FEBAY Files New Planning Application for Helsinki–Tallinn Rail Tunnel

Finest Bay Area Development (FEBAY) filed a fresh application on 2 November 2026 to launch Estonia's National Designated Spatial Plan (NDSP) for the proposed Helsinki–Tallinn railway tunnel, restarting a statutory process that stalled for years in courts and procedural disputes. The application also triggers a strategic environmental assessment, and it opens the most consequential regulatory phase the private cross-border project has faced in Estonia to date.

The move follows changes to Estonia's planning and environmental assessment framework, which FEBAY believes could provide a more predictable basis for evaluating major infrastructure projects. The company expects the process to support closer coordination with Finland, where the tunnel's environmental impact assessment is already underway.

Why the timing matters

FEBAY's previous attempts to advance the tunnel in Estonia ran into legal and procedural obstacles, including court proceedings over the relationship between environmental assessments and national spatial planning. The company is effectively getting a second bite at the process under a reformed framework.

The scale of the problem those reforms address is measurable. A 2024 study commissioned by the Estonian government found that environmental assessment procedures taking roughly one year in Finland and Sweden could require at least six years in Estonia — a sixfold gap for comparable work. Estonia has since pursued reforms intended to cut administrative delays and duplicated procedures while preserving environmental safeguards and public participation.

FEBAY CEO Peter Vesterbacka framed the new application as a break from years of standing still. "We have had to wait years to take this step, and we are pleased to be moving forward," said Vesterbacka. "Estonia has recognized the importance of clear, efficient procedures with predictable schedules and transparent decision-making for major investments. We are confident in the direction the country is taking and look forward to working constructively with the government, experts and communities."

Kustaa Valtonen stressed that predictability, not speed alone, is the operative requirement. "Predictability matters when developing infrastructure of this scale," said Valtonen. "We need a process that allows the environmental, technical and economic questions to be examined properly, with clear responsibilities and a workable timetable. The changes in Estonia provide a stronger basis for moving forward."

The need for coordinated assessment is not new. The joint Finnish–Estonian Ad Hoc Working Group has previously called for the tunnel's overall and cross-border environmental effects to be examined through synchronized national procedures. The two countries signed a Memorandum of Understanding on tunnel cooperation in April 2021.

FEBAY's preparations included discussions with Estonia's Minister of Economic Affairs and Industry Liina Vahtras and Foreign Minister Margus Tsahkna. Legal advice came from Sorainen, with partner Paul Künnap supporting preparation of the renewed application.

Where the money would come from

In parallel, FEBAY is restructuring the project's financing through a partnership with Finna to establish the Finna Finest Infrastructure Fund. The initiative targets European private capital, with an initial focus on family offices interested in long-term infrastructure holdings.

The pool is large but uncommitted. Deloitte Private's 2024 research estimated Europe had approximately 2,020 single-family offices, while the global family office sector managed around US$3.1 trillion in assets. FEBAY intends the fund to channel some of that long-term capital into the tunnel as it advances through planning and assessment stages.

"European family offices are an important potential investor group for the Finest Tunnel," said Valtonen. "We see an opportunity to bring together long-term private capital and a project that can create lasting commercial and economic value for Northern Europe. Our partnership with Finna provides a channel for developing those investor relationships as the project advances."

What the application actually is — and is not

The Finest Tunnel is a privately developed railway project that would connect Helsinki and Tallinn through a passenger and freight link beneath the Gulf of Finland, tying Finland into Rail Baltica and the wider European rail network. FEBAY says the connection would improve cross-border mobility, create business opportunities on both sides of the gulf, and support more sustainable transport and regional supply security.

The application, however, is a beginning, not a green light. It starts another statutory planning and assessment stage rather than granting approval to construct the tunnel, and progress will depend on planning, environmental and regulatory outcomes in both countries. "Submitting the application is an important step in our long-term commitment to delivering the Finest Tunnel," said Valtonen. "We are ready to contribute the studies, expertise and resources needed to support a rigorous assessment and an informed decision."

FEBAY is also developing a second megaproject, the proposed Oslo–Stockholm 90-minute railway. For now, though, everything hinges on whether Estonia's reformed procedures deliver the predictability that its own 2024 study showed the country lacked.