FINANCING MODEL OPPORTUNITIES FOR THE NEW LOGISTICS IN FINLAND

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January 2015

FINAL REPORT

FINANCING MODEL OPPORTUNITIES FOR THE

NEW LOGISTICS IN FINLAND

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ACKNOWLEDGEMENTS

This work was financed by the Shipowner’s foundation and FIMECC REBUS program. The project team members would like to express their gratitude to all companies, organizations and people who have contributed to this report with their knowledge and opinions. The following persons have contributed to this report: Professor, Kim Wikström, Åbo Akademi University, Professor, Kent Eriksson, Stanford University, M.Sc. Annemari Andrésen, PBI Research Institute, M.Sc. Tomas Arhippainen, PBI Research Institute, M. Sc. Johan Ingberg, PBI Research Institute, M.Sc. Anu Keltaniemi, Åbo Akademi University.

EXECUTIVE SUMMARY

There is a clear need to renew the logistical chains in Finland in the coming years. This includes improving the competitiveness of both the importing and exporting industry, which uses the logistical services, the highways, ports and related activities and especially shipping, which is subject to significant changes in the environmental regulations. It is deemed as highly important that organizations who are active in Finland and have Finnish ownership take on a central role in this development.

It is more a rule than an exception that infrastructure projects exceed initial planned time and cost, and that the outcome does not reach promised benefits for the project stakeholders nor the society. Thus there is a clear need to find alternatives for governing and funding future infrastructure investments.

Traditionally, infrastructure projects have either been funded by the public sector or by the private sector and in this report we discuss alternative models, where public and private sectors are more integrated through alliances or other life-cycle models.

There is much evidence that life-cycle models, when applied correctly, are superior in time and cost in comparison to traditional public-driven projects. From a Finnish perspective, it seems that the perspective of building life-cycle models points at the main benefit coming from the possibility to transfer capital costs to service fees and thereby lower the barrier for starting the infrastructure project. However, this view is too narrow. Evidence from successful life-cycle model projects shows that the real benefits come from private sector due diligence and stakeholders with the right competence, as well as incentives that lead to innovation and a governance model that pushes for not just reaching the promised benefits, but for delivering more than initially planned.

This report recommends replacing traditional financial investors with institutional investors that have a more long-term perspective on investments. The challenges with institutional investors are the ability to handle high risks in environmental and social aspects, but they can handle market risk.

In this report we want to highlight the need for looking at infrastructure projects from an overall system point of view, where understanding of the ecosystem and the overall governance model is important. To give concrete examples of the main arguments, we have analyzed 3 different logistical systems and present alternative models for financing and governing these projects in the report.

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INTRODUCTION

BACKGROUND

Infrastructural investments in society are increasingly executed through models engaging several parties. Financing schemes representing the public and the private sectors, various alliances and involvement of various types of technology funds are increasingly being applied. So called PPP- lifecycle models (Public-Private-Partnership) have been applied already for a long time in the transport-, energy- and construction segments, where the customer is a public actor who places the order with a private, often purpose-made company. As an example of such investments in Finland, road construction projects can be mentioned (for example the Koskenkylä–Kotka highway, opened 1.9.2014).

The reason for the change is the need for new implementation and thereby financing models. The implementation models should be more efficient cost- and revenue- wise than public sector projects. So called institutional financers are seen as important future funding sources. On a global level, in many countries institutional financers such as pension insurance companies and state investment companies are already involved in important investments for society.

Previous research projects (“Fairway to the future 1 & 2”1_{) have outlined the future logistics} environment in Finland, where one important factor is the change in the environmental regulations taking effect in 2015. The needed investments in the logistics in order to renew fairways and short sea transportation require a redefinition of financing models. The results

from ”Fairway to the future” have been presented at a financing seminar and also at an investor forum at Stanford University and based on the feedback, preliminary alternatives and principles for financing models for the logistical chain have been outlined. The results have also been presented and discussed in a financing seminar arranged by the Ministry of Transport and Communications 9.6.2014, with the conclusion that there is a need for further research regarding alternative financing models for shipping and renewal of the complete logistical chain.

PROBLEM FORMULATION

There is a clear need to renew the logistical chains in Finland in the coming years. This includes both the importing and exporting industry, which uses the logistical services, the highways, ports and related activities and especially shipping, which is subject to significant changes in the environmental regulations. It is deemed as highly important that organizations who are active in Finland and have Finnish ownership take on a central role in this development.

Along with the changing environment and the needed investments to meet the changes, new models are needed for collaboration in and financing of these projects. The traditional ways of funding through bank loans and project management based on customer-main

1_{Fairway to the future. The future of Shipping in Finland 2015 and beyond. PBI Research Institute & The shipowners’}

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contractor relationships with strict liabilities need renewal. Risks and rewards need to be shared differently and mutual goals defined. This report deals with these issues.

AIM

The aim of this work is to create proposals for different business models, including the financing models, for construction and renewal of three logistical lanes from factory to end customer. The research is conducted based on previous work2_{, the knowledge published by} Åbo Akademi as part of the FIMECC REBUS project3_{, as well as interviews with actors} representing the chosen logistical lanes.

The chosen lanes are:

1. Sokli mine route to market

2. Ro-Ro container shuttle, Helsinki - Tallinna 3. Short Sea coaster system

The business models presented in this report include the following elements:

System level presentation of the logistical lane (road, rail, port, shipping etc.) Material flows

Involved parties and stakeholders (including alternatives) Market needs and competitive situation

Drivers and Barriers

Preliminary investment costs

Alternative financing models; innovation, incentives and financers Preliminary NPV-calculation

SCOPE OF WORK

The scope of work is presented below and was conducted through information gathering in the form of interviews, meetings and desk studies.

1. Outlining different investment models and their implementation 2. Interviews and meetings with stakeholders

3. Analysis and final report including business models for the selected logistical routes and their financing alternatives

2_{Fairway to the future. The future of Shipping in Finland 2015 and beyond. PBI Research Institute & the S}_hipowners’

foundation in Finland. 2013.

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FINANCING ALTERNATIVES

Financing has in recent years become a major obstacle for investments. The banks have sharpened their loan criteria and raised the margins and some banks have for example withdrawn from ship financing altogether. Shipping investments are long-term and the risks are higher than for example with real estate. For example, the slump that was witnessed in the freight rates due to the overcapacity of vessels after 2008 caused the value of the vessels to sink significantly. Another problem for obtaining ship financing is that the shipping customers are reluctant to commit to long-term charter agreements, which the banks would need as guarantee. Different alternatives for shipping financing and models created in other countries were presented in the Fairway to the future report4_.

However, as these means do not fully meet today’s financing needs, new financing methods

are sought. Some models, both traditional and alternative ones, are presented below. TRADITIONAL MODELS FOR SHIP FINANCING

The traditional models, and their importance, are often divided into pre-finance crisis and post-financial crisis. The reason for this is that the complete picture changed dramatically in such a short time. Between 2003 and 2008, new ships worth USD 800 billion were ordered, with half of the orders being placed during 2007–20085_.

The peak in shipping and offshore loans came in 2007 and reached a volume of up to USD 115 billion p.a., with the highest peak in Q3 2007 with over USD 40 billion. During the worst period of the financial crisis 2008–2010, the annual outgoing volume dropped to around USD 35 billion p.a.6

Although a recovery has been witnesses since, the traditional financing models still cannot meet the order book of new building. The development is portrayed in the picture below.

4_{Fairway to the}_{future. The future of Shipping in Finland 2015 and beyond. PBI Research Institute & The shipowners’}

foundation in Finland. 2013.

5_Stopford_{M (2010). “A Year of Decisions for Shipping: How Will the Markets Develop?” Presentation made at the Financial}

Times Deutschland Ship Finance Conference.

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Picture 1:Lending to shipping firms7

Traditional Bank Finance (70% of funding for shipping industry)

When talking about “traditional bank loans”, one is often referring to syndicated loans. Syndicated loans are loans that are offered by a group of lenders (called a syndicate) to a single borrower. This is done to spread the risk over several lenders. The lenders can be other banks but also institutional investors like pension funds and hedge funds.

Usually there is one lead bank that may take on a proportionally larger share of the loan, and perform administrative duties like dispersing cash flows amongst the other syndicate member. The largest banks arranging syndicated loans in shipping are Nordea Bank, DnB NOR Bank ASA, ING and Citi.

In 2011 DnB NOR and Nordea, together, were bookrunners in 28.5% of the transactions and MLAs (Mandated Lead Arranger) in 21.1%. In 1Q 2013 those figures had risen to 33.9% as bookrunners and MLAs in 23.0%. French and German banks used to be important in ship finance, as well as UK banks like Lloyds and Royal Bank of Scotland, but with them pulling back, the vacuum is being filled by bonds and export credit agencies8_.

7_{The Economist, We try harder}

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Picture 2:Top ship financing banks9

German banks, HSH Nordbank, Commerzbank and KfW still have the biggest portfolios when it comes to shipping loans but they have announced that they are increasingly seeking innovative ways to reduce their shipping portfolios.10_{Bank lending is still available but banks} are more critical and careful, and going for “good projects”. Before the finance crisis, banks

were ready to lend up to 80% of the cost of the ship. By 2012 that figure had dropped to around 50%. It is still open how the coming changes in the shipping regulation regarding emissions will affect the allocation between different financing sources.

Pension funds and bonds

Pension funds have not traditionally been heavily involved in direct shipping financing. Most financing has been through syndicated loans, arranged by different banks. This way both the risk and capital used have been minimized. Another channel has been through specialized funds, led by asset managers that invest in shipping. In Denmark, Danica Pension, a Pension Fund owned by Danske Bank, have specialized in investing in shipping. Danica Pension states that the total investment sum for all business sectors involves more than a billion USD in the years to come, of which the Danish maritime companies constitute an important part.11

However, pension funds have been attracted to infrastructure investments as they expect them to produce predictable and stable cash flows over the long term. Infrastructure assets

9_{Lloyd’s list, Focus on Finance}

10_{Financial Times, European banks face tough 2014 as ECB focuses on shipping.} 11_{Shippingwatch,}_{Danish pension fund to invest heavily in shipping}

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can operate in an environment of limited competition as a result of natural monopolies, government regulation or concessions. Investments can be capital intensive and include a tangible asset that must be operated and maintained over the long term. This includes port and other assets in the transportation sector.12

Bond Market (15% of funding for shipping)

Bond issuance is another financing option for shipping companies. In most instances, smaller shipping companies target the high-yield bond space, paying a relatively higher price to secure bond financing compared to larger entities that will pay less. Capital markets, whether debt or equity, are driven predominantly by sentiment and availability is not a given quantity. Shipping companies that want to access these markets will need time to correctly prepare well in advance so as to be able to move fast when an opportunity arises13_.

Private equity and hedge funds

Over the past few years, private equity funds, new players to this industry, have been showing growing interest and gaining momentum in filling the gap of traditional bank finance. Between 2011 and 2012, private equity funds financed no less than 22 shipping transactions with an aggregate magnitude of more than $6.4 billion.14

A way to access the shipping finance market has also been by buying old shipping loans that banks are selling off. An estimated USD 5 billion in shipping loans have changed hands in the past few years. Examples of recent deals are Davidson Kempner Capital Management LLC, USD 500 million deal for part of Lloyds Banking Group Plc (LLOY)’s shipping portfolio,

Oaktree Capital Management made a 280 million euro deal buying 14 chemical tankers from Commerzbank AG (CBK) and HSH Nordbank AG, the largest shipping lender, is preparing to sell a portfolio of shipping loans after a previous package valued at about 300 million euros failed to attract investors.15

LIFECYCLE MODELS

Private – Public Partnership (PPP)

There are two main types of PPP, remunerated by tolls levied by the private partner or remunerated by availability payments from the government contracting agency. These entail rather different risks for the private parties and therefore tend to attract different types of investors. Transport projects also differ considerably in relation to risk, and demand risk in particular. Both types of PPP create liabilities for the taxpayer, which need to be contained by transparent public accounting rules and budget procedures that identify them as on - balance sheet commitments.16

12_{OECD,2011. Pension funds investment in infrastructure}_–_{a survey} 13_{The Asset. The changing face of shipping finance}

14_{Watson, Farley& Williams. Maritime Briefing, February 2013.}

15_{Bloomberg. Private-Equity Funds Bet $5 Billion on Shipping Rebound} 16_{OECD, 2013. Institutional investors and infrastructure financing, s.18.}

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Picture 3:Life-cycle model17

One regulating and enabling factor in designing the PPP model is the type of infrastructure investment. In investments with high national interest (rail, road, energy) and regarding national resources (forest, oil, mining) the government mostly takes a leading role in the PPP model, not necessary as a majority holder but as the initiator and by governing funds where other institutional investors can be invited to. A central enabler can be investments with a high potential for technology or business innovation, which again can be partly an incentive for the involved investors.

One main reason for the government to propose a PPP is the possibility to avoid large capital cost investments to initiate a new infrastructure project and rather pay a service fee over the life-cycle of the investment, which is portrayed in the pictures below.

Picture 4: Distribution of Capex and O&M costs in a traditional infrastructure investment project

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Picture 5: Distribution of Capex and O&M costs in a PPP infrastructure investment project

Value of a PPP model

Should the use of PPP to avoid large capital investments by the government in the beginning of the investment project be seen as the only benefit of the PPP model? The critics of the PPP model are of the opinion that the government should not need to invite investors with targets of good returns on own investment to participate in larger infrastructure projects. To see a PPP model only as a mechanism to transfer costs from capital investment to a service fee with higher costs over the life- cycle is in our opinion a too limited view.

In a report by Clayton Utz regarding the benefits of PPP models in Australia, it is highlighted that the transfer of risks to the private sector, the improved project scoping, the life-cycle cost savings by bundling maintenance services into the contract are indeed beneficial, but not unique for the PPP model. According to Clayton Utz, the real benefit of PPPs comes from the rigid due diligence and monitoring of the project, that has a positive effect on the cost and time performance. It is mentioned that PPPs often are superior in these areas in comparison to traditional government procurement. 18

In short, when evaluating the value of a PPP model, one needs to look into more than the financing and transfer of costs from capital investment to service fee and take into account the increased innovation, better control, as well as economies of scale when taking in a professional private contractor to lead the construction and maintenance. Also, the opportunity to involve the parties that benefit from the infrastructure project to take part in the financing should be seen a possibility to decrease the government share of the investment. Such parties can be private companies, who either will utilize the logistical system or who will profit from either the construction or the operation and maintenance of the system. For the beneficiaries of the logistical system to make an investment into the PPP, there should be built-in incentives for them to improve own profits by either decreasing the construction time or designing the system to be more efficient to operate and maintain.

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Picture 6: Building blocks for infrastructure investment governance and financing schemes

Regulated Asset Base (RAB) model

The Regulated Asset Base (RAB) -model was initially developed in England and Wales in order to finance waterworks and has later been used in Great Britain for investments in the electrical network, as well as railroads. The RAB-model differs from the PPP-model in that it requires an external party to oversee that the involved companies act in a sustainable way for the society.

RAB works best for natural monopolies with limited market risk and works particularly well where there are large investment requirements over time, as the model’s development demands a significant amount of planning and structuring from a regulatory perspective.19

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Picture 7: RAB Model20

PUBLIC FUNDING/SUBSIDIES

EU’s TEN-T

In the beginning of the 1990’s, the European Union decided to set up an infrastructure policy at Community level in order to support functioning of the internal market continuous and efficient networks in the fields of transport, energy and telecommunications. Trans-European transport networks, TEN-T, was at the beginning merely perceived as a funding instrument for major projects but it has now grown into a genuine policy. Nowadays two sets of funding instruments make financial support available to projects implementing the TEN-T at the EU: the Connecting Europe Facility and the Cohesion fund and the European Regional Development Fund. The instruments have a timespan of seven years, to coordinate with the spending program of the EU budget, from 2014 to 2020. The Connecting Europe Facility (CEF) co-funds TEN-T projects in the EU Member States. The Connecting Europe Facility regulation sets out the rules for awarding EU financial support, priority projects and the maximum limits of EU co-financing per type of project. The aim of TEN-T is to remove bottlenecks, upgrade infrastructure and streamline cross border transport operations for passengers and businesses throughout the EU.21_{The TEN-T program is} discussed further in connection with the second case in this report.

EU investment package

The EU commission recently announced a 300 billion investment package aimed at encouraging private investors to make infrastructure investments in Europe. The idea is to create a new fund, European Fund for Strategic Investments (EFSI), with €5 billion coming from the European Investment Bank and an €8 billion guarantee from existing EU funds

designed to secure a contribution of €16 billion in total from the institutions. The €8 billion

20_{Alternative ways of financing infrastructure investment: Potential for “Novel”}_{Financing Models, s. 32} 21_{Infrastructure - TEN-T - Connecting Europe}

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guarantee will come over a three-year period from the Connecting Europe Facility

(€3.3 billion);; Europe’s research program Horizon 2020 (€2.7 billion) and so-called “budget margin”, or unused funds, worth €2 billion. The resulting EFSI fund totaling €21 billion is expected to generate €240 billion for long-term investments and €75 billion for SMEs and

mid-cap firms over the period 2015–2017.

The EFSI funds will serve as credit protection for a range of new activities to be carried through by the European Investment Bank (EIB).These include long-term debt financing for higher-risk projects, subordinated loans and a variety of equity financing. These longer-term financing instruments will be targeted at a range of sectors including transport, energy and the digital economy. Meanwhile, EFSI funding will also go to the European Investment Fund (EIF), which in turn will provide credit protection for a range of new activities designed to benefit SMEs. These include new venture capital injections, loan guarantees, securitizations and seed financing designed to offer micro-loans to SMEs, to fund start-ups or offer mid-cap companies venture mid-capital. The €21 billion investment will generate a threefold increase

in the instruments available for the EIB and EIF to pass on as investments, and these loans

will in turn “allow other investors to join in and produce a further fivefold multiplying effect,”

according to explanatory documentation produced by the Commission, accounting for the total fifteen fold multiplier.22

The package is supposed to be launched in the summer of 2015 and has already been criticized for being too limited to have any real impact. 23

National level

The Finnish state can support infrastructure investments either directly through including them in its budget or through national support programs, in which a sum is allocated for different applicants to apply for. These programs are often designed to improve the competitiveness of actors who are facing problems for different reasons and are naturally subject to EU-approval.

As an example, the 60 M innovation support that was used by for example to part-finance ship orders can be mentioned (e.g. Viking Grace). Another example is the current support program for ship-owners aimed at meeting the stricter environmental requirements, though e.g. upgrading their vessels or constructing new ones, which meet the new requirements.

Outlining a model for designing purpose built governance and financing models

Project financing alternatives are dependent on the specific system infrastructure case and the selected governance structure. One of the barriers in building financing schemes is that the governance models and the financing are not integrated and innovated as an integrated model.

Below is a conceptual model for creating optimal governance and financing structures24_:

22_EurActiv._Juncker’s_{€315bn investment plan unveiled: fifteenfold leverage and solidarity for the south} 23_{The Economist (29th November 2014). Fiddling while Europe burns.}

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1. The challenge, opportunities and the contextual factors are analyzed and detected based on the specific case. Below is an example for a framework for detecting the optimal governance structure. The different categories in the figure (roles & responsibilities, contracts,…) are

detected by analysing the specific case contextual factors and using them as input for the choices of who will be responsible of what and which type of contracts are used.

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Picture 8: Framework for selecting the optimal governance structure25

2. Detailed plan of level of involvement of various actors during the life-cycle of the investment. Analysis of which actors should be involved and in what way during the various phases (planning, feasibility, execution and operation) of the investments life-cycle.

3. Based on initial governance structures and roles and responsibilities, alternative financing schemes are developed

4. Engaging the potential actors and refining the financing schemes

5. Proposing a final governance structure and integrated financing scheme

The five steps above are especially suited for larger system infrastructure investments with a high degree of uncertainty and when it is important to identify and involve the most relevant actors, who can contribute to the investment through their knowledge and experience. In that way the incentives and financing shares can be argued, as well as also the length of involvement of various actors during the life-cycle of the investment

25_{Designing effective governance structures for large projects. Large Project Governance research report 2013.}

Governance structure Contracts Collaboration Monitoring Level of detail Monitoring party Contract type Goal alignment Co-creation Culture Communication Target & method Span Standard Detailed Low incentives

Lump sum Cost plus Remeasurement

Contract partners High incentives Safeguards Main supplier Everything Results Processes Consultants Owner Customer Fractured Joint development Individual development Common Need-to-know based Open Project escalation Engineers solve Managers solve Lawyers solve Roles &

Responsibilities Coordinator Main supplier Owner Consultant Risk sharing Suppliers Owners Collective

Project type Turnkey Turnkey plus Subcontract Split package

Supply management Network depth Procurement approach Supplier

selection criteria Price

Long Medium Limited

Supplier & product attributes Framework agreement Competitive

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BENCHMARK

E18 Koskenkylä-Kotka

Background

Developing of E18 expressway was started in the 1990’s. As a member state of the EU, Finland has committed to develop the E18 expressway as far as to the Russian border by 2020. Yearly investment demand was so high that there were no possibilities to use budget funding to build the road, why PPP funding was seen as a solution by the state. At the

tendering phase, tender consortium invited current liabilities’ domestic and foreign financiers

to tender. Financiers of the project were selected at the end of the tendering phase.

Project scope

The E18 Koskenkylä–Kotka project scope was turning an expressway into a highway from Koskenkylä to Loviisa (17 km) and constructing a highway from Loviisa to Kotka (36 km). Six new interchanges were built for the highway: Loviisa east, Ruotsinpyhtää, Ahvenkoski, Pyhtää, Siltakylä and Heinlahti. In addition, the interchanges of Loviisa west and Sutela were improved.

Construction started in March 2011. The highway opened for traffic partly already during 2013 and fully in September 2014, slightly ahead of schedule. The road arrangements will be fully completed by the end of 2015. The contract for maintenance and financing of the highway extends until 2026.

E18 Koskenkylä–Kotka-highway project is carried out as a life-cycle model, in which the Finnish Transport Agency is the client and Tieyhtiö Valtatie 7 Oy is the service provider. In the model the service provider is responsible for the planning, construction, financing as well as maintenance of the highway until 2026, after which the highway is transferred under the control of the Finnish Transport Agency. The cost estimate for the project is approximately 340 million euros. The service contract value is approximately 623 million euros.

Tieyhtiö Valtatie 7 Oy is owned by Meridiam Infrastructure (60%), pension insurance company Ilmarinen (19.9%), Destia Oy (10.05%) and YIT Rakennus Oy (10.05%).

Project funding

Funding of the project consists of two main components: lending and investments of the road company owners. Lenders EIB and NIB have already previously participated in life-cycle projects in Finland and road projects are part of their typical funding projects. The third lender, Pohjola Bank, joined in the project through Tieyhtiö VT7. Consortiums that left a tender during tendering phase had different commercial banks as financier and Pohjola Bank was a funder in the winning tender.

Finnish Transport Agency has been marketing the project in Finland and in Brussels. One important component of the project has been that the project has had enough material in English. At the beginning of the tendering phase, YIT and Destia were initiative. Meridiam Infrastructure Projects S.à.r.l and pension insurance company Ilmarinen are risk funders and owners of the Tieyhtiö Valtatie 7. The original tender consortium looked for systematic

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partners for financing the own capital of the road company. The consortium found Meridiam and Ilmarinen during the tendering phase. Meridiam has several similar project all over the world and thus it is a well know actor.

Drivers and barriers

According to the project manager, the drivers of the life-cycle model are: - Implementation of the project is fast and efficient

- Yearly costs of the project are small in relation to the size of the project

- Total optimization in building and maintenance because contract period is long and there

are significant sanctions in case of quality deviations

- Administration of the project has been outsourced for a long period

- PPP model makes possible projects which are not possible to implement with budget

funding.

Barriers of life-cycle model are:

- It is possible that funding and administration of the project is expensive - Complex agreement model

- At the tendering phase of the project, PPP model ties resources of actors

According to the project manager it would be good to know if it was possible to exploit the state’s opportunities to get less expensive loans in order to finance PPP-projects.

Rantatie Alliance project (Tampere)

Background

The alliance model is widely used in infrastructure projects in Australia. The main benefit of the alliance model is that all involved parties participate in making the budget, schedules and plans, and thereby submit their ideas as well as commit to mutual targets, sharing risks and gains. Instead of working in silos and typically, fighting about who is to blame for cost-

or schedule overruns, all parties work towards a common goal. The philosophy is “We all win or we all lose” and everything is done based on open-book principle. The model enables deeper interaction, cooperation and creation of trust than traditional customer-supplier models. The downside is that it can be difficult to change the mindset and way of working and expectations do not always meet.

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Picture 9: Based on railway project implementation plan, cities of Tampere and Turku

Project scope

The Tampere Rantatie alliance project concerns improving Highway 12 between Santalahti and Naistenlahti; a stretch of 4.2 km. Highway 12 is moved to a new alignment and a tunnel with total length of approximately 2,300 m is constructed, which will be the longest tunnel in Finland. The work has begun and the project should be finished in Q4 2017. The aim with the investment is to make traffic more smooth, reduce environmental hazards and improve safety.26_{Tampere has overall made plans for large investments for a sum of 2.3 billion euros} during 2014–2019, based on the growth estimate of 115 000 new inhabitants by 2040.27 For realizing the Rantatie project, an alliance organization has been created between the following parties: Tampere city, Finnish Transport Agency, Lemminkäinen Infra Oy, Saanio & Riekkola Oy and A-Insinöörit Suunnittelu Oy. The highest decision maker of the Alliance is the Executive team consisting of 8 persons.28_{This project is the Finnish Transport}

Agency’s second alliance-model in Finland, as the model was piloted in the Lielahti-Kokemäki railway project with good results29_{. Several other alliance projects have been} started in Finland after this.30

Project funding and bonus system

Tampere city bears 67% of the costs of the investment and the state, i.e. The Finnish Transport Agency bears 33%. The city finances the investment partly by income from sales

26_{Tampereen uusi rantatunneli toteutetaan allianssimallilla. Liikenneviraston uutiskirje 3/2012.} 27_{Kauppalehti, 4.11.2014, page 11}

28_{Liikennevirasto, Allianssipäivä 30.11.2011}

29_{Syyskuun Huippuostaja: Liikenneviraston Mauri Mäkiaho. Tekes.}

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of land and other sources and partly though a loan. The service providers (A-Insinöörit Suunnittelu, Saanio & Riekkola and Lemminkäinen Infra) invoice the city on a monthly basis, separating costs and possible bonus payments. The gain share/pain share consists of bonuses and sanctions relating to 1) the target outcome cost 2) key result areas and 3) major event modifiers. The target outcome cost is 180.299.106 Euros (0% VAT), including

6.5 M € development phase costs. It has been mutually agreed by all alliance parties and

includes the direct costs, risk reserves and fees by the service providers. The key result areas have been set by comparing the minimum required level with the general performance level of major infrastructure projects, where bonuses are paid for better and sanctions charger for lower than minimum level performance. The bonus pool is 2% of the target outcome cost, increasing with achieved lower target price. The maximum sanction is 5% of target outcome cost. Major event modifiers refers to major disturbances or accidents, which if they occur will cause 25% loss of pay and 100% loss of bonus. (Rantatunneli alliance project, project plan).

According to the project manager, the experience so far has been positive. The project is on schedule and budget and the team is collaborating closely on solving any issues and ensuring the best result. Over one year was spent on the development phase to ensure among other things that proper risk analysis was made and that the right team was formed for implementing the project. The main barrier is posed by complaints by the public regarding the massive work, as the inhabitants in the area are affected. 6

FINDINGS, DISCUSSION

1. SOKLI - ROUTE TO MARKET

General presentation of logistical lane

The goal of Yara’s Sokli mine project is to exploit the existing phosphorus deposit through constructing a mine and possibly a concentration plant at Sokli. The main products are phosphorus and iron ore. At a later stage it is possible to also extract other minerals, such as niobium. The estimated excavation amount is 4–10 million tons per year and there is enough phosphorus-rich ore for production over approximately a 20-year period. Exploitation of the less phosphorus-rich areas would prolong the utilization of the mine with decades. The plan is to produce 1.5-2 million tons of phosphorus concentrate and 0.3 million tons of iron ore concentrate a year.31

The picture below illustrates the planned main logistical lane for the transporting the material to the market.

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Picture 10: Logistical lane for Sokli

The location of Sokli presents a challenge and investments are needed in the infrastructure in order to transport the materials. The Sokli mine is located 12 km from the Russian border and approximately 90 kilometers from the closest urban area, Savukoski. The closest railway is at Kellonselkä Salla, which is approximately 110 kilometers away. The Sokli mine is located between the Urho Kekkonen national park and the Värriö natural park32_{and the} Natura areas of Yli-Nuortti, Ainijärvi and Törmäoja can be found can be found close-by to the mine. 33

There is a 90 km long road connection to Sokli from Savukoski (road 9671) but the connection between Martti–Sokli needs improvement due to the traffic caused by construction and opening of the mine. The amount of traffic will be approximately 110 trucks per day after opening of the mine. The railway is planned to be one-track, non-electrified, radio-controlled and with access control. 34

Four different alternatives have been investigated and are illustrated in the picture below:

VE 1 Kelloselkä – Sokli, 104 km

VE 2 Kemijärvi – Pelkosenniemi – Savukoski – Sokli, 166 km VE 3 Kelloselkä – Naruskajärvi – Sokli, 103 km

VE 4 Kelloselkä – Savukoski – Sokli, 135 km

32_{Soklin kaivoshankkeen vaihemaakuntakaava, s. 9} 33_{Soklin kaivoshankkeen vaihemaakuntakaava, s. 68} 34_www.sokli.fi

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Picture 11:Alternative routes for Sokli35

Alternatives 1, 3 and 4 demand an improvement of the existing railway between Kemijärvi and Kelloselkä, in terms of strengthening the railway structures and vertical alignment. At least two traffic places are planned for the railway: a loading place in Sokli and a meeting place for the trains in the new railway part. Service roads will be constructed, as well as interchanges for the roads with the most traffic.

The Ministry of the Environment accepted the regional stage plan for East Lapland, which supports alternative VE 1.36_{This alternative also}_{supports the implementation of the Barents’} international traffic corridor, presented for the Kemijärvi–Kelloselkä route in Lapland’s

regional plan.37

Material flows of the logistical lane

Construction of a railway to and from Sokli is favored by the large amount of concentrated products that need be transported from the mine. After the first year of mine operation, the transported amounts are estimated to 1.5–2 million tons per year, which means 2–4 train

35_{Soklin vaihtoehdot. 18.1.2014. Finnish Transport Agency} 36_www.sokli.fi

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pairs daily. 38_{It is not realistic to transport such an amount by road, as it would mean} approximately 110 trucks per day in both directions.

Involved parties and stakeholders in the logistical lane

Besides the company responsible for the mine, public railroad company and the Finnish Transport agency, there are several other stakeholders in the logistical lane. The products are planned to be shipped through either the port of Kemi, Oulu, Raahe or Kokkola. The needed port investments are unclear as the ports are reluctant to convey information as they see each other as competitors, but in the case of Kemi, they would need to build another quay at a cost of approximately 6 M euros. All ports would need to invest in silos, expected to cost 2–4 M euros and conveyors at around 1-2 M euros.

A ship-owner/ship-owners are needed to handle the shipments to Norway. Ships in the size of max. 15 000 tons are needed. At the other end, the ports of Porsgrunn (Grenland havn) and Glomfjord (Halsa havn) as well as port operators are involved. It is assumed that no investments are needed in these ports.

In addition to the parties with a direct connection with the logistical lane, there are a number of other stakeholders who are directly or indirectly influenced by the investment and who needed to be heard when the regional plan was made. To illustrate the complexity of such projects, they are listed below:

Land owners: The Forest and Park Service (Metsähallitus), private land owners, real estate units involved in land division proceedings, joint forests and other land owners for the regional stage plan- and bordering areas.

Those, whose living-, working- or other conditions are influenced by the logistic route: residents, tenants, companies and their employees, institutions and their users and employees, owners and users of water areas.

Authorities: Lapland’s union, Ministry of Employment and the Economy, Radiation and Nuclear Safety

Authority (STUK), the Finnish Transport Agency, The Geological Survey of Finland (GTK), Fingrid, Lapland county administrative board, Lapland’s forestry center, Lapland’s Boarder Guard, Lapland’s Provincial Museum, Lapland’s Rescue department, Lapland’s TE Office, Environment Center of

Lapland, The Forest and Park Service/natural heritage services, National Board of Antiquities, Tornio customs, Military Province of Northern Finland, as well as other authorities belonging to the regional- and central administration.

Communities influenced by the logistical route: Lapland’s’ Nature Conservation district, the Nature

Conservation association of Savukoski, the areas’ reindeer grazing association, labor unions, business associations, forestry associations, museums and local history societies, Savukoski regional office of Finnish Wildlife Agency, energy companies, waste management companies, fishing area of Ylikemi, Urho Kekkonen national park, Värriö research station, Lapland border guard district, the village association of Martti, Savukoski business federation, Salla communities, Birdlife regional office

and Lapland’s traditional building association. 39

Market needs and competitive situation

The world’s population is estimated to grow by 40% by 2050, totaling 9.2 billion persons.

The need for food will double by 2050 and food production is estimated to rise by 50% already by 2030. At the same time the land area per person for growing food will decrease. Making farming more efficient through using fertilizers is presented as a solution to the increasing need for food. The effect of fertilizers on improving the crops is based on 3 main

38_{Rataverkon tavaraliikenne-ennuste 2030, s.30} 39_{Soklin kaivoshankkeen vaihemaakuntakaava, s. 67}

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nutrients: nitrogen, phosphorus and potassium and using them in an optimized and balanced way. Yara is a leading producer of nitrogen fertilizers and has made a strategic decision to expand also into basic production of phosphorus and potassium. As stated before, the Sokli mine can in the initial phase produce 1.5 million tons of concentrate per year and is estimated to produce rich ore for 20 years and less phosphorous-rich ore for an even longer time period.

The main driver for the mine is presented in the previous chapter, i.e. the increasing need for fertilizers and the discovered resources at Sokli. Phosphor is necessary for all life and is one of the most important fertilizers. Its production is estimated to reach its peak by 2035 and the present mines are estimated to be emptied in 50–100 years40_{. Other drivers are the} effects on employment; according to calculations made by Ruralia-institute and published in 2010, the Sokli project will employ up to 7000 persons full-time equivalent by the end of the investment and approximately 700 till the end of 2020. The effects would be most visible in Lapland, and e.g. the tax income of Savukoski were by Ruralia-institute calculated to increase by 7 M euros during 2011–2020 due to the mining activities.41

Barriers to the mine development are formed by environmental-safety issues. The Ministry

of the Environment’s stress test shows that water management is the main development

area for the mines42_{. Also the long permit processes, planned taxes and the price} development of the raw materials need to be considered, as it is not lucrative to excavate mines with low-content material when prices are low. The potential mine tax has been discussed but a suitable model has not yet been found. It would bring a steady income to the state, but could jeopardize utilization of mines with low-content material.43

The bad-will caused by Talvivaara can also be considering a barrier, in terms of the natural disasters that have occurred and their impact on the public opinion. There were high hopes for the mine, but the expectations were not realized due to, among other things, a decrease in mineral prices and the gypsum pond leakage causing the company damages worth 23 million euros44_{, finally leading to filing for bankruptcy. For comparison purposes, it can be} mentioned that a 24 km track was constructed between Murtomäki and Talvivaara. Talvivaara paid the costs initially and the state paid it back after two years of the investment45_.

Preliminary investment costs

There are lengths of information on the investment needs for the route from Sokli to harbor, as this investment case has been active for years. The biggest investment need is the road / railroad transportation between mine and harbor, but also some investments in the harbor

40_{Cordell, D., Drangert, J-O., White, S. The story of phosphorus: Global food security and food for thought. Global}

Environmental Change 19 (2009) 292-305.

41_{Laasanen, J. Soklin kaivoksen vaikutukset Savukosken kuntaan. s. 9.}

42_{Ympäristöministeriö. Stressitesti löysi kehittämistä kaivosten vesien hallinnassa} _–_{viranomaisten tehostettava}

yhteistyötä.

43_{Taloussanomat: Kaivosverosta tilattiin selvitys}_–_{minne se katosi? 3.10.2013} 44_{Talvivaaran kaivosyhtiön toimintakertomus 31.12.2012 päättyneeltä tilikaudelta. s. 3.} 45_{YLE Uutiset: Talvivaaran rata siirtyi valtiolle. 2.9.2011.}

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are needed. The needed railroad investments are according to information by Ministry of Transportations and Communications (2014 cost level):

- Kemijärvi –Kelloselkä track improvements 120 M€ - Kelloselkä –Sokli track construction 260 M€

In order to enable the construction of the mine, the road 9671 from Martti to Sokli needs improvement. When the mine starts operation, the road will be used for transporting chemicals, fuels and other material needed at the mine. The cost estimate for this is 35 million Euros.46

No exact port investment information is available, but the proportion of the port investment is small in relation to the land transport infrastructure and it is assumed that it will not present a barrier, as long as the mine and land logistic part is proceeding. Who will fund the port investments is unclear, as it is decided very much case by case. Sometimes it is the port, sometimes the port operator and sometimes the client. At least construction of 20 000 ton storage facilities is needed.

For the sea transport, there is a need for two ships with maximum 15 000 ton capacity, which are available in the market and the assumption is that no new ship investments are needed.

Alternative financing models; innovation, incentives and financers

The currently discussed financing alternative is a more traditional model, where Yara and the Finnish state would share the investment costs for the land route, where the Finnish state would fund the improvements in the current railroad between Kemi and Kemijärvi and a 50/50 split of costs between the state and Yara for the new railroad would take place. The

challenge with this financing model is that the Finnish state need to invest close to 300M€

as capital cost to start the project.

Development of the Sokli mine can be done in many different ways. There may be different actors involved, and the following is an attempt to present a number of alternatives, some more realistic than others. The presentation can be seen as a way to put many different options on the table, so that decision-makers can start the discussion around these.

We would like to present an alternative financing model built on a PPP model, where both alternative investors, contractors, operators and some other benefiting parties of the logistical system are invited to participate in the project. Considering the phosphate mining and logistics system as a whole, means that the Sokli mine is not only the interest of the mine owners, Yara, and local and national Finnish government. It is also in the interest of the firms that will build the mining and logistics infrastructure, the firms that will operate it, and the firms that will provide financing for it. Naturally, Yara, the Finnish government, and citizens are the most important actors, but the actors involved in the whole system can contribute to facilitate its development in many ways. There are numerous ways in which creative thinking can be applied.

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Financing:

o Private-Public partnership under the leadership of Yara, the State, and investors. The composition of the partnership may differ over time, so that Yara and the state are more heavily involved in construction of the phosphate mining logistics infrastructure, after which operators and investors may take over. Alternatively the state initiates a fund inviting institutional investors to participate and thereby taking equity for a minority share.

o Funds are long term investors that can invest in operations with long term outlook. Examples are Finnish pension funds, international pension funds, and sovereign wealth funds.

o Bonds can be used for financing. The market for corporate bonds has increased very much, and can be a way to finance parts of the Phosphate mining logistics infrastructure.

Governance:

o Private-public partnerships provide an array of governance models that can be applied for consortia that build and operate. An essential part is the use of profit sharing between the actors involved, because it will prevent that one actor reaps excessive demands, and others incur losses.

o Consortia agreements, such as the practice of open book accounting can be applied.

Construction:

o Rail transport, for transporting phosphate could be done in innovative ways so that it simplifies loading at the mine, and offloading to ships. Cooperation between rail cargo makers, the mine, and shipbuilders can generate innovative solutions that benefit the ecosystem.

o Conveyor belts, can be used for part or the entire transportation of phosphates.

o Road trains, consisting of trucks that are close together, and managed automatically from the first driver. A truck maker, such as Scania have made such technology, and could apply it to the Sokli mining logistics system. The road trains will require innovation in road construction.

o Short-sea shipping is strong area in Finland, and the volume of phosphate shipping opens for innovations in short sea shipping.

The proposed alternative model is to invite the beneficiaries of the railroad investment to make equity investments into a PPP company, called e.g. Phosphate Logistics. In addition to Yara, also the forest companies can utilize the railroad and users. VR track could participate in building the railroad track, and VR Transpoint can be contracted for handling the rail transport service. In addition, also some of the East Lapland municipalities could participate to some extent in the PPP Company, as both the construction, operation and the whole Sokli mine project will provide new jobs and tax income to these municipalities. This idea is presented in the picture below.

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Picture 12:PPP model for Sokli case

Preliminary NPV - calculation, logistics system PPP

Revenues for the logistics system:

Yara will pay for the logistics service, both on land, in harbor and at sea. The land logistics are estimated to be over 30M€ for truck transportation and 15M€ for rail transportation on annual basis. The sea transport is estimated to be between 18M€ - 22M€, depending on the

volumes transported to Porsgrunn and Glomfjord, now using an estimate that 70% of the 1,5M ton phosphate is transported to Porsgrunn and 30% to Glomfjord.

The Finnish state has estimated to get return of own investment mainly through taxes. Two alternatives to the PPP Company are presented in the NPV calculation below, one alternative having the responsibility of the land logistics with an annual turnover of around

20M€ and one having responsibility of both land and sea logistics with a turnover of over

40M€. For the land logistics company we use as example an investment of 40M€ and for

the land and sea logistics alternative, we use an investment of 80M€, which will lower the

capital investment by the state and take in other financiers to participate in the capital investment.

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Picture 13: Net present value for alternative to have a PPP for the phosphate logistics

In both cases it is assumed that there will be a steady need for transporting phosphate over the planned 20 years and in both cases the NPV calculation shows a positive cash flow result after around 15 years into the project. This is a long term investment with a return rate between 6-8% that can be considered acceptable, taking into account that the risks for deteriorating revenues are small, when the logistical system is up and running.

2. Ro-Ro container shuttle, Helsinki – Tallinna

The European Commission actively promotes short sea shipping. Short sea shipping is highly efficient in terms of environmental performance and energy efficiency.47_{The white} paper on transport from the European commission emphasizes the role of shipping in cargo transportation and the need to shift larger volumes of cargo from land-based infrastructure to sea.48

Short sea shuttles require ports with functional inland connections, fixed schedules, and high reliability and departure frequency. For the shuttles, punctuality and frequency are essential factors, as shuttles allow a transfer of more time-sensitive cargo from land transport to sea. Short sea shuttles require also high enough cargo flows between ports.49 It has been predicted in different surveys that cargo traffic between Tallinn and Helsinki will further increase after the sulphur directive has entered into force in the beginning of 2015, as an alternative to the route through Sweden. The current passenger traffic is directed to the city centers, which is not optimal for cargo. Hence the assumption is that there will be a need for a daily shuttle service concentrating on cargo, directed to the ports outside the city center with good onwards connections.

47_{European Commission. Maritime: Short Sea Shipping.}

48_{European Commission. White paper: Roadmap to a Single European Transport Area}_–_{Towards a competitive and}

resource efficient transport system. COM(2011) 144 Final. 2011. s. 9.

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General presentation of logistical lane

On the Finnish side there are three possible ports for a Ro-Ro Container Shuttle: Hanko, Helsinki and HaminaKotka. In Estonia possible ports are Tallinn, and mainly the Paldiski and Muuga ports belonging to the Tallinn port. Based on their existing facilities, location and EU initiatives enabling support, the main alternatives are Vuosaari port in Helsinki and Muuga port in Tallinn. The financing scenario is built on the route from Vuosaari to Muuga. The connection between Helsinki and Tallinn is approximately 80 kilometers i.e. 44 nautical miles (nm). The Gulf of Finland is one of the heaviest operated sea areas in Europe. There are three sea routes to Helsinki: 11 meters draught to port of Länsi-Satama, 9.6 meters draught to port of Etelä-Satama and 11 meters draught to port of Vuosaari. The sea routes to Helsinki are long: they start from the open sea and run through the archipelago. For example the sea route to the port of Vuosaari is 17.2 nm long. The sea route to the port of Tallinn is short and deep (10.8 m).

The picture below illustrates the main actors of the logistical chain.

Picture 14:Ro-Ro-Container Shuttle logistical lane

TEN-T

Finland has two TEN-T Core Network Corridors crossing the country: North Sea – Baltic and Scandinavian – Mediterranean Corridors. Estonia has one: the North Sea – Baltic Corridor. The North Sea-Baltic Corridor stretches from the North Sea ports Antwerp, Rotterdam, Amsterdam, Bremen and Hamburg through Poland to the Belarus border and to the Baltic countries' ports Klaipeda, Ventspils, Riga and Tallinn, as well as to Helsinki. The key project is "Rail Baltic(a)", a railway between north-eastern Poland, Kaunas, Riga and Tallinn (described more in detail below). Sea traffic between Helsinki and Tallinn is part of TEN-T North Sea – Baltic Sea Corridor and thus it is possible to apply EU co-financing for developing functions of the corridor. TEN-T co-financing is granted for developing port interconnections, (further) development of multimodal platforms and their interconnections, icebreaking capacity and the Motorways of the Seas.50_{Core networks receive 85% of} distributed TEN-T financing.51

50_{European Commission. Infrastructure - TEN-T - Connecting Europe.}

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Twin port project

As part of the TEN-T program, the Port of Helsinki and the Port of Tallinn are developing port operations with primary emphasis on cargo traffic. The Twin-Port project focuses on the development and harmonization of operations at the West Harbour in Helsinki and the Old City Harbour in Tallinn. The idea is to increase capacity and develop the use of automation and new technology. The budget for the project for 2012–2015 is 42.7 M EUR for the Port of Helsinki, 13.1 M EUR for the Port of Tallinn and 0.5 M EUR for indirect costs. EU’s share

of this is 20% of the total costs. 52 Rail Baltica

In order to make the Ro-Ro-Container Shuttle from Southern Finland through the Baltic countries to Central Europe efficient, there is a need to have functional land connections in addition to efficient sea connection. European Union has planned a railway network, Rail Baltica, through Baltic countries to Warsaw in Poland with further connections to Germany (see map below).

Picture 15: Rail Baltica53

Constructing of the railway network is partly in implementation stage. In 2008 it was estimated that the total costs of Rail Baltica will be 3.2 billion Euros. Rail Baltica should be fully in use in 2020. By 2030, it will remove bottlenecks, upgrade infrastructure and streamline cross border transport operations for passengers and businesses throughout the EU. Its implementation will be pushed ahead by the setting up of 9 major transport corridors that will bring together Member States and stakeholders and will allow to concentrate tight resources and to achieve results.

Tunnel option

The idea of constructing a tunnel between Helsinki and Tallinn was presented already in the

1990’s, as an extension of the Rail Baltica. Several studies have been conducted on the

52_{Port of Helsinki’s development projects}

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subject and the matter has been fiercely debated. Two undersea railway tunnel alternatives have been presented, both of which links with the Muuga coastal railway on the Narva main road in Maardu, Estonia. On the Finnish side, two options have been presented: the Porkkala track and the Pasila track option. The lengths of the tunnel are 58 respectively 73 kilometers.54_{The investment is according to a feasibility study by Anttikoski in 2007} estimated to be between 2.3–2.7 billion euros.55

Material flows of the logistical lane

The amount of cargo which is transported between Finland and Estonia shows a significant increase (average 10% yearly), while the trade between the two countries is quite steady, showing that this route is increasingly used for Finnish foreign trade56_{. However, most of the} cargo transport is by trailers as they are a more cost-efficient option to containers. In general, industrial goods are transported from Finland and consumer goods to Finland. The import of building materials and food supplies to Finland shows an increase. There are also an increasing number of Finnish companies using Estonia for subcontracting and subassembly, which means that goods, e.g. metals and laundry, travel back and forth between the countries.57

In 2013, around 8300 containers, i.e. 14,500 TEUs were transported between Finland and Tallinn. Of these, approximately 3,700 containers (6,800 TEU’s) were carrying goods and

the rest were transported empty. The share of imports was approximately 5,000 containers, i.e. 8,300 TEUs. Most of the traffic was directed to Hanko (4,400 containers / 7,700 TEU) and Helsinki (2,400 containers / 4,600 TEU).58

Overall, the amount of container traffic from Finland in 2013 was 738,426 TEU and to Finland 733,676. Most of the container traffic is handled by HaminaKotka port today, i.e. 310,100 TEU exports and 310,981 TEU imports. The main receiving ports are Hamburg, Bremerhaven and Rotterdam (75%), whereas the main ports of dispatch are Hamburg, Gdynia and St. Petersburg (close to 60%).59

A prerequisite for the proposed shuttle is that parts of the present flows would move to the Helsinki-Tallinn route and be further transported by Rail Baltic to Eastern Europe and even Turkey. These would most probably come from the Northern part of Finland by rail, as it is unlikely that the container traffic from HaminaKotka would be transferred to this route. To or from the ports of Hanko, Kemi, Oulu, Pori, Raahe and Rauma total 8,800 containers are transported to or the direction suitable for this route.60_{Another development, which may} mean increasing material flows, is the containerization of bulk materials. Assuming that 20% of current bulk flows would be moved from bulk carriers to containers, it would mean approximately two million tons more to transport.61

54_{Ikävalko, Vähäaho, Suuroja: Soil and bedrock conditions to be expected in Tallinn-Helsinki tunnel construction. Paper}

presented at Strait Crossings, Bergen Norway, June 2013.

55_{http://baltirail.wordpress.com/kirjoituksia/anttikoski-usko/}

56_{Sundberg, Posti, Tapaninen: Cargo traffic on the Helsinki-Tallinn route. Publications from the Centre for Maritime}

Studies. University of Turku. A 56. 2011

57_{Tapaninen, Sundberg, Posti: Short Sea Shipping in the Gulf of Finland- case Helsinki-Tallinn. Short Sea Shipping 2012.} 58_{Statistics from Martina-database}

59_{Statistics from Martina-database} 60_{Statistics from Martina-database} 61_{Statistics from Martina-database (2013)}

FINANCING MODEL OPPORTUNITIES FOR THE NEW LOGISTICS IN FINLAND

January 2015

FINAL REPORT