Botniabanan – a Swedish pioneer project

The goal of the Bothnia line in northern Sweden is to create a railway of national importance and which will be an integrated part of the European railway network. After seven years of construction, the project has reached the halfway point and could one day form the first phase of a new line all the way to Finland.

The existing trunk line section in the region is more than 100 years old and was, for defense reasons (i.e. the Russian bear threat), located approximately 40km off the coast. The old line has become unattractive for passenger traffic and is today used as a heavy load freight line. It has now reached it’s capacity limit, and as such become gradually less competitive. The curves and slopes of the old line prevent access of fast heavy freight trains.

The Bothnia line will enhance the efficiency of the whole transportation system to and from the northern half of Sweden for freight traffic, contribute to regional cooperation and balance through the introduction of passenger traffic in the densely populated coastal areas and bring environmental benefits by transferring transport work from road traffic. In the future, the project also opens up possibilities for transport exchange with western Russia.

The project is governed by a General Agreement signed in 1997 by the Swedish state, the four municipalities concerned and two county councils with traffic responsibility in the region. The Swedish state owns 91% of the company Botniabanan AB. The remaining 9% is equally owned by the municipalities Kramfors, Örnsköldsvik, Nordmaling and Umeå.

The project includes the construction of 190km single track railway between the large rivers of Ångermanälven in the south and Umeälven in the north. The new railway is built in the hilly terrain of the High Coast area which is a world heritage area due to the ascending ground after the last ice age. The ground rises one metre per 100 years in this area.

It is a fairly large project, in terms of logistics and mass movement. Approximately 16 million m3 of rock and soil is moved to construct a railway with maximum 10 permille slopes and curve radius of 3,200 metres. Planning comes from The Swedish National Rail Administration while Botniabanan AB finances and constructs the railway. The four municipalities concerned finally plan, finance and construct seven new travel centres.

The Bothnia line will cost 13 billion SEK (€1.4 billion) and commercial traffic is estimated to start in 2011, at the earliest. The railway part of the project is financed through loans from The Swedish National Debt Office. The project will generate more than 7,000 man years directly with a peak during the years of 2004-2005 and require resources from all over northern Europe.

Pioneering project

As a railway project, it claims to be in the front line in Scandinavia in three respects.

Firstly, new environmental legislation was introduced in Sweden in 1999, just when the planning and construction work started. The project concerns work in and across:

• City areas of Umeå and Örnsköldsvik
• Widespread forest areas
• Crossing of many rivers, creeks and lakes
• Comprehensive tunnelling works

Initially, the project experienced difficulties to find the right interpretation and practise, both among authorities and the project team, to balance environmental ambitions, performance requirements, time plans and costs. Extra costs of roughly 10% of the project cost are expected due to the ambitions to create environmentally friendly solutions and the unclear and uneven application of the law causing delays. These difficulties have now been overcome and both sides know their roles, what to expect and cooperation is good.

Secondly, technical performance requirements are so far unique in Sweden and not common in Europe. For passenger traffic, the trains will run at a maximum speed of 250km/h, which results in a rather inflexible planning of route and alignment. For freight traffic, the line is constructed to carry train weights of 1,600 tons with axle loads of 25 tons at a maximum speed of 120km/h. The line, its structure and equipment must therefore withstand large dynamical forces.

Thirdly, we plan to install the European radio based traffic management system, ERTMS, without optical signalling. The basic idea is to increase efficiency in the long-term by allowing trains to pass borders without change of pilots and locomotives. Equipment-wise, this requires less installations, gives higher capacity and less operational and maintenance costs. In other terms, the Bothnia Line project requires development work and careful validation of it’s solutions.

Present status of planning and construction

Planning started in 1998 and explored more than 30 different corridors. Based on seven railway investigations with environmental assessment analyses, a proposed corridor for each was evaluated by the Ministry of Environment for permissibility. When permitted, 16 railway plans of approximately 10-15km each were produced, showing a more exact location of the line and it’s impact. The construction started in 1999 on a 20km long section north of Örnsköldsvik. In total, some 1,100 people are fully engaged in the project and so far, the procured contract value and incurred management and planning costs are more than 9.5 billion SEK.

In total, construction work i.e. civil work is ongoing on 90% of the total distance starting from the south. The remaining 15km section nearby and in the town of Umeå has been delayed by more than five years due to discussions about environmental impact of the proposed alignment on bird life in the Umeå river delta area. The line will pass through a large nature-reserve. Small interest groups have objected to the line at every stage and they have also appealed to the Upper court and the case will, after their decision, be brought up once again by the Environmental court and new appeals are expected. Therefore, the exact time schedule for when train traffic will start and final costs can not be given. The issue has progressed up to European Commission level and the opinion of the government, all government authorities and EU is positive provided some compensation work is done to secure feeding and resting of the migrating birds.

Financing of the Bothnia Line railway

To understand the basis of the General Agreement of 1997, we must sum up the general currents that were prevailing in the middle of the 90s after the severe recession in the northern countries in the early 90s.

Why did the government decide to establish a special project management company to run the construction of the line and why was it not financed via the annual state budget as normally is the case?

Here are some of the reasons that have been mentioned:

• The strained budget frames made politicians in Sweden, like in many other countries, contemplate over alternative solutions of construction, owning and financing of infrastructure. Focus was on PPP-projects where private construction management operation and financing was to be involved in partnership with public authorities.
• To create clarity in the project e.g. roles and responsibilities, decision making and reporting by establishing a separate project management company.
• For the state to commit the regional and municipal partners and make them responsible for both the demands on the project and it’s financing.
• By financing the project outside the state budget and thereby not straining the state budget, the project could be brought forward. At that time the budget balance was not affected nor was the surplus demand from the EU. Today projects of the Bothnia Line type have to be included in such calculations.
• A more efficient long term planning in the project is created by making the financing multi-annual. Internally it makes planning more ‘sharp edged’ and externally it gives more confidence in the dialogue with the construction industry.
• There were examples of less successful state run infrastructure project at the time and where cost overruns were very substantial.

This sums up some of the most important thoughts that influenced the design of the General Agreement of the Bothnia Line.

Financing model

From 2002, the borrowing was to be exclusively with The Swedish National Debt Office, which in its turn, borrow the necessary means as part of its total borrowing for the Swedish state. When the line is taken into operation, investments and accumulated interest will be capitalised.

During a period of 40 years, the Swedish National Rail Administration will pay an annual lease, unload the debts of Botniabanan AB and then buy the company assets for the share capital value of 1 MSEK. During those 40 years, the line is legally in the ownership of Botniabanan AB, while the track possession and management is with the Swedish National Rail Administration.

Today it is unclear whether the design of our General Agreement will form a model for future Swedish infrastructure projects. In the approved investment plans of the Swedish National Rail Administration, for the years 2004-2015 there are no indications, discussions or examples of similar solutions like the Bothnia Line project.

In the public debate in Sweden, the pressure is hard in public funds and the PPP-concept is alive and discussed regarding such independent infrastructure projects that are not integral parts of larger systems.