The shareholders of West Railway Ltd reach a preliminary understanding on the terms and conditions of the pre-agreement on the construction phase

Ministry of Transport and Communications
Publication date 13.6.2024 12.05 | Published in English on 13.6.2024 at 15.25
Press release
The train arriving at the station (Photo: Kavavanov Lev/Shutterstock)

The State and the shareholder municipalities of West Railway Ltd – Turku, Espoo, Salo, Lohja, Vihti and Kirkkonummi – have been negotiating on the terms and conditions of the pre-agreement which will enable the transition to the construction phase of the West Railway. Helsinki, which was involved in the planning phase of the project, will not take part in funding the construction phase.

The pre-agreement concerning the framework conditions for the transition to the construction phase still requires the approval of the competent decision-making organs of all the parties involved. The parties also need to approve the final shareholder agreement to be drafted. With regard to the State, decisions by the Parliament on the State’s budget are needed.

At this point, the transition to the construction phase concerns the following sub-projects: Espoo–Kirkkonummi, Vihti–Lohja, Salo–Hajala and Nunna–Kupittaa.

During the current Government term, the aim is to draft the construction plan for the entire route and start up the construction of the routes Espoo–Kirkkonummi and Salo–Hajala. The cost estimate for the sub-projects to be started up during this Government term totals approximately EUR 600 million.

Particular attention will be paid to the management of the company’s financial risks. Prior to the start-up of each sub-project, the company must provide an estimate of the costs of the project. A sub-project may commence only after the shareholders of the company have found that the project does not involve an exceptional increase in costs.

The development of costs will be carefully monitored. If the costs of the projects exceed the estimated costs sufficiently, separate decisions will be required on continuation, and in this case, the allocation of costs between the State and municipalities will be agreed upon.

Both the State and the municipalities undertake to fund the construction phase of the project with EUR 400 million, or a total of EUR 800 million. The share of municipalities will be divided between them as separately agreed upon. 

In addition to this, the company is authorised to raise a maximum of EUR 500 million of external capital. The right to this only emerges after the funding from the State and municipalities and CEF funding has been used. EU CEF funding has already been granted to the project, and any CEF funding obtained from the pending application will reduce the company’s need for raising external capital.

Only part of the State and municipality funding will be used during this Government term. External capital will not be used.

The State will be liable for the management and maintenance costs of the built assets after the construction phase. The assets built by the company will be transferred to the State at the end of the construction phase at the latest, or the company will become 100% State-owned. 

The shareholders will continue the negotiations on the actual shareholder agreement.


Tuomas Sorsa, Special Adviser to the Minister, tel. +358 (0)295 342 012, [email protected]
Miikka Rainiala, Director of Unit, tel. +358 (0)295 342 051, [email protected]


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