers (high) - increase in scholars (mid) Transport: - increase in cargo shipment through the Baltics - increase tourism in the Baltic States coming in by air (mid) - increase tourism in the Baltic States coming in by ferry (low) - decrease tourism in the Baltic States coming in by road (mid) - increase tourism in the Baltic States coming in by rail (low)

- increase in cargo shipment by rail (mid) - increase in cargo shipment by ship (mid) - increase in cargo shipment by air (mid) - decrease in cargo shipment by road (low) G10 – New infrastructure in airport of Riga Economic: - increase in GDP growth (mid) - stabilization of Baltic economy against European economy (mid) - new industry established in the Baltics (low) Geographic / Spatial: - disruption to natural environments (high) - increase in pollutants (mid) - increase in pollutants in urban area (high) - increase of land use for living and transport (mid) Demographic: - increase of Baltic population (low) - increase in skilled and labour workers (mid - increase in scholars (low) Transport: - improved accessibility of the Baltics to Western Europe (mid) - increased tourism in the Baltic States coming in by air (high) G11 – New infrastructure in harbor Tallinn Economic: - increase in GDP growth (mid) - stabilization of Baltic economy against European economy (low) - increase in goods exported (high) - increase in goods imported (low)

- new industry established in the Baltics (mid) Geographic / Spatial: - disruption to natural environments (mid) - increase in pollutants (high) - increase of land use for living and transport (high) Demographic: - increase in skilled and labour workers (mid) Transport: - increase in cargo shipment by ship (high) G12– New infrastructure in harbour Riga Economic: - increase in GDP growth (mid) - increase in goods exported (mid) - increase in goods imported (low) - new industry established in the Baltics (mid) Geographic / Spatial: - disruption to natural environments (mid) - increase in pollutants (high) - increase of land use for living and transport (high) Demographic: - increase in skilled and labour workers (mid) Transport: - increase in cargo shipment by ship (high) G13– New infrastructure in harbour Klaipeda Economic: - increase in GDP growth (low) - increase in goods exported (mid) - increase in goods imported (low) - new industry established in the Baltics (mid)

Geographic / Spatial: - disruption to natural environments (mid) - increase in pollutants (mid) - increase of land use for living and transport (mid) Demographic: - increase in skilled and labour workers (low) Transport: - increase in cargo shipment by ship (mid) G15- Build consolidation centres at the harbour Klaipeda and Ventpils Economic: - increase in GDP growth (low) - increase in goods imported (mid) - increase in transit goods (high) Geographic / Spatial: - increase of land use for living and transport (mid) Demographic: - increase in skilled and labour workers (mid) Transport: - increase in cargo shipment by ship (high)

Effects of new and expansion projects in Scenario Depression H1 – Rail Baltica Economic: - increase in GDP growth (low) - increase in goods exported (low) - increase in goods imported (low) - decrease in transit goods Geographic / Spatial: - depletion of the natural resources (mid) - disruption of the natural environments (mid) - decrease in pollutants (mid) - increase of land use for living and transport (mid) Demographic: - increase of Baltic population (low) - amount of immigration (high) - decrease amount of emigration (high) - decrease in skilled and labour workers (low) - decrease in scholars (mid) Transport: - increase in the use of public transport (high) - decreased use of cars (high) - improved accessibility of the Baltics to Western Europe (high) - improved accessibility of the Baltics to Russia (mid) - increased tourism in the Baltic States coming in by rail (low) - increase in cargo shipment by rail (high) - decrease in cargo shipment by road (high) - increase in road safety (mid)

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Appendix G - Scenario Sensitivity Analysis

Table A.4 Sensitivity Analysis for Scenario: EU-Topia

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Table A.5 Sensitivity Analysis for Scenario: Re-industrialization

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Table A.6 Sensitivity Analysis for Scenario: Rise of the East

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Table A.7 Sensitivity Analysis for Scenario: Collapse of the East

Table A.8 Sensitivity Analysis for Scenario: Depression

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