Chinese investors interested in backing the propsed Tallinn-Helsinki tunnel need to be treated with caution, according to China expert Leslie Leino.
Writing in daily Postimees, Mr Leino said that such consortia are only likely to invest abroad if they have party approval at home and high-level local help.
Chinese investment group Touchstone Capital Partners announced on Friday that it was prepared to put the requisite €15 billion into the tunnel, as reported by Finnish daily Helsingin Sanomat. Touchstone had signed a memorandum of agreement with FinEst Bay Area Development, the developers of the project, headed by Finnish businessman Peter Vesterbacka, the day before. Mr Vesterback had put the estimated cost of the tunnel at €15-16 billion, in December.
In his Postimees piece, Mr Leino said that neither the Chinese embassy in Tallinn, nor the Ministry of Foreign affairs, had been discussing the tunnel’s construction, or Touchstone Capital for that matter, which should sound alarm bells.
New Silk Road
”China has never really been a beacon of altruism in history; the project is aimed not at helping out Europe, but at both finding new markets for Chinese goods, and increasing its influence,” Mr Leino wrote, noting other previous projects, including the ”New Silk Road” to back up his claims.
The latter is a rail transport route for moving freight and passengers overland between Pacific seaports in the Russian Far East and China, and seaports in Europe, with proposed Eurasian expansion across Kazakhstan, using Chinese-gauge railways, and in other locations. Its name evokes historical land trade routes across central Asia and linking China to Europe.
Mr Leino’s remarks, which also claimed many local investors end up accruing significant debts after doing business with China, echo those or Urmas Paet MEP (Reform/ALDE), who noted last week that such investments almost always have political strings attached.
“The risks connected to using the money of Chinese state companies are too great,” he said, adding that there is no reason why significant European infrastructure, including the proposed tunnel, cannot be built with European money.
Founded in 2003, on its website, Touchstone says that it: ”… has a network of professional partners and associates which includes high net worth individuals, major private corporations, SOEs, trust companies, banks, pension funds, insurance companies, and finance houses”.
It also cites its directors and associate partners and fund managers in the UK, Australia, the Middle East, and both North and South America as well as Asia and Europe, amongst other regions, where it says it has: ”… particularly strong contacts in the financial and legal sectors of those cities [sic]”.
FinEst Bay Area and Mr Westerbacka had envisaged the tunnel project being completed in 2024. Confidence in it project is such that travel tickets are already available, it is reported. A return ticket costs €100 at present (half of that for one-way travel), and an annual ticket, with guaranteed unlimited travel through the tunnel for a year, costs €1,000.
Travel time through the tunnel between the two capitals would be estimated at 20 minutes.
By comparison, return tickets via the three main car ferry operators, Tallink, Viking Line and Eckerö, cost between €20 and €50 at short notice and without offers. The journey takes between two and three hours in normal conditions.
In December 2018, Mr Vesterbacka, former CEO of Finnish game developer Rovio, filed a request for initiating the procedure for a national designated spatial plan for the tunnel with the finance ministry.
Other previously interested foreign investors include Dubai engineering solutions giant ARJ Holding Ltd, which is investing €100, Mr Vesterbacka announced in December 2018.