Overview
The Kolari–Pajala and Sokli mining projects and related investments are socioeconomically very profitable. According to studies, employment effects and impacts of projects on state and municipal tax revenues are significant. The most essential challenge of the Kolari-Pajala and Sokli mining projects is that both the state and companies are dependent on the decisions of the other party before they can make their own decisions.
The state cannot be committed to the projects before it can be guaranteed of the beginning and long duration of company operations. From the viewpoint of companies, they cannot make investment decisions before they know their own logistic costs including participation in the costs of transport infrastructure projects.
Based on the objectives to be achieved by the year 2020 presented in the Government transport policy report to the Parliament (27.3.2008), the transport network provides the possibilities for developing and maintaining vitality to the various parts of the country. With regard to transport investments related to mining projects, it is stated that shadow toll financing is the most suitable method for mining projects.
The essential question regarding the infrastructure investments of forthcoming mining projects is the repayment of investment: should the state pay for the investment or will the mining company also participate on the costs.
Funding
Results
The share of the state could be determined, among other things, by the benefits (for example employment, tax revenues) gained from the project. The criteria in railway investments could include, for example, the possible operations of other freight traffic or passenger traffic on the railway.
Impacts of mining projects on the whole transport network also constitute a significant issue. Upgrading will probably also be needed in other parts of the railway network. for example, additional costs may be generated from increasing bearing capacity. Costs will increase, if cargo is shipped in the railway network for longer distances. Furthermore, port roads and railways require additional investments in many cases.
There were evaluated three financing models:
- Normal budget financing
- Private finance iniative
- PPP models
There were defined following challenges for the future:
- Size of the investments, the duration of the mining projects
- Sökli: just one user for rail connection
- Environmental issues, reindeer farming
- Define the operating guidelines and recommendations for state participation in Kolari and Sökli mining projects