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7 New Stations, 870 km: Europe's hidden rail scheme!
49 Plays3 months ago
This week, Jason and Carlos set their sights on the Rail Baltica scheme based in northern Europe, spanning the baltic states, Latvia, Estonia & Lithuania.
The two delve into the reasons driving this part of Europe's wider rail network upgrade, why schemes like this aren't so widely known about in the UK and Australia, and just how good value the project's price tag is.
Follow Carlos on Linkedin | Follow Jason on Linkedin | Check out Aphex
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Transcript
Introduction and Welcome Back
00:00:00
Speaker
just the transport side, ah they think is ah approximately 500 billion euros. um And they'll spend 500 billion. So it's about one if I was to measure it another way, that's the like approximate equivalent of one giant glass city in the desert. you will
00:00:26
Speaker
Welcome back to the offsite podcast and a huge welcome back to Jason, who's rejoined after a couple of episodes. How are you doing, mate? I'm well rested. I'm sleeping 12 hours a night. I'm feeling great. I haven't changed any naffy. No, it's it's a struggle. ah so that is the second is the second easy you know when people are like oh the second one is like 1.5 the effort is that true no you you want to get that beeper ready although it's fucking way harder so it's a solid double effort arguably a bit more no one plus one equals three for sure yeah
00:01:05
Speaker
ah shit Definitely. um But i'm I'm pumped for a podcast. I think we just get straight
Podcast Structure and Football Match Preview
00:01:13
Speaker
into it. you know Our normal structure of the podcast is we like introduce it, then we talk about the background of the topic, and then we dive straight into like a prediction about what's going to happen around the topic. So I think we go straight into it because we're going to talk about some football match that you've been banging on about. So you do you want to dive into the background and then predict who's going to win the match? I can't say anything because I will jinx it. But we can talk about that next week if ah things go to plan. You'll see me in an England top for sure. so So we're recording this ah before. ah but When is this? When is the match or game or sport event? and whatever they We won the semi-final last night and the finals this coming Sunday. So um yeah, squeaky bum time. OK. And then who versus?
00:02:07
Speaker
Uh, England, Spain and Spain definitely looked like the strongest team. So we need another small miracle. Okay. And then prediction. If we play like we did in the first half last night, we'll win. If we don't, if the game's only half a half of match long, then you you've yeah. Yeah. i you said But the the thing is with Spain, we're going to get too deep now, but Spain are really good in the first half and bad in the second. And if there's something England are good at, it's holding a 0-0 till the last minute. So if you can get through that phase, I think it's ours. that yeah When you say 0-0 till the last minute, will you say 0-0 till the last minute and then it falls over in the last minute or that you take it to the end? No, we're scoring at the last minute. It's really lucky and it's a terrible, terrible strategy, but yeah. ah Anyway,
00:02:54
Speaker
Right. Should we get into it? Yeah, yeah, yeah. I thought that was the topic. Yeah, let's do it. I did say to the guys we should do stadiums next week if we win and I can wear my England
Rail Baltica Project Overview
00:03:04
Speaker
top. But anyway, so today we are going to chat about a huge European infrastructure scheme, which you've probably never heard of, or at least it doesn't get enough coverage. So the Rail Baltica scheme, it's a greenfield rail transport infrastructure project. um And its aim is to integrate the Baltic states, so Estonia, Latvia and Lithuania. And it's not just integrating those three nations, but integrating it into the wider sort of European rail network. So that's part of a broader thing called the North Sea Baltic Corridor, which is connecting Helsinki to Antwerp. So it's kind of the section in the middle.
00:03:44
Speaker
This particular section, um so it's all a high-speed rail network, but it has some issues because it's basically a Russian gauge railway, so they can't use any of these existing lines because it's the wrong width. Technical rail people would might be interesting to know. It's something like 70. I thought you were get i thought you werere going to say that you were saying something technical and you said the wrong width. I'm like, no, I'm still with you there. Is it gauge? Is it wider or narrower? That's the big question. Yeah, slightly to ah the network is slightly too wide.
00:04:17
Speaker
Okay. um But the rail itself, it's 870 kilometers across the three um Baltic states, seven new major stations, and then a bunch of regional ones, designed for high speed rail, as I mentioned, 249 kilometers an hour, largely funded by the EU, I think they're paying for 85%, 15% by the three nations themselves. um It did have an original price of $6 billion, but that was something like 20 or 30 years ago when you account for inflation. It's about 15 billion US dollars. So like this is a project, like a massive infrastructure project and I don't think I, apart from niche channels on LinkedIn that I follow, I don't think I hear anyone talking about it ever in any context ever. Why do you think that is? I think there's two parts to it.
00:05:09
Speaker
in terms of like eyes on either news outlets or social media. The first is the contractors involved aren't the big, huge contractors that we're used to seeing. So it's not the da Vinci's, the BAM's, the Skanska's, where you wouldn't actually see a lot more information on socials. IFA's, have big packages on there, I think. Don't quote me. Yeah, but I think... If I'm wrong, we'll cut it. It's fine. Yeah, no, I think it will depend where you are, right? So in the UK, I can only think of one contract that we build around and one that I've bashed you on. And I know that's right just a lack of knowledge on my side, but they're not like commonly sort of. Yeah, you're sending you're sending very American. now like It didn't happen anywhere.
00:05:58
Speaker
Yeah, so I think maybe partly that one of the bigger jackets on its straw bag But even those like they've they've got a few cut projects here. So it's not within the big organization Yeah, but our network of individuals that share a lot they won't be working for these companies So I think it's partly that but the other thing is when you actually look at the broader like EU Forget the technical name the European the trans-european network You know, I mentioned it's like this small cog covering the Baltic States, which is part of this corridor, which is yeah Helsinki to Antwerp. That's one of nine actual schemes across the whole of Europe. Yeah, I think because it's so big, what they're doing, this is such a small section, it won't get the news. So I wonder if the actual overall European transport network across Europe is actually a lot more sort of highlighted. It's over 15000 kilometers overall. The total, the total thing.
00:06:57
Speaker
Yeah, exactly. and So there's all these corridors connecting. This section, which is the Estonia, Latvia, Lithuania, is was it 870 kilometres? Yeah, 870, so it's it's like 1 20th of the overall the overall network that they're building. And just for a way of context, like it's underway. It started how long ago, do you reckon? So this one, it was, I think they they originally went through planning and EU bits and pieces in the nineties. Yeah. Yeah. Yeah.
00:07:30
Speaker
yeah 1990s, it was proposed and then it started in 2010. Yeah, but they signed some cooperation because obviously it's crossing three countries, right? So yeah ah that's a whole other part of the topic to dive into, which is how trying to get a line going through three suburbs in in in this major city is like a nightmare. It's a big stress just just dealing with like network rail and TfL. L.A. 3 governments and the EU. That's wild. 2001 and then yeah, started like 20 something.
Strategic Importance of Rail Baltica
00:08:06
Speaker
Yeah. But I think it's due for completion in 2026. It's not too long. But if you look like in today's world, if you look at where this is on the map for those that aren't totally dialed in on the map of Europe and where Lithuania, Estonia and Latvia is,
00:08:22
Speaker
It is like literally ah straight up the Russian border and if you think strategically, like strategically this is a big problem. They've got these three countries with this rail network that's on the Russian gauge that doesn't properly integrate with the rest of the European network. you know, if any in terms of a defense strategy, the ability to take brow cargo from mainland Europe up to this big extended border is like critical importance. So there's a lot of conversation about how this needs to happen like right now now. um Yeah. And you can talk about accelerating the end date. And you can imagine it's a real
00:09:03
Speaker
like It's really tightening the grip on your like economic growth if you can't just haulage and imports and exports. You're really stuck within those three states and Russia if you're unable to transport goods and everything else. so But yeah, this is that this is the big border all the way up. You know, everyone talks about that big like Finland border with Russia. Like this is, yeah, it's it's a large part of the the the Russian border that doesn't, the ability to transport goods by rail, critical importance for them. So yeah, they' they're talking about, there's a lot of conversation that I've seen news about bringing the end date forward if possible. um Just to give an idea of some of the other sort of sections of the overall network.
00:09:46
Speaker
You've got the North Sea Mediterranean Corridor, Dublin to Brussels. You've got Lisbon to Stroudsburg. You've got Genoa to Rotterdam. They're really these massive interconnecting... Do you ever play ticket to ride? No. It's a really popular, famous board game where you basically build route networks across Europe. So it does, it does have a, it does have a ticket to ride vibe. I'll send you, I'll send you a, I'll send you a picture. The only geographic game I've played is risk. yeah Yeah, no, no, it's not. Yeah, that that's the, that's the other part different at the moment. that
00:10:21
Speaker
Um, no, no, but this side's more ticket to ride vibe. Uh, and so the the aim of the game of ticket rides build these big long connected rail routes. Um, and then the way that you defend against it is build bits of routes to block people. So it'd be interesting to see if that's what's happening in the European countries where they're like. building rail to block people from from ah from having the big longest rail award win the game. guys i think I doubt it, it probably doubt it. Moving on, cost. We mentioned earlier, um it looks like it's going to finish at around 16 billion.
00:11:00
Speaker
which i'm on the face of it, gut feel, that seems quite reasonable for 870 kilometers. Yeah, is that euro? US dollars, I think. That does, given the scale of what other things seem to cost. um You know, like a nuclear power station or ah or a metro in the middle of a city, or the price of an avocado, that seems like, um that seems relatively good value. I don't know if you follow the news in the UK, but apparently the reason why our generation are buying houses is because they spend too much money on avocados and flat whites. as that what You must have just imported that from Australia because Australia has been saying that for the last five years to anyone that can't buy, you know, you can't buy houses because you've bought too many avocados.
00:11:47
Speaker
But it's said by the boomers who bought houses for 20 grand with like a five grand mortgage. And they got to they got all the avocados as well. so yeah Yeah. So um yeah, the the scheme itself, it's largely greenfield. So obviously it's going to be cheaper than building like a HS2 in London and all these ter like really congested areas. um But just to give it an idea of ah cost, If you divide the cost of the scheme by how long the scheme is, this particular project is about $17 million dollars per kilometer.
Cost Comparisons of Rail Projects
00:12:22
Speaker
If you compare that to a few other major schemes. So we've got the ah the Vegas high speed rail, which is 350 kilometers long, which is 1.2 billion. Sorry.
00:12:35
Speaker
Which is 12 billion, and not 1.2 billion. That would have been really impressive. So that works out to 35 million per kilometer. So double. OK, so double. Yeah, yeah, yeah. yep yep it Double already seems like a big leap, considering Vegas is also in the middle of the desert. so yeah there that it if that Yeah, that has to be greenfield, unless they're just doing like runs up and down the strip. Yeah, yeah, 100%. If we then move on to the California high-speed rail, 275 kilometers long, which isn't that much longer than Vegas, we jump from 12 to 35 billion dollars, and that's 127 billion dollars, so ah sorry, 127 million dollars per kilometer, okay? So we're now, we're now at seven and a half times rail Baltica in terms of cost. Yes.
00:13:26
Speaker
You would expect, obviously, if that California is going to be a bit more built up than Vegas and Baltics. Then we move on to high speed 2. 225 kilometers long. 66 billion. Is it only 225 kilometers long? Yeah, the new one's just a Birmingham, right? It's like a hundred and something miles. 66 billion, they reckon, which is nearly $300 million ah dollars per kilometer, 17 times more expensive than rail polterger. And also say when you throw away in per kilometer.
00:14:01
Speaker
Yeah. And also, RailBoltica, I think there's seven major stations they're building, plus regional, HST there's four. So like, the majority is just like rail and viaducts and demolition. But that's, that seems pretty wild. I don't think we can blame inflation on that one. i We should just get those contractors to come and build railways and in the UK, right? and I thought you were going to say that we should get them onto the show and ask them why. if How do you do the things that you do? ah yeah Yeah, super impressive. Let us know the secret. um Yeah, that's ah that's quite the increase. I don't know enough about um projects in America to know if the numbers we're going through are already crazy overruns or sort of
00:14:50
Speaker
ten Yeah, those two that well the the Vegas one was over, but not wildly over. California is famously over budget. um But even that was paling in comparison to HS2, which is ah is wildly over budget. Well, not wildly. Well, depends what budget. it's It's the classic thing of depends where you're measuring from. ah If you yeah yeah measure from the initial budget, yeah, it's it's big style over. Yeah, for sure. How does that compare to Australian major infrastructure schemes? Are they pretty good at keeping the cost fairly consistent? We have no high speed rail. We have an inland rail project at the moment, which isn't properly connected up. So it's very hard to know the overall cost and it's letting so many packages. If I was a better co-host of the podcast, i would do that I would have that research to hand, but there's just not a lot of, there's like no high speed rail really.
00:15:47
Speaker
there's Well, we're trying to handle building metros at the moment, and we'll get to high speed rail eventually. Nice. Now, touching back then, so if you remember the Trans-European network, And that overall plan for Europe is split into like the transport side, and then there's connectivity, so things like broadband for all countries and everything like that, um as well as energy.
Europe's Transport Network Budget and Belt and Road Projects
00:16:11
Speaker
Just the transport side, ah they think is ah approximately 500 billion euros, um and they'll spend... 500 billion euros. So it's about one, if I was to measure it another way, that's the like approximate equivalent of one giant glass city in the desert. Yeah.
00:16:30
Speaker
yeah Yeah, that one. but um yeah I think the the majority of it is planned to be spent before 2030. So it's it's not like this long 30, 40 year vision. It's like they're going at it now. um The overall, hey it includes 65,000 kilometers of railway lines. So obviously the chunk we focused on was the high speed rail, but there's a lot more around it. 136,000 kilometers of roads. 23,000 kilometers of inland in land waterways which seems interesting. Is that a canal? I think that's a canal. Well yeah maybe maybe it includes things that are like quasi canals and things that are not not quite as big as ah ah canal But but i do have i have I have hot news in. While you've been talking, I've been ah finding my pre-prepared research. yeah ah The Raul project in Australia that you did ask me about several minutes ago, is the equivalent cost of 21 billion USD?
00:17:31
Speaker
Uh, and is, it's not finished by any means, but it's supposed to be 1700 kilometers long. Whoa. So that must be, that must be better value than Bautica. My, my iPhone, uh, calculator doesn't do, does it get to e-numbers? yeah I've got a spreadsheet here. Hold on. What were the numbers? 1,700 kilometers. Yeah. And, uh, $21 billion USD, right? Yeah. twenty one million Drum roll. Olu will put a drum roll over the top of this while we wait and see.
00:18:10
Speaker
Whoa, $12 million dollars per kilometer, which is about 30% cheaper than Ralbaltica per kilometer. Yeah, it is going through like the outback of Australia on a freight line with almost no stops. You just laid track onto sand, right? That's it. Yeah, the scope is ah is a slightly easier, I think. um No disrespect for the team's building in Land Rail. I said we worked with. Yeah. Cool. All right. We'll just move on. Next topic.
00:18:49
Speaker
I'm looking at the time and we've actually smashed through our minutes there but um yeah I think we mentioned at the beginning the biggest project that you might never have heard of. I had absolutely no idea the scale of what they're actually trying to do in Europe. We stupidly left ah the European Union fairly recently so we probably see less than we were if we were part of it because England, well the UK is now sort of outside of these plans but yeah 500 billion in over the next Obviously some of it is done, but there's a hell of a lot of money being spent over the next couple of years. The UK has probably already contributed to a lot of the construction with their breakout fee and contributions to the EU beforehand, but yeah, we probably won't see any any of the benefit of it. Did you also come across some of the other big rail projects that are coming like kind of into Europe ah through the Belt and Road Initiative? I wasn't aware of the the Belgrade, Budapest,
00:19:43
Speaker
Is that something that came up on your radar? Not at all. It's a 350 kilometer rail line that is almost finished being built between, yeah, Belgrade in Serbia and Budapest in Hungary. It is largely, it's part of the Belt and Road Initiative, so the big China infrastructure investment initiative where they're essentially helping finance all roads lead to China. All roads lead to China project. um yeah They are winning ticket to ride, basically. They're playing ticket to ride and kicking. but um
00:20:20
Speaker
And so, ah yeah, largely finance it. Yeah, 350 kilometers long. Most of it was funded by a loan from China to either Hungary or Serbia to to build the the projects. Um, so they lent them a couple of billion dollars equivalent, um, to, to build a rail line. Um, some sort of so yeah, you're right. there's there's Yeah. It's the ticket to ride strategy. Yeah. If, if, if only the, I guess the not to like bang on about mainstream news and be one of those people, but like if the news actually covered the amount of infrastructure and happening across Europe, there is a ton of stuff going on, especially in rail.
00:21:04
Speaker
Right. I think that's all the time we have today. So thank you very much for tuning into the show. um If you have enjoyed today's episode, please do like the video um and yeah follow us on your chosen podcast platform. ah We really do appreciate the support so and i'll see you all next week. Thank you.