Negotiations completed on Western Railway project – draft agreement submitted for municipal and central government approval

The Government and the municipal shareholders of West Railway Ltd (Turku, Espoo, Salo, Lohja, Vihti and Kirkkonummi) have agreed to initiate construction of the project if a negotiated settlement is formally approved by their respective decision-making bodies.

The negotiations concerned the first phase of the Western Railway project. The agreement includes a commitment to constructing this project in line with the Government Programme. The substantive parts of the protracted negotiating process was completed on 31 October 2025. Technical adjustments are still being made to the shareholders' agreement and its appendices.

The Western Railway is a partially twin-track rail connection planned between Helsinki and Turku. The decision to initiate the first stage of construction concerns the sub-projects between Espoo and Lohja, and the Salo–Hajala and Nunna–Kupittaa track connections.

Formal decisions of the competent decision-making bodies of all parties are still required for the shareholders' agreement, which may only be signed after the competent bodies of all shareholders have approved it.

The shareholders' agreement settles such aspects as administration, financing and decision-making of the project company.

The agreement will become public on 6 November 2025 as it progresses to the boards of the first participating municipalities.

Costs to be monitored actively

The company estimates that the project will cost EUR 1.32 billion in total. This estimate reflects current prices and cost levels, and allows for some uncertainties identified by the Finnish Transport Infrastructure Agency and other parties. Government representatives advised the municipalities of some identified cost risks as the negotiations proceeded. While the agreement sets out procedures to minimise and manage such risks, the prospect of cost increases cannot be ruled out.

The shareholders' agreement includes a project financing commitment of no more than EUR 800 million, with central government and the municipal owners each committed to covering EUR 400 million respectively.

The company will also be authorised to seek capital loans of up to EUR 520 million at a later stage, covered by a central government guarantee  to be decided separately by the Finnish Parliament.

The shareholders will be liable for any cost increases and debt financing costs, with central government covering two-thirds and the municipal owners covering one third of these expenses. Under no circumstances may the maximum central government financial commitment exceed EUR 920 million plus debt financing costs.

The project cost estimates include significant risks. The shareholders stress that the company must actively monitor project costs and minimise the risk of cost increases.

Only a small part of the agreed funding will be spent during the present government term. Progress in planning and competitive tendering of Western Railway sub-projects indicates that construction of the first sub-projects could begin no sooner than in late 2027.

What’s next?

The shareholders' agreement will be considered by the competent decision-making bodies of all West Railway Ltd shareholders.

Inquiries

Tuomas Sorsa, Special Adviser, tel. +358 295 342 012, [email protected]

Miikka Rainiala, Director of Unit, tel. +358 295 342 051, [email protected]