Project companies in the planning of rail investments
Follow-up completed: 28.08.2026Based on its audit findings, the NAOF does not recommend using the project company model when planning large rail investments, as this model poses risks to central government finances. Audit follow-up showed that the recommendations issued have been mainly complied with.
Summary of follow-up
Follow-up found that the audit’s recommendations have mainly been implemented adequately. Project profitability data have been presented more openly, risks have been limited, and roles have been clarified. As a result of political steering, public officials have limited possibilities to make transparent and verifiable comparisons during the drafting process before decisions are made. While attention has been paid to ensuring the adequacy of the Finnish Transport Infrastructure Agency’s resources, the solutions for securing the resources are still partly open.
The follow-up has been completed. The report is available in Finnish only.
Recommendations of the National Audit Office
The Government should consider alternative forms of implementation, make comparisons between them and justify the choices made in a transparent and verifiable manner if there are intentions to plan the transport infrastructure outside the agencies.
The Government should first make decisions on any major issues concerning infrastructure projects, such as the selection of railway routes, if a project company is to be entrusted with the railway planning.
The Government should before large railway projects have proceeded to a possible implementation phase, ensure that information on the socio-economic viability of the projects is presented in a transparent manner. The Government should also identify any risks related to issues such as roles, steering, monitoring, funding and conditions created by the legislation and ensure their management. The Government should also further clarify the role of the Finnish Transport Infrastructure Agency and make sure it has the necessary resources for solving any situations concerning the connection of the newly-constructed railway to the rest of the transport network and land use.
The Ministry of Transport and Communications should clarify its role in ownership steering in relation to special purpose entities and their shareholders and make sure that the project companies operate responsibly in collaboration with their small shareholders.
The Ministry of Transport and Communications should specify the roles of different parties in the system of special purpose entities and ensure that, for instance, the Finnish Transport Infrastructure Agency has access to sufficient resources for the planning cooperation.
The Ministry of Transport and Communications should ensure that the good practices generated in the operations of the special purpose entities are also adopted in the operations of the transport infrastructure administration where applicable.
About the audit
Using a project company set up as a limited liability company to supplement funding under the Budget in the planning and construction of large railway projects is a new practice in Finland. The NAOF audited the project company model in the operations of Turku One Hour Train Ltd, Suomi-rata Oy and Itärata Oy, which were established in the period 2020–2022. The audit examined from the perspective of central government finances how planning carried out using the project company model affects the appropriateness, efficiency and goal achievement in the operations.
The estimated planning costs of the projects range from EUR 25 to EUR 155 million and the construction costs from EUR 1.7 to EUR 5.5 billion. The Ministry of Finance and Ministry of Transport and Communications have estimated that the projects can result in an annual cost obligation of between EUR 33 and 51 million for the general government for several decades. The projects may have wider economic impacts on issues such as land use and labour market or on the regional economy and real estate, income and value-added tax.
Long-term funding granted to special purpose entities throughout the planning phase has been considered the strength of the project company model. The audit showed that the funding may change or be cancelled as was the case in 2023, when new policy lines on the funding of the entities were set in the Government Programme. The special purpose entities have developed new, efficient operating methods and created innovative technical design solutions. The procurement environment has been challenging, and the project company model has not yet been found to achieve significant cost savings. Finnish legislation does not recognise special purpose entities as planners of the state-owned railway network, and the entities have not been organised in accordance with the Ministry of Finance guidelines on the establishment of state-owned companies.
The NAOF recommends that the Government should carefully consider the possible use of special purpose entities as a funding and organisation form for the planning of railway projects and justify their selection in a transparent manner. Before the implementation of major railway projects, the Government must make decisions on any major issues, such as on the routes of the railways, and ensure that significant risks are managed. The Ministry of Transport and Communications should specify the roles of different parties in the system of special purpose entities and ensure that the Finnish Transport Infrastructure Agency has access to sufficient resources for the planning cooperation.
Contact persons
Katja Estlander
Principal Performance Auditor, D.Sc. (Tech.)
Performance audit
Audit areas: Ministry of Finance, Ministry of Transport and Communications, Prime Minister’s Office